FRAMINGHAM (10/08/2003) - Charitable giving is becoming another risk management decision for companies to weigh. For years corporations have given money directly to charities and have often matched employee donations. But potential liability prescribed by the USA Patriot Act has put on the brakes. The act makes it a federal offense to financially support terrorism. Unless companies are willing to follow the money trail of every donation they make, they could be held criminally liable for their charitable givings. "(Executives) are just now identifying that they have a real criminal problem on their hands that is on par with Sarbanes-Oxley," says Craig Wichner, CEO of KindMark, a provider of online corporate giving services. "Any company that isn't concerned about this doesn't understand the problem."
About 70 percent of large corporations have some sort of charitable giving program. Wichner points out that in some cases those companies support 20,000 to 30,000 charities apiece. Screening every charity is a logistical nightmare. The government has criteria that it uses to screen charitable organizations, and companies might be expected to follow the same procedures.
KindMark's Web platform automates the donation process for companies, but because of the Patriot Act, the company has had to take on the charity investigation process for its customers. KindMark screens all charities before they get listed on its site and again before money is sent. The company has more than 850,000 approved charities on its platform. But the wording of the Patriot Act is vague, and regardless of how companies try to address the tracking of charitable giving, it's a judgment call as to whether they are providing a "reasonable" degree of screening. "Companies that support these good programs deserve to do it without the fear or concern of being named (as a supporter of terrorism)," says Wichner.