The Chronicle of Philanthropy ($$) reports on some positive news regarding the government's antiterrorism rules that impact charities and perhaps, some modifications may lie ahead that improve the ability of groups to engage in humanitarian work overseas. "A group of charity leaders has been gathering with officials from the National Security Council and the Treasury Department since June for informal discussions about the laws, regulations, and guidelines enacted after September 11, 2001, to prevent charitable money from getting into terrorists' hands."

OMB Watch has been a part of a group that has time and again called for the withdrawal of the Treasury Department's Anti-Terrorist Financing Guidelines, which are suggested practices geared toward charities and foundations. However, the Guidelines have been widely criticized, partly for being onerous and for promoting practices that in fact do little to prevent the diversion of funds to terrorism.

Multiple areas of concern have existed for the nonprofit community. These include the fact that Treasury can freeze the assets of a charity without providing any reason; criminal penalties for providing money, food, medical aid, and other assistance to groups considered terrorists, and the millions of dollars in charity assets that Treasury froze when it designated those groups as supporters of terrorism. Contributing to a bit of hope, are some court cases brought in behalf of nonprofit groups. For example, an appeals court ruled that it was unconstitutional for Treasury to freeze the assets of KindHearts, a Muslim charity in Ohio, in Feb. 2006 without obtaining a warrant or giving any reason.

Many charity leaders are pinning their hopes on comments made by President Obama in Cairo in June. In a speech on U.S.-Middle East relations, Mr. Obama noted that the antiterror rules have made it more difficult for Muslims to fulfill their religious obligation to support charity. Michael German, a lawyer at the American Civil Liberties Union, said he and other participants in the meetings with the White House and Treasury have tried to educate the government that the rules have broad consequences for nonprofit groups, potentially constraining the work not just of Muslim charities but of all organizations.

For more background, read Collateral Damage: How the War on Terror Hurts Charities, Foundations, and the People They Serve