NEFE Grants and Research Administration Strategy Statement and Procedures Concerning Counter Terrorism Practices


Prior to developing its voluntary strategy concerning counter-terrorism practices, NEFE’s grantmaking activities (i.e. grant guidelines, due diligence, administrative, grant agreements) were compared to the Continuum of Risk Factors for Foreign Recipients1 developed by the American Bar Association. Although the likelihood of NEFE awarding funds to a terrorist organization or terrorist would appear to be remote, enhancements to procedures have been voluntarily established in deference to promulgations from the Executive and Legislative offices of the U.S.

NEFE Grant Making

From its inception in 1999, NEFE has restricted its grantmaking to U.S. 501(c)(3) nonprofit organizations to conduct research and/or develop financial education projects that address an unmet financial literacy need for a significant segment of the U.S. population. Projects are approved by a NEFE Board Committee based on the project’s fit with NEFE’s funding parameters and a rigorous inquiry into the project details. If approved, funds are not awarded until a grant agreement is successfully negotiated. Terms of the grant agreement include a Performance Timeline upon which installment payments are based. The first installment is made to provide funding for the grantee to initiate project work. Unsatisfactory performance would result in withholding future installments until work is satisfactorily performed.

NEFE has enhanced its grantmaking procedures to include additional scrutiny of applicants prior to project approval. In addition, revisions to the grant guidelines and grant agreement are intended to avoid ineligible requests and specify grantee responsibility for assuring funds are used for charitable purposes.

Pursuant to the provisions of Executive Order 13224 and the USA PATRIOT Act, effective April 30, 2005 the National Endowment for Financial Education adds the following procedures to its ongoing grants administration and management due-diligence procedures for all projects considered for NEFE funding.

1) NEFE grant guidelines were revised to state that NEFE will not permit organizations to re-grant NEFE funding. In practice NEFE has not allowed re-granting—the guidelines and grant agreement now specifically state this.

2) NEFE grant guidelines were revised to specifically state that NEFE does not fund foreign organizations. Again, in practice, NEFE has not funded foreign organizations.

3) NEFE revised its grant process in May 2006 with a Concept Inquiry Form as the first step in the application process. On this form, the following statement informs the Primary Contact that information on the form may be utilized to determine compliance, as follows:

By submitting this Concept Inquiry, the Principal Contact and applicant organization acknowledge their understanding that NEFE may use the information to determine eligibility and assess the project idea, including use of this information to determine compliance with NEFE’s policies, the USA Patriot Act and applicable laws and regulations with regard to anti-terrorist financing.

4) The 501(c)(3) status of applicants will be verified utilizing MicroEdge GIFTS Watchlist Plus®. In addition, other lists will be checked as follows:

  • For each Concept Inquiry that warrants further consideration NEFE will utilize an automated list-checking service to check terrorism watch lists issued by the U.S. government, the European Union, and the United Nations prior to referring a project to the Board approval committee for consideration. Both the name of the 501(c)(3) organization and the name of the project principal will be entered into the database of the automated list-checking service.
  • The list-checking service will verify the government watch lists are up to date and scan for the names of the organization and project principal.
  • Any “hits” (i.e. indication that an organization or project principal name appears on the list) will be noted. This information will be shared with the Board approval committee who will determine whether the project has sufficient merit to continue with in-depth checks. Projects deemed to have sufficient merit will be considered at the next scheduled Board approval committee meeting as follows:

i) Projects found to have false-positive hits (i.e. the organization and project principal were found not to be terrorist threats) will be given further consideration for funding.

ii) Inconclusive findings or true-positives will be reported to the Board approval committee and will not be given further consideration for funding unless so directed by the committee.

5) The NEFE Grant Agreement boilerplate was revised to require that the grantee agree not to re-grant any funds granted by NEFE; ensure that NEFE funds are not directly or indirectly provided to organizations or individuals that are linked to any terrorist organization or individuals; and that the grant agreement shall not be assigned or otherwise transferred to any third party without prior written consent of NEFE.

Effective Date

These counter-terrorism strategies were put into effect on April 30, 2005 and revised as noted2.

Revisions to Counter-terrorism Strategy Statement

The counter-terrorism strategy statement may be revised from time to time as may become necessary to remain in compliance with federal directives or reflect changes to the grants program.

1 We could find no risk factor statement related to U.S. recipients.

2 Revised June 1, 2008