NPO TF Bank Charter & NPO Risk Assessment
Creating a common risk assessment framework for charities. Aims to reduce unjustified derisking of charities by developing a Bank Charter for consistent ML/TF risk evaluation, improving transparency and access to financial services.
About
The global NGO and charity sector was valued at approximately USD 313.29 billion in 2023. Of this, cross-border charitable flows were estimated at USD 70 billion in 2020, forming part of the broader USD 841 billion in cross-border donations (including USD 590 billion from remittances and USD 180 billion from official development aid). These funds play a vital role in addressing some of the world’s most pressing challenges—poverty, education, healthcare, climate change, social justice, and the empowerment of women and girls.
Following the terrorist attacks in the United States in 2001, the Financial Action Task Force (FATF) issued Special Recommendation VIII, which led to increased scrutiny of charities due to concerns over potential misuse for terrorist financing (TF). Despite later FATF guidance recognizing that only a small subset of charities are inherently high risk, the general application of FATF Recommendation 8 has resulted in broad-brush treatment of the entire sector as “high risk.”
This perception has led to frequent reports of de-risking by banks—where charities struggle to open or maintain accounts, or face transaction blocks that hinder their ability to deliver critical aid. Charities have highlighted these challenges as a major barrier to their effectiveness, especially in fragile and conflict-affected regions.
To address this imbalance, the GCFFC proposes the development of a Global Charter and Risk Assessment Framework for the non-profit organisation (NPO) sector. This initiative aims to:
Reduce unnecessary friction for low-risk charities by improving transparency and understanding of risk
Establish a common framework for evaluating ML/TF risks associated with NPOs
Encourage adoption of this framework by banks and financial institutions to facilitate fairer access to financial services
Key Deliverables:
The GCFFC will design and consult on a draft NPO TF Bank Charter and Risk Assessment Framework. This document will be refined through engagement with stakeholders across the charity sector, banking and finance, regulators, and policymakers. The aim is to produce a publicly available version in 2025 that can be voluntarily adopted and implemented globally.