Assessing New Anti-Terrorism Policies

One Organization's Approach

Ruby Lerner

We are very pleased that Ruby Lerner, executive director of Creative Capital, took up the challenge of writing about anti-terrorism language in grant award letters. As an intermediary organization, Creative Capital is in the position of being both a funder and a grantee. This dual role, shared by many other GIA members, gives Ruby an especially wide view of the topic.

As part of its effort to combat terrorism after September 11, 2001, the United States government enacted new laws and policies that began to affect, among other things, the way it monitors private foundations and nonprofit organizations, particularly those with international programs and grantees. The Patriot Act, signed into law in October 2001, imposes penalties on any entity that (knowingly or unknowingly) provides support to terrorists, and in June 2002, federal law criminalized the “financing of terrorism.”

The philanthropic community has been working hard to sort through the legal implications for their work in a new context where little precedent has been set. While clearly funders are committed to protecting their assets and ensuring the continuity of their and their grantees' work, the process of understanding the new terms also provides an opportunity for both donors and grant recipients to revisit founding principles and recommit to core values.

In early summer of 2004, Creative Capital received a memo from the Ford Foundation describing changes to their standard grant letter. The new language added was: “By countersigning this grant letter, you agree that your organization will not promote or engage in violence, terrorism, bigotry or the destruction of any state, nor will it make sub-grants to any entity that engages in these activities.”

We recognized that this likely would be just the first of similar communications from other funders. We were correct. As grant award letters began to arrive in the fall, many contained language similar to: “ accepting these funds, you certify that funds will be used in compliance with all applicable anti-terrorist financing and asset control laws, regulations, rules and executive orders....” Two foundations required extensive documentation of our process prior to even offering us a grant contract. One said that they “...would like to understand the due diligence measures you will employ that will enable you to ‘know your grantees’—and to ensure that no funds could be diverted to support terrorism or terrorists.”

As defined in the executive order on terrorist financing (Executive Order 13224 issued by President Bush after 9/11) terrorism is defined as “an activity that 1) involves a violent act or an act dangerous to human life, property, or infrastructure; and 2) appears to be intended (a) to intimidate or coerce a civilian population, (b) to influence the policy of a government by intimidation or coercion, or (c) to affect the conduct of a government by mass destruction, assassination, kidnapping, or hostage taking.”

Certainly, no arts organization would knowingly support terrorist activity as defined above. However, Creative Capital's director of resource development, Celia O'Donnell, and I felt that as an intermediary providing multi-faceted support to innovative individual artists in all disciplines, other funders might perceive us as a risk. As a result, we felt that this new language required full discussion by the board of directors prior to our signing any award letters.

The Questions for Creative Capital
Creative Capital came into being as a direct result of the Culture Wars of the 1990s when most awards to individual artists were eliminated at the federal level. At the heart of our work is a commitment to artistic and intellectual freedom, and we believe that critique, as uncomfortable as it may sometimes be, advances society. Given Creative Capital's background, we are especially sensitive to changes in philanthropic policy that could have a chilling effect on artistic expression. We are sensitive to both overt censorship and the self-censorship that can begin to creep, imperceptibly, into funding deliberations.

Given our provenance, we determined that the primary questions for Creative Capital were: 1) Should we sign grant letters that contain anti-terrorism language? 2) If we were to sign such letters, would we need to “pass along” similar anti-terrorist language in contracts with our grantees? And 3) should we check to see that none of our grantees appeared on any of the several government terrorist lists?

Our Process
We reviewed many recommended documents (see the list on Creative Capital's web site:, participated in a conference call hosted by the New York Regional Association of Grantmakers, conferred with peers in the arts community and with other nonprofit organizations, and spoke with two attorneys. Based on all the information we gathered, our board's executive committee assessed Creative Capital's real risk of ever supporting a terrorist (low) and made a set of recommendations to the full board of directors.

With these recommendations in hand, Creative Capital's board decided the following at its December 2004 meeting:

  1. It agreed with the executive committee's recommendation that Creative Capital should sign all award letters from its funders, even with the anti-terrorism language. As most grant contracts already include language requiring the recipient to obey all laws, the terrorist provision therefore seems somewhat redundant. While no one on the board or staff was happy about the inclusion of this language, everyone felt that we could live with it, since Creative Capital is certainly committed to obeying all laws.
  2. The full board also agreed with the staff and executive committee that it was most important NOT to include the anti-terrorism language in our contracts with grantees. The organization was initially advised by two attorneys that we should consider including the language in our contracts, mostly as cover. The board and staff pointed out that 1) nothing you sign actually protects you from prosecution, since assets can be frozen whether you wittingly or unwittingly provide support to terrorists; and 2) our multi-tiered process of peer review and selection (more than 100 people were involved in our most recent grant round as recommenders, readers, evaluators, and panelists) and our intensive work with artists and projects over an extended period of time were far better guarantees that we would be in compliance with the new regulations than grant-letter language could be. Our attorney then advised us that if Creative Capital's funders accepted our process, we would not have to include the language in our contracts with artists.
  3. The board unanimously rejected a recommendation that the executive committee had made reluctantly: that, due to possible pressures from funders, the organization may need to check the various terrorist lists (or “designated individuals” lists) for grantees' names, despite the unreliability of such lists. The full board felt that this step represented unnecessary surveillance, that the lists are inconsistent, and that Creative Capital's normal operating procedures were sufficient. The executive committee supported the full board's decision. As a result of this decision, the staff had to renegotiate contracts with two funders that were expecting us to check the “watch” lists. Both negotiations proved successful.
  4. Finally, the board also asked us to state explicitly in our letters to funders that “Creative Capital is fully committed to intellectual and artistic freedom. We were founded for the purpose of finding, supporting, and embracing diverse, innovative voices, and we remain committed to this purpose.” Further, the board created a committee to see if we can be part of a coalition of organizations to work with funders on the overall question of responsible implementation of anti-terrorism guidelines. The board also decided to review the situation in three months.

Ultimately, following a lengthy review process, we agreed to do only what we already do. However, the extensive review provided us an opportunity to rearticulate and recommit ourselves to our founding principles and core values. We pride ourselves on our support of many “ists”—humorists, satirists, activists, and “hacktivists.” But we would be horrified to learn that any of our resources, financial or human, had gone to support terrorists or terrorist activity—horrified and pretty surprised.

In May 2004, I was certainly horrified and surprised when one of our grantees, University at Buffalo art professor Steve Kurtz of the acclaimed Critical Art Ensemble, was detained for twenty-two hours by the FBI following the untimely death of his wife. His wife's body, his house, cat, and car were seized along with computers and research materials for a new project. Critical Art Ensemble's mission is to demystify concepts like biotechnology and to question whose interests are being served by certain kinds of scientific research. Initial charges of bio-terrorism under the Patriot Act were quickly downgraded to charges of mail and wire fraud. There will be a defense hearing in early spring 2005, and we remain hopeful that all charges will be dropped. (See for details.)

This incident reveals that perhaps the gravest danger we all face is that the country's legitimate need to protect itself will be overtaken by fear and hysteria. It has happened here before. In a climate of fear, the definition of who is a witch or an enemy or even a terrorist can quickly expand to include those whose work embodies the essence of the vigilance and continuous questioning that a true democracy requires. It is the unwavering commitment to principles that include artistic and intellectual freedom that give this country its very soul and that have historically made us a beacon to millions around the world.

Additional research for this article was provided by Celia O'Donnell.