Muslim Charities Accuse Government of Harming Their Fund Raising

Donations to U.S. Muslim charities have fallen by 20 percent since the Bush administration started cracking down on Islamic nonprofit groups accused of providing support to terrorists, Aslam Abdullah, editor of The Minaret magazine, a monthly publication on Islam in the United States, told a gathering of Islamic leaders here last month.

“There is the fear that if you have given money to any Muslim charitable organization, the department that believes in justice will come after you,” he said, referring to the U.S. Department of Justice.

Mr. Abdullah spoke at the Muslim Public Affairs Council’s annual meeting, which drew more than 1,500 people. The council is an advocacy group in Los Angeles that coordinates the work of Muslim activists.

At the end of 2001, the Justice Department froze $8-million in total assets of three organizations that are among the largest U.S. Muslim international charities — the Benevolence International Foundation, the Global Relief Fund, and the Holy Land Foundation for Relief and Development — because of their suspected ties to the terrorist organizations al Qaeda and Hamas. Officials of the charities have denied the charges.

Mr. Abdullah estimated that in 2002 Islamic charities raised about $14-million less than the $70-million they received in the previous year. He said his estimates were based on the fund-raising results of more than 50 Muslim groups and mosques nationwide that he and his magazine surveyed.

Muslims traditionally give during the holy month of Ramadan, which ended December 5, and are obligated to donate at least 2.5 percent of their net worth each year as part of zakat, a tenet of Islam similar to Christian tithing. Muslims often fulfill zakat by supporting a charity or giving money to a needy relative, neighbor, or friend.

Mr. Abdullah said that more American Muslims have been making the latter choice than in years past.

Civil-Rights Groups

Despite the donation downturn reported by Muslim charities, Mahdi Bray, executive director of the Muslim American Society Freedom Foundation, in Washington, said he expected a windfall of gifts to his group and other civil-rights organizations this year because, he believes, American Muslims are outraged at the government’s detention of immigrants from Islamic countries and the Bush administration’s policies on Iraq. “The groundswell is beginning already,” he said.

Leaders of groups that support Islamic programs outside the United States also see reasons to be optimistic about fund raising.

Many donors who are determined to support Islamic international charitable activities have done so anonymously, said Laila Al-Marayati, a board member of Kinder USA, an Islamic relief group in Dallas that opened its doors last February. “Our organization receives cash in the mail, which just tells you how committed people are,” she said.

While Kinder USA has never been accused of supporting Islamic militants, Ms. Al-Marayati said she thinks law-enforcement agencies have been overzealous in linking terrorist financing to charities. As a result, she says, American Muslims are afraid to give openly to her organization. “People are determined to give in ways that protect themselves because they are in great fear of their names being put on a list,” she said.

Assuaging Concerns

Juan C. Zarate, the U.S. Treasury Department official in charge of Operation Green Quest, the government’s effort to stop the flow of money from charities to terrorists, said Muslim donors’ fears are unfounded.

“No donors have been designated nor are they a target of the effort,” he told conference attendees. “The donor’s goodwill is not at issue. The issue was that individuals used the offices of charitable groups, not only to raise funds and funnel funds, but also to use the logistical base of those charities, particularly abroad, to further their terrorist missions.”

Mr. Zarate said the administration wants to maintain a “safe giving space” for Muslims. The Treasury Department issued accounting guidelines late last year that it encouraged charities to follow so donors would be able to determine how their money was being used.

“We issued voluntary best practices for all charities, but in particular to Islamic charities, because we were asked to provide some form of guidance so donors of goodwill could be assured that their money was not being misused for fraudulent purposes and not being misused for terrorist purposes,” he said.

The guidelines represent well-established due-diligence and auditing procedures, Mr. Zarate said. The department developed the guidelines based on principles established by the Better Business Bureau’s Wise Giving Alliance, a charity watchdog group, and by the Evangelical Council for Financial Accountability, which sets financial standards that Christian charities must meet to become members.

Even though the government made clear that charities are not required by law to follow the guidelines, charity leaders say they fear that donors will think something’s wrong if an organization chooses not to abide by the standards set forth by a federal agency.

Ms. Al-Marayati said that, although Islamic charities would benefit from adopting most of the accounting practices, a few are too onerous. “Most of what is recommended are things that should be done anyway, but some of them may become a little bit more problematic,” she said.

Particularly difficult, she said, is the Treasury Department’s suggestion that if a U.S. charity provides funds to a nonprofit organization abroad, it should determine the identity of all the financial institutions the foreign group maintains accounts with, and should get bank references to determine, among other things, whether the institutions are shell banks, operate under an offshore license, or are licensed in a jurisdiction that is “noncooperative in the international fight against money laundering.”

What’s more, Ms. Al-Marayati expressed worry that the guidelines represent a “double standard” for Muslim charities, and that the administration would not apply them to non-Islamic organizations.

She also accused the government of subjecting her organization’s application for tax-exempt status to undue scrutiny, despite the administration’s statement that the United States needs more aid groups working in Muslim countries. She said most groups receive notification from the IRS within three months or so. Kinder USA applied for nonprofit status in March, she said, but as of December, the Internal Revenue Service had yet to approve it.

“It leaves us with the general sense that perhaps we are being looked at and treated differently,” Ms. Al-Marayati complained.

Mr. Zarate denied that the administration treats Islamic groups differently from their non-Muslim counterparts, but said that he would look into Ms. Al-Marayati’s complaints about Kinder USA’s nonprofit application.

Other nonprofit leaders and Muslim activists accused Mr. Zarate and the Bush administration of closing the three suspect Muslim charities without providing ample evidence to the public.

“The department that believes in justice is going after organizations without telling donors whether they are guilty of any type of wrongdoing or any type of criminal behavior,” said Mr. Abdullah. “They are being shut down on the basis of arbitrary decisions by people who sit in ivory towers.” What’s more, he said, the government has ignored charities representing other faiths that violate international laws and promote violence.

Though the Justice Department is in charge of the investigations, Mr. Zarate said the cases against the three shuttered charities were strong, and that the Treasury Department examines all nonprofit groups with possible ties to terrorists. He would not say if his department was investigating any non-Muslim charities for questionable activities.

The Treasury Department’s guidelines for charities are on its Web site, http://www.ustreas.gov/press/releases/po3607.htm.