Wednesday, July 23, 2003

Forbes Magazine reports that Cisco Systems has suspended its matching gifts program due to new anti-terrorism guidelines. Matching gifts programs typically work like this: an employee (usually of a large company) writes a check to their favorite charity and the company makes a donation of the same amount. It allows the company to get a tax deduction based on the staff's priorities, and the employees get to increase the power of their charitable donations.

Cisco's move was in reaction to new guidelines from the U.S. Treasury Department making companies responsible if their matching gifts end up going to support an organization that may be funneling money to terrorists in other countries. "The [Cisco] Foundation doesn't want to have to be a watchdog," says a spokeswoman. Last year Cisco's matching program was responsible for adding nearly $3 million to nonprofit funding. If other corporations follow suit, this could mean a major funding hit for nonprofits that was quietly ushered through under the name of fighting terrorism.

(International donations, by the way, are less than 2% of total giving. Even that number is over-stated, based on the large donations of a few large donors, such as George Soros, Ted Turner, and Bill Gates. Cisco could have fixed any potential problem by modifying their program to exclude foreign organizations.)

The Forbes article can be accessed at Forbes.com. Cisco's (short) notice is available on their web site.

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