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Canadian charities are vital for achieving societal goals, both domestically and internationally. However, to maintain public trust and confidence in these organizations, it's essential to safeguard against terrorist exploitation. This article provides a checklist to help Canadian charities identify vulnerabilities to terrorist abuse and ensure good management practices.

Why Charities Are Vulnerable:

Charities bring people together for collective action and often operate globally, including in conflict zones with limited infrastructure. These factors unintentionally create opportunities for exploitation by terrorist supporters, who may use charities' networks and resources to advance their agenda.

Canada's Commitment to Combat Terrorist Abuse:

The Canadian government collaborates with international partners to address global issues such as terrorist exploitation of charities. By actively participating in international efforts, Canada aims to protect its charitable sector's reputation and uphold the integrity of legitimate charitable activities.

The Importance of Internal Governance:

Sound internal governance practices are crucial for protecting charities against various forms of abuse, including fraud, money laundering, and support for terrorism. Implementing robust internal controls, risk management systems, and transparent reporting mechanisms are among the best actions charities can take to safeguard themselves.

The Checklist:

The checklist provided below is based on both international and domestic concerns, offering guidance for Canadian registered charities to identify areas of vulnerability and mitigate risks of terrorist abuse.

1. Awareness of Legal Provisions: Ensure awareness of individuals and entities associated with terrorism listed under Canadian laws, such as the United Nations Act and the Criminal Code. Understand the consequences of breaching provisions related to financing and supporting terrorism.
2. Background Checks: Conduct thorough background checks on board members, employees, fundraisers, and volunteers to understand their affiliations and backgrounds.
3. Compliance with CRA Guidance: Familiarize yourself with CRA guidance on various aspects, including record-keeping, allowable activities, operations outside Canada, and international contexts.
4. Internal Financial Controls: Establish robust internal financial controls, including delegations of authority and verification mechanisms, to oversee cash handling, depositing, and issuance of receipts.
5. Secure Money Transfers: Utilize normal banking mechanisms for money transfers whenever possible. When using alternative systems, implement strong controls and audit trails to safeguard funds.
6. Monitoring Facility Usage: Monitor who uses charity facilities and for what purposes, ensuring awareness of distributed materials and statements made.
7. Due Diligence on Endorsements: Conduct due diligence on individuals or causes endorsed by the charity to identify potential supporters with affiliations to terrorism.
8. Source of Donations: Understand the origin of donations and other forms of support received by the charity.
9. Control Over Projects: Identify entities with ultimate control over projects funded by the charity and ensure transparency in resource utilization.
10. Partner Due Diligence: Know your partners when delivering charity work and understand their affiliations with other organizations.
11. Written Agreements: Establish clear written agreements with agents, contractors, and partners, outlining activities, monitoring procedures, and compliance checks.

The intentional provision of support to terrorists is a crime that cannot be reconciled with the legal concept of charity. While terrorist exploitation of charities is rare, it poses significant risks to the integrity of the charitable sector. By adhering to the checklist and remaining vigilant, Canadian charities can mitigate these risks and uphold their commitment to legitimate charitable activities.

Reporting Suspected Activity:

Anyone suspecting links between registered charities and terrorist activity should report them to the RCMP's National Security Information Line at 1-800-420-5805 or visit the National Security Information Network website. Complaints about registered charities can also be made through the "Report suspected non-compliance by registered charities" portal.

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