Muslim charities and immigrant-owned businesses are facing growing discrimination from financial institutions, a trend that threatens their ability to provide humanitarian services to the people of Palestine effectively. This comes as financial institutions carry out de-risking practices, targeting organizations run by Muslims.
The Palestine and Israel war has brought about unprecedented levels of destruction, particularly for the people in the Gaza Strip. In response to the crisis, various Muslim charities and organizations have sought to provide humanitarian services for the people of Palestine.
However, amid escalating humanitarian needs in Palestine, these organizations face significant hurdles as financial institutions increasingly engage in “de-risking,” a practice disproportionately targeting Muslim-led organizations. This trend, now referred to as “Muslim while banking” not only impedes aid distribution but also highlights systemic discrimination against Muslim and immigrant-owned entities.
LaunchGood, a crowdfunding platform supporting humanitarian efforts in Gaza, is one such organization that is affected. The co-founder, Amany Killawi, explains that regardless of the fragility of the Isreal-Palestine subject, politicizing humanitarian aid and risk-averse banking practices create a terrible situation.
Likewise, pro-Israel lobbying and adverse media campaigns further complicate the situation, with baseless accusations of ties to armed groups damaging the reputations of these charities. So, even though these charities meet all legal and regulatory requirements, they face unwarranted account closures and denied access to essential financial services.
The problem also extends beyond financial transactions. For instance, service providers like Wise, a contractor payment service, and Cledara, a subscription service, have discontinued their support for LaunchGood.
The reason behind the discontinuation was vague, as LaunchGood maintained that they were provided with no transparent explanations. Still, while institutions claim neutrality, the lack of accountability leaves charities stranded and unable to operate effectively during critical times. This discriminatory trend is not isolated.
Impact of these trends on Muslim communities
Research by Youssef Chouhoud, a political science professor at Christopher Newport University and fellow at the Institute for Social Policy and Understanding, reveals that Muslim-run nonprofits face account closures and transaction restrictions at an alarmingly high rate.
The consequences of these financial restrictions are dire. In the context of Gaza, aid delivery is critically delayed or halted, leaving millions of Palestinians without access to food, medical supplies, and other necessities. Pro-Israel lobbying and adverse media campaigns further complicate the situation, with baseless accusations of ties to armed groups damaging the reputations of these charities.
Ilhan Omar, a U.S. congresswoman, has highlighted the devastating impacts of de-risking on Muslim and immigrant communities, calling the practice unacceptable. Many lawmakers and advocates are urging transparency and equity in banking practices. Letters from legislators, such as Senator Elizabeth Warren, to major banks signal a shift toward addressing this systemic issue, though progress remains uncertain.
The discriminatory policies also extend internationally. Anas Altikriti, a British-Iraqi founder of The Cordoba Foundation, recounts how his accounts and those of his family were abruptly closed, citing unfounded terrorist designations by risk analysis firms. Such labeling not only disrupts operations but also exemplifies the pervasive prejudice Muslim organizations encounter.
Efforts to combat this trend are underway. LaunchGood is working on becoming its payment processor to reduce reliance on traditional banking systems. Additionally, Muslim community leaders continue to advocate for awareness and legislative action, emphasizing the importance of equitable treatment in financial services.
As humanitarian crises like Gaza intensify, the need for a fair and inclusive banking system becomes even more urgent. Without systemic change, the ability of Muslim charities to provide life-saving aid remains largely uncertain.