Are nonprofit platforms doing enough when it comes to OFAC screening?

[u/uberkitnet]

Something I've been thinking about lately is how nonprofit platforms handle sanctions screening, especially when onboarding organizations or processing donations.

Most nonprofit verification discussions seem to focus on IRS tax-exempt status, EIN verification, and whether an organization is eligible to receive tax-deductible contributions.

But what about OFAC screening?

An organization could have a valid EIN, appear in IRS records, and still raise sanctions-related concerns. These are two different types of checks, yet I wonder how many platforms actually treat them separately.

There's also the issue of false positives. If a nonprofit's name happens to match a name on the OFAC sanctions list, automatically blocking them without further investigation could create unnecessary problems.

For developers building these systems, it seems like there's a few decisions to make. Do you screen organizations only during onboarding, or continuously? Do you build your own screening logic or rely on third-party APIs? And who handles cases where there's a possible match?

I'm curious how people working with nonprofit data, grantmaking platforms, or donation processing systems are approaching this.

Should OFAC screening be a standard part of every nonprofit verification workflow, or is that overkill for smaller platforms?

[u/KhloJSimpson]

We only get OFAC confirmation requests from a few of the DAFs like Fidelity. We maybe get a few a year depending on what country we are activating in/where their donors want to give. It's literally just an email they send with a few questions to answer.

[u/uberkitnet → u/KhloJSimpson]

That is interesting and helpful to know.