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"My initial reaction is, we only have so many resources to track something like that," says Eleni Eliades, development and operations manager at Fenway Community Health. FCH received $2600 through CFC last year. "We get a monthly check. It’s steady, so it helps us plan," Eliades says. Yet compliance with the new CFC requirements threatens to nullify that advantage. It can take two to three days for organizations to check their employee rosters against the watch lists once. With 160 full-time employees, and the constant need to track current and prospective hires against the massive watch lists, FCH could easily find that the cost of compliance exceeds the money it gets from CFC.

It only gets worse if the charity does find a match on a watch list — which, after all, comprises those who are technically just suspected terrorists. "If you start firing people or not hiring people" based on the watch lists, "you can be sued," Greeley says.

You’ll also look like you’re profiling Arab-Americans. Common Arabic names such as Ali, Abdullah, Nasir, and Nazir Khan, which are all listed in Massachusetts on whitepages.com, also appear on the Treasury list. Not that an Anglo name guarantees safety. Senator Edward Kennedy recently was prevented from boarding an airplane when his name came up as a match on one terror-watch list. ACLU executive director Anthony Romero found a namesake on one. And civil-liberties groups have shown that removing an innocent person’s name is at best an arduous process — when there even is a process.

"It’s really not clear what nonprofits should do if a name matches up," Greeley says. The only additional distinguishing information provided on the Treasury watch list for most names is date of birth or country of origin — but employers are prohibited from asking potential employees for such information by federal anti-discrimination laws.

So what is a charity supposed to do if it finds an employee’s name on a terror-watch list? Nobody knows. "There is really not any guidance on that," says Lisa Ducette, who oversees the CFC of Eastern Massachusetts. Asked specifically how CFC recipients should proceed for now, a national spokesperson for the program said, "We are unable to comment at this time." Even as big and sophisticