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There is a reading service for the visually impaired (part of an 501(c)(3) non-profit, that also provides medical services) that accepts recordings from volunteers who read remotely. Thus state/country borders are not an issue, yet they won't allow foreign readers to join, referring to the Patriot Act and all the complexities surrounding it.

From their perspective, it makes sense given how expensive specialty legal counsel is, and most such non-profits have either gone bankrupt during the pandemic or are on the verge, but I'm still interested if this (i.e., citing the Patriot Act) has merit (or any other laws or statute that I'm not aware of).

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  • We don't have enough facts to say for sure what's going on here, but it seems quite likely that the Patriot Act (a) does not forbid such volunteer assistance; and (b) could impose compliance obligations that would make accepting such assistance counterproductive.
    – bdb484
    Jan 25 at 18:55
  • What country do you live in.
    – hszmv
    Jan 25 at 19:06
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    @bdb484 they likely do not have a way of ensuring that the reading service is not used for other ends (such as a drop box for illicit messages in other langues, of which they do not have mastery). If such messages come from US locations, the originators are within the jurisdiction. If neither the language nor the location is clear, it would be much harder to control what is being posted.
    – grovkin
    Jan 25 at 22:58

2 Answers 2

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Short Answer

In all likelihood there is no legal risk to a U.S. 501(c)(3) non-profit associated with receiving in-kind volunteer assistance of the kind described or any other volunteer personal services from abroad or from someone who is not a U.S. citizen.

In a likelihood, this policy arises from the non-profit's misunderstanding of the law in a way that doesn't require expensive specialist technical legal knowledge to understand.

But, just because a non-profit is not required by law to impose these kinds of restrictions even though it thinks (mistakenly) that it is, the only solution is to educated the non-profit otherwise, which could involve a difficult struggle in the inner governance of the non-profit, even though it might be possible to correct with a letter directed to just the right person in the organization.

Long Anxwer

I suspect that the true statute that generated the belief that there was a potential legal issue here that was too expensive to investigate is the material support for terrorism statute (and incidentally, not actually primarily under the Patriot Act). As the U.S. Justice Department explains (the reference is dated and may have been since relocated to a new statute, however):

The Antiterrorism and Effective Death Penalty Act of 1996 gave the Secretary of State authority to designate foreign terrorist organizations whose terrorist activity threatens the security of United States nationals or the national defense, foreign relations or economic interests of the United States. See Pub. L. 104-132, § 302, 110 Stat. 1214, 1248. See also section 219 of the Immigration and Nationality Act (8 U.S.C. § 1189).

The Antiterrorism Act also created 18 U.S.C. § 2339B, which makes it unlawful, within the United States, or for any person who is subject to the jurisdiction of the United States anywhere, to knowingly provide material support to a foreign terrorist organization that has been designated by the Secretary of State. See Pub. L. 104-132, § 303, 110 Stat. 1214, 1250.

The existing laws governing material support for terrorism were strengthened and relocated to the USA Patriot Act in October of 2001.

The difficulty is that quite of few of the non-governmental organizations designated by the Secretary of State as terrorist organizations, especially in the Middle East and the Islamic world, a broad political movements that seek change on multiple fronts: plain vanilla charitable work, political action in the nature of a political party or political action committee, and direct paramilitary action that the Secretary of State classifies as terrorism.

Determining which organizations are currently designated terrorist organizations by the Secretary of State is not nearly as easy as it should be for a statute that imposes serious criminal liability.

So, there is a risk that someone providing ordinary, unexceptional support for charity work by one of these organizations could be found to have committed the crime of providing material support for terrorism.

A memo from the United Way of Houston (not yet updated to reflect the 2020 adoption of the USA Freedom Act) sheds more light on the nature of the concern with citations to legal authorities:

EXECUTIVE SUMMARY

To ensure that local United Way member organizations (“Members”) comply with heightened national security concerns about providing financial or other “material support or resources” to terrorist organizations, the Office of General Counsel recommends that Members (at the minimum) (bold emphasis mine):

  1. Screen all agencies receiving funds (“Funded Agencies”) against federal terrorism “watch lists” prior to engaging in dealings with them. Federal law prohibits transactions with all persons and organizations on these lists. As these lists are updated from time to time, we provide Internet links to the lists maintained by various federal departments and agencies.

  2. Obtain certifications from Funded Agencies that they are not terrorists or terrorist organizations and do not knowingly provide any kind of support to such persons or organizations. A model form for this purpose is attached for use by Members.

  3. Provide a certificate to partnering corporations (“Donors”) who request one, stating that the Member does not, and will not knowingly, apply donated funds so as to provide any kind of support to terrorists or terrorist organizations. A model form for this purpose is also attached for use by Members.

These steps are prudent in light of the criminal and civil liability that United Way of America, Members and Donors may face if any of them knowingly deal with or provide material support or resources to terrorists or terrorist organizations, as well as the possible loss of tax exempt status if such support leads to designation of the Member or Donor as a terrorist organization or addition of that Member or Donor to a federal “watch list.”

