Charity donations in Cayman have leapt by a massive $72 million in just five years, attendees of a symposium designed to protect non-profits from harm from money laundering and terrorist-related offences heard on Wednesday at Hotel Indigo in Grand Cayman.
The attendees of the symposium, which was organised by the R3 Foundation, heard that 485 registered non-profit organisations raised $39 million in 2019 and spent $36 million of it on good causes. That figure had jumped to $111 million by 2024, raised by 630 bodies, with $107 million used for charitable purposes.
Sandra Edun-Watler, an R3 board member, said it was not clear why there had been such a big increase.
But she suggested it could simply be because there were 165 more NPOs registered by last year, or it could come down to a bigger financial industry and people arriving from different jurisdictions as professional bodies were included as NPOs.
Edun-Watler said the increase in the NPO sector might make Cayman a more attractive target for money launderers and terrorism financiers.
“It’s possible,” she said. “We have seen in the jurisdiction an increase in fraud – romance scams and suchlike.
“There is a risk of people coming in and going into the charity sector claiming to be someone else,” she warned. “That is why we need an increase in corporate governance to see that doesn’t happen.”
Other speakers at the symposium included Premier André Ebanks, who paid a surprise visit, Governor Jane Owen and Attorney General Samuel Bulgin.
Enola Reid, of Anchorpoint Consulting, emphasised the need for good governance, strong board oversight and training.
She told the conference that “financial transparency, legal and regulatory compliance, effective risk management, stakeholder engagement and feedback mechanisms” were vital.
Reid, a lawyer and compliance expert, said, “If you set up an NPO, you should have an understanding of what your regulatory requirements are. Regulation is ever-changing, so it is crucial to understand what’s happening.”
Laura Alleyne, a senior compliance officer in the government’s General Registry, which keeps tabs on NPOs, told sector representatives that officials were there to help them keep on the right side of the law and to assist in reducing the risk of becoming embroiled in crime, such as terrorist financing.
She said that the 9-11 terror attack on the Twin Towers in New York in 2001 had changed the way the world operated.
Alleyne added, “This collective memory speaks to the profound and lasting trauma terrorism can inflict, not just on individuals, but the community and the world at large.”
She said the attack had transformed the way that the world responded to risk and caused the introduction of new laws, much tighter security at airports and ushered in the global war on terror.
“Any missteps or inappropriate use of your resources can have serious consequences for your reputation, sustainability and for the Cayman Islands,” Alleyne said. “NPOs must be aware of terrorist financing vulnerabilities.”
Alleyne highlighted that the sector could be “manipulated” into wrongdoing and the misuse of funds “under the guise of legitimate charitable activities”.
“When you understand the risk, you can target the problem without too much disruption to legitimate activities,” she said.
Alleyne added that previous risk assessments had shown that Cayman’s risk from terror financing was “low”, but that vigilance was needed to keep the country clean.
She said that at least 130 people from Trinidad and Tobago had joined the terror group ISIS in Syria and Iraq and that two men from Guyana, including a former member of the country’s parliament, were convicted in 2010 over a plot to blow up fuel tanks and pipelines at New York’s JFK airport. The cases demonstrate that terrorist activity can be found in the region.
Alleyne asked charities to be sure they knew who their volunteers and employees were and who sat on their boards.
She said, “The risks facing NPOs are real and they are complex, but they are not insurmountable.”
The R3 Foundation, set up in the wake of the COVID-19 pandemic with a $1 million donation from the Kenneth B. Dart Foundation and a commitment to match a further $4 million in donations, supports non-profits across the country.
The three ‘Rs’ stand for readiness, relief and recovery in cases of natural or manmade emergencies and disasters.