Since nonprofits are a global business, there are some rules and regulations that apply to these foundations. Anti-bribery compliance laws are now extending to nonprofits that operate overseas. As such, your clients should evaluate the Foreign Corrupt Practices Act (FCPA) and how it applies to their organizations. Further, they can protect their operations with a Nonprofit Insurance Program.

Even though the FCPA has not launched any formal actions against nonprofit organizations as of yet, there have been several investigations. In addition, the U.S. Department of Justice has formally announced that it considered nonprofits to be “domestic concerns” in relation to the anti-bribery statute.

William McGovern, a government investigations lawyer, stated “U.S. prosecutors have steadily widened the net of FCPA enforcement over the last several years. The message is clear: Parties that make improper payments that fall within the FCPA law will be investigated. From the government’s perspective, a bribe paid by a nonprofit entity could have the same damaging effect on global commercial standards as a bribe paid by a for-profit entity.”

What’s more, Law 360 states that well-informed nonprofits that operate at the global level are putting just as much effort into FCPA compliance as for-profit industries that have been hit by enforcement sweeps.

However, this regulation requires more than just not bribing foreign officials. It requires a deep understanding of the process of doing business overseas and how to collectively respect the foreign laws and principles.

McGovern also explains that meeting the FCPA’s business nexus element requires prosecutors to establish that payments or gifts were given with the intention of obtaining or retaining business, and in the nonprofit arena, that could pose a challenge for prosecutors in some circumstances.

While it may not be a reassuring public move for the DOJ to investigate a nonprofit, these enforcement sweeps encourage nonprofits to promote good business practices and correct any mistakes, whether they were intentional or not.

At Charity First, we are an established leader in the nonprofit sector and offer a range of coverages to adequately protect your clients. For more information about our specialized products, contact our experts today at (800) 352-2761.