B. POST 9/11

In response to the September 11th attacks, the federal government has instituted and strengthened several new and existing measures to combat terrorism: (i) Executive Order 13224 and related Treasury and State Department Regulations; (ii) IRS and Treasury Department guidelines; and (iii) the USA Patriot Act.

II. LEGAL MEASURES

A. Executive Order 13224 and related Treasury and State Department Regulations Executive Order 13224 carries the force of law and prohibits transactions with individuals and organizations considered by the executive branch of the federal government to be associated with terrorism. There are various statutes that support the directives in Executive Order 13224, including the International Emergency Economic Powers Act (as amended by the Patriot Act) which permits the executive branch to freeze and confiscate assets controlled by or in the possession of these entities.

There are several lists of persons and organizations that have been designated as terrorists or terrorist organizations, and each of them should be checked to ensure that Members are not dealing with such a person. The lists are:

• The list of persons and entities designated under Executive Order 13224 (at ttp://www.treas.gov/offices/enforcement/ofac/sanctions/t11ter.pdf).

• The Treasury Department’s “master list” of specially designated nationals and blocked persons (at http://www.treas.gov/offices/enforcement/ofac/sdn/).

• The State Department’s list of foreign terrorist organizations (at http://www.state.gov/s/ct/c4291.htm).

Each of these lists should be checked by Members, even though some persons or organizations may appear on more than one list. In addition, these lists change over time, so Members should have in place procedures for keeping up to date with such changes.

B. IRS AND TREASURY GUIDELINES

The U.S. Tax Code, Treasury Regulations adopted thereunder, and various rulings of the U.S. Internal Revenue Service generally prohibit the diversion of charitable assets to any non-charitable purpose. The material or financial support of terrorism is, of course, prohibited. Violation of these laws invites the risk of revocation of an organization’s tax-exempt status. In 2003, Congress adopted an amendment to the Tax Code providing for the automatic, revocation of tax-exempt status for an organization designated as a terrorist organization under the Patriot Act or added to any of the relevant U.S. terrorist watch lists.

The Treasury Department also issued the Voluntary Treasury Guidelines in effort to guide non-profits and grantmakers in their compliance with the Executive Order and Patriot Act. The Voluntary Treasury Guidelines consist of four parts: (i) governance; (ii) disclosure and transparency in governance and finances; (iii) financial practices and accountability; and (iv) anti-terrorist financing procedures. The Voluntary Treasury Guidelines are voluntary; and do not have the force of law, but outline best practices and anti-terrorist financing compliance program for non-profits and grantmakers. The Voluntary Treasury Guidelines propose that internationally active foundations and non-profits implement compliance programs similar to those already required of private institutions by the Patriot Act and Bank Secrecy Act. However such compliance programs are onerous and would require an organization to conduct extensive due diligence of all entities with which it contracts, including vendors, financial institutions, grantees and partners.

C. USA PATRIOT ACT

In October 2001, President Bush passed an act entitled Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism, more commonly known as the USA Patriot Act (“Patriot Act”). President Bush passed the Patriot Act shortly after the September 11th terrorist attacks in order to strengthen the Federal government’s ability to combat terrorism. The Patriot Act is very broad sweeping, thereby impacting many other statutory regulations. As a result of the increasing number of Donor requests for our Members to certify compliance with the Patriot Act, we must ourselves examine the Patriot Act and how we are impacted by it.

(i) What Does the Patriot Act Require of Non-Profits?

As applied, the Patriot Act is broad and will require specific changes to the way a non-profit conducts business. Importantly, the Patriot Act expanded certain provisions in existing law that have been interpreted to impact non-profits because they create criminal and civil liability for an individual or an entity that provides financial or other “material support or resources” to terrorists.

The U.S. government has shown a willingness to pursue nonprofits under the Patriot Act for providing material support to terrorists or terrorist organizations.

It has taken action against several Muslim charities that may have had dealings with terrorists or terrorist organizations.

(ii) Criminal Liability Defined - “material support or resources” Criminal (and civil) liability may be imposed for knowingly providing “material support or resources” to terrorists and foreign terrorist organizations. The key term in the legislation is “material support or resources,” which is defined broadly as: currency or monetary instruments or financial securities, financial services, lodging, training, expert advice or assistance, safehouses, false documentation or identification, communications equipment, facilities, weapons, lethal substances, explosives, personnel transportation, and other physical assets, except medicine or religious materials. 18 U.S.C. 2339A(b) (as amended by section 805 of the Patriot Act).

Penalties include substantial fines and up to 15 years imprisonment. In 2002, federal law was also expanded to include the criminalization of financing terrorism. An individual or organization may be punished for willfully providing or collecting funds with the intention that the funds be used to carry out acts of terrorism, or for one who knowingly conceals the source of funds used to carry out acts of terrorism or to support foreign terrorist organizations (“FTO’s”). . . .

