Managing Terrorist-Financing Risk in NGOs

Non-profit organisations do vital work, and, because they move funds across borders and communities, they can be exposed to terrorist-financing risk. Managing that risk protects both the mission and the organisation.

NGOs are not immune from AML/CFT expectations. Donors, banks and regulators increasingly expect non-profits to understand and manage the risk that funds could be diverted to illicit purposes. The goal is proportionate protection, not to burden legitimate charitable work.

Where the risk sits

Risk tends to concentrate around cross-border transfers, cash disbursements in high-risk areas, and partnerships with local intermediaries. Understanding your funding flows end to end is the first step to controlling them.

Practical controls

• Due diligence on donors, grantees and implementing partners
• Clear controls over how funds are disbursed and accounted for
• Screening against sanctions and terrorism lists
• Record-keeping that can withstand donor and regulatory scrutiny

Balancing mission and compliance

Good controls actually enable an NGO’s work, they reassure donors, unlock banking relationships and protect the organisation’s reputation. A risk-based approach keeps the effort proportionate so resources stay focused on the cause.