Together Project Advocates for Financial Access

In March 2017, Charity & Security Network released a report entitled “Financial Access for U.S. Nonprofits Reveals Broad Scope of Problem,” which conveyed how prevalent issues of banking access were in the nonprofit sector. In a survey of 305 nonprofits in the United States who work internationally, two-thirds stated that they have issues with financial access. About 6% of nonprofits have had their bank accounts closed, many without prior notification or reasoning. Delayed wire transfers specifically, which many of Together Project’s founders consistently experience, have affected 37% of the nonprofits from the report. When wire transfers are delayed, sometimes for months, it can hinder implementation of programs, postpone payment of staff, and force nonprofits to defer to riskier forms of payment such as cash transfers. These are barriers that InterAction’s members must designate extra time and money to, which in turn inhibits them from dedicating their full attention to implementing programs on the ground.

The recent research and developments on de-risking inform Together Project’s advocacy on behalf of its members and create partnerships to advance these issues. Together Project has held multiple sessions to inform the public and relevant parties about the scope of this issue, specifically how discriminatory practices have affected members. Over the past year, Together Project Advocacy Team organized three Capitol Hill outreach weeks , focusing on both the House and Senate, as well as republican and democratic offices. In addition, the team attends relevant subcommittee hearings on de-risking and provides congressional staff members with supportive documentation and information about the impact of de-risking on nonprofits.

With all the work that has been coordinated by Together Project, its members and its partners, the difficulties of financial access gained further attention on Capitol Hill from the House Financial Services Committee. The Committee held a hearing entitled “International and Domestic Implications of De-Risking” on June 26, 2018 to discuss many barriers nonprofits encounter.

The subcommittee chairman, Blaine Luetkemeyer, opened the hearing, explaining how strict regulations enacted during the financial crisis were now hindering the accessibility of the banking system for many throughout the humanitarian and nonprofit community. Although the impact these regulations have had in the United States has been examined some in the past, this hearing specifically focused on how regulations affect governments, organizations, businesses, and individuals on the global scale. Luetkemeyer stated:

“Banking relationships with so-called high-risk clients have become cost prohibitive for financial institutions due in large part to heightened compliance expectations. As a result, many institutions have opted to terminate relationships. These decisions resulted in an elimination of consumer and small business access to financial products and services, a decrease in the availability of money remittances, and reduced flow of humanitarian aid globally.”

At the hearing, Sue Eckert, adjunct senior fellow at the Center for a New American Security and one of Together Project’s partners, presented the findings of the Charity & Security Network report as well as the work the World Bank has conducted on this issue. She shared with the committee the hardships that as many as two-thirds of nonprofits face when they try to work internationally. She stressed the importance of the humanitarian sector and the role the of United States in eradicating this issue, nonprofits will continue to be a significant driver of humanitarian aid and development as the world deals with an increase in conflicts, protracted crises, and natural disasters. To respond to these humanitarian issues in a swift and precise manner, Sue explained, “funds must be able to move across borders in a timely and predictable fashion.” This is pivotal for organizations under the Together Project as they are carrying out work in many regions where conflict is present.

Congressman Al Green reiterated the importance of banking issues, stating his personal contact with nonprofits who had experienced these issues. He expressed concern for the difficulties in the banking sector such as de-banking and de-risking. He, again, mentioned the issue of prolonged wire transfers, which he had heard firsthand from nonprofits, that can gravely impact organizations’ work.

In the past year, Together Project has seen this fundamental issue gain traction. Its allies now include various international organizations, nonprofits, and relevant policy-makers that could directly impact this process. Although InterAction members still face many obstacles, this issue is making encouraging headway. Together Project continues to advocate for InterAction members against the current difficulties they face in the banking sector. Future actions will focus on providing a place for information-sharing, building the network that the group has already created to tackle discrimination in the sector, and educating the public about the gravity of this issue. The advocacy team will continue to call on policy-makers and relevant parties to prioritize de-banking and de-risking with the belief that collective action can prevent further damage in the future. Together Project, along with established and future partners, is equipped to move forward and create positive change for those who carry out some of the most important work of our time.

View the complete panel and watch the hearing on “International and Domestic Implications of De-risking”