Will other parties follow the (Labour) Leader?

  • New report reveals challenges NGOs face in securing and transferring funds due to the counter-terrorism regulation fears of banks.
  • Calls on banks, charities, and government bodies to improve dialogue on resulting financial restrictions and impact on charitable activity.
  • Critical aid struggling to reach conflict zones such as Syria

International aid charities are struggling to use their donations for frontline services due to stricter counter-terrorism legislation causing banks to shut down accounts in an effort to reduce their overall risk.

The warning comes in a new report by the cross-party think tank Demos, which argues that new regulations could
be ‘costing charities millions’ in aid funding due to additional compliance costs and money being tied up in domestic accounts due to blocked transfers.

It coincides with the current review of the Protection of Charities Bill and just a few weeks before the government’s terrorism legislation reviewer, David Anderson QC, is due to publish his latest review of the operation of the government’s terrorist asset-freezing legislation.

The Demos investigation is led by Tom Keatinge, an expert with several years’ experience in the field of finance and banking regulation, who conducted dozens of interviews with high-level figures in government and the banking and charity sectors to pinpoint the root causes preventing money getting to where donors intended, and how to address them.

The report cites figures showing the UK has over 160,000 registered charities, with total reported turnover in excess of £63 billion per annum. According to official figures approximately 20% (£740 million) of the government’s bilateral assistance funds distributed by the Department for International Development are channelled through NGOs.

The Uncharitable Behaviour report recognises the challenges posed by the threat of terrorist activity, but proposes a number of measures to help the government and organisations ease the obstacles they place on their activities. It recommends:

  • Consideration should be given to introducing a form of ‘kite-marking’ that recognises strong governance standards in the NGO sector.
  • Banks should consider the promotional benefits of ‘reputation return’ by working more closely with NGOs to find solutions to the challenges they face, allowing banks the opportunity to emphasise their ‘partnerships’ with the NGO sector.
  • Smaller charities should seek to reduce duplicated administration costs by looking to merge with similar organisations in their sector (such as the recent merger of Prostate Cancer Research Foundation, Prostate Action and Prostate Cancer UK).