In a letter sent Nov. 6, a group of charities and nonprofit sector leaders asked the Treasury Department to release frozen funds belonging to charities designated as supporters of terrorism "to trustworthy aid agencies that can ensure the funds are used for their intended charitable purposes." According to the letter, the request "takes no position on whether these designations were appropriate. Instead, [the authors'] concern is with ensuring that charitable funds are put to good use." The Treasury Department's Office of Foreign Assets Control (OFAC) lists 43 charities as supporters of terrorism on its Specially Designated Nationals list, including five U.S.-based charities. In its 2005 Terrorist Assets Report to Congress the Treasury Department estimated that these designations have resulted in more than $13.7 million in frozen assets. Research of public sources indicates that none of these blocked funds have been released for charitable purposes. The Treasury Department has rejected several requests from designated U.S. charities to have funds released for charitable purposes:

• In 2002, the Benevolence International Foundation asked that its funds be transferred to a children's hospital in Tajikistan and Charity Women's Hospital in Dagestan, with appropriate safeguards to ensure safe delivery of the funds.
• In 2004, the Holy Land Foundation asked that $50,000 of its funds be transferred to the Palestine Children's Relief Fund.
• In 2006, KindHearts for Charitable Humanitarian Development asked that its funds be spent on charitable works through the USAID program or any other nongovernmental organization, and requested priority be given to refugees of the 2005 Pakistani earthquake, since most of the funds had been earmarked for that purpose.

The letter from 20 organizations and two philanthropy experts notes that "[m]ost of these funds come from relatively small donors who intended to provide food, medical care, shelter, education and other basic needs to refugees, people displaced by war or famine and others in need. Many of these donors are Muslims whose giving fulfills a religious obligation." Noting that humanitarian need continues to grow and substantial time has passed since many of the funds were frozen, the letter calls on the Treasury Department to update its policy. Under the Code of Federal Regulations, the Treasury Department has the legal authority to release frozen funds pursuant to a special license application from the designated organization. (See 31 CFR 501 and 597.) The recent letter specifies that funds should only be released when the governing body of the designated group makes such a request. Where the group is no longer active and no legal owner of the funds can be identified, the letter asks the Treasury Department to develop a process that will "ultimately allow these funds to fulfill their charitable purposes." The letter reflects growing concern over the chilling impact of Treasury Department policies on international grant making and charitable giving. Donors may choose not to give because they cannot be certain that their contributions will reach those people and causes they seek to assist. This chilling impact is most keenly felt by Muslim-American communities, where the religious obligation to give to charity is frustrated by fear of government reprisal. The New York Times recently reported drastic reductions in giving during this year's Muslim holy month of Ramadan. Signatories of the recent letter called for reforms that will not only allow more funds to achieve their intended charitable purposes but that may also help reinvigorate Muslim charitable giving. The signatories requested a meeting with Treasury Department officials to discuss the proposal in more detail. Among the letter's organizational signers were the Council on Foundations, the Center for Global Justice and Reconciliation, Independent Sector, the Global Fund for Women, the Muslim Public Affairs Council and OMB Watch.