As with Executive Order 13224, an important means of avoiding criminal liability under the “material support” provision is to do some basic research on Funded Agencies prior to making a grant to ensure that they are not on the federal “watch lists.” It is also worthwhile to obtain certifications from Funded Agencies that they are not linked with terrorists or terrorist organizations.

(iii) Civil Liability

Non-profits and grantmakers should also be concerned with potential civil liability should their assistance end up in the wrong hands. Private parties are entitled to a specific cause of civil action against those who provide material support for terrorism. The Patriot Act specifically sets forth that a plaintiff can recover damages as a result of an injury to his or her person, property or business by reason of an act of terrorism, and such person, his or her heirs, survivors may sue in the appropriate district court of the United State and shall recover threefold the damages sustained, court costs and attorney’s fees.

Further a plaintiff does not have to await the determination of a criminal action before bringing a civil complaint.

The bottom line, again, is that the Patriot Act regulated material support of terrorism that was received from a U.S. agency. As far as I can tell, the concern that this could work in the other direction, with a non-U.S. citizen providing material support to a U.S. 501(c)(3) is unfounded.

Perhaps some nuance of the situation is omitted or lost in translation, and a citation to, or quote of, the language used by the non-profit might shed new light on the question. But as far as I can tell, this seems to be a case of someone being confused about the law, rather than a genuine legal concern for a U.S. non-profit.

Another possibility is that the concern relates to laws that are targeted at money laundering by foreign powers and at international sanctions directed at leaders in regimes like Syria who are believed to be associated with serious human rights or war crimes that aren't punished domestically.

The theory would presumably be that a restricted person could made tax deductible donations of property that is subject to civil or criminal forfeiture by the government (effectively a "fraudulent transfer") and could use the charitable tax deductions received to prevent a person who would otherwise owe U.S. taxes from doing so with money that wasn't theirs to give.

But, usually those statutes regulate financial and economic contributions to an organization or account by these individuals or organizations, and not to in-kind volunteer services of the type mentioned that don't involve money or property and don't give rise to a tax deductible contribution.

The logic of a rule not allowing a non-profit to receive money contributions from abroad doesn't apply to in-kind donations of personal services of individuals which don't give rise to a charitable tax deduction and can't transfer seizable assets of a foreign terrorist organization or sanctioned person.

If Osama bin Laden had done a reading of "A Christmas Carol" by Charles Dickens for a U.S. non-profit that provides recorded matter for the blind while he was alive, this would not have led to any civil or criminal liability for the U.S. non-profit. Intentional sanctions don't prohibit bad actors from engaging in providing personal services on a volunteer basis as a good deed with no economic effect.

So, it is barely conceivable, but possible, that this rule could arise from an over broad interpretation, given the purpose of the statute and the definitions of the terms used, of what a "contribution" to a domestic non-profit means.

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First off, no the Patriot Act would not stop you from participating in this organization (The Patriot Act broadened the definition of Terrorism and types of crimes that might constitute terrorism, the ability to investigate potential security threats to the United States mostly through loosening restrictions on Warrants for such investigations.).

Second and more pedantically, the Patriot Act is no longer law as of March 27, 2020 (this might have gotten lost in the news due to this being the start of Covid-19 pandemic shut downs globally). Much of the Patriot Act's laws did live on in the form of the USA Freedom Act. But in 2022, no one will arrest you under any provision of the Patriot Act. Yay!

All that said, I am not aware of any laws restricting 501(c)(3) organizations from taking donations (either in monetary or in kind) from non-U.S. Citizens or Residents. All that the label means is that the organization is tax-exempt and that donors to such organizations can deduct their donation from the taxes they owe to the government (i.e. if I owe $500 in taxes but I gave $1000 to a 501(c)(3) that year, then I don't owe the government any tax. In fact, the government owes me a $500 rebate.).

All 501(c) organizations (there are 29 different classifications) have rules about what they may and may not do and will lose their tax-exempt status if they fail to abide by those rules. Each different category has different restrictions (For example, a 501(c)(3) may not partake in any political campaigning or lobbying as part of it's position but a 501(c)(4) may (though funds used for such activities are not tax-deductible. Really the 501(c)(3) status only applies for tax purposes, so if you are not filling out a U.S. Tax Return, it shouldn't matter to you (though you may want to see if your government allows donations to foreign charities to count for tax-deductions).

Best thing to do is to reach out to the charity and ask if there are any problems with you helping given your not a U.S. resident. If there is, consider starting up a similar charity for people within your own nation... maybe even ask them if you could be a part of a chapter within your nation.

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    "i.e. if I owe $500 in taxes but I gave $1000 to a 501(c)(3) that year, then I don't owe the government any tax. In fact, the government owes me a $500 rebate.)." If you had $500 in taxable income you would get a charitable deduction carryover of $500. But $1 of charitable deduction reduces your taxable income by $1, not your tax owed by $1.
    – ohwilleke
    Jan 25 at 19:47
  • I suspect they are weary because of the nature of the in-kind contribution rather than the implications of in-kind contributions as such. These are voice recordings in potentially unknown languages.
    – grovkin
    Jan 25 at 23:04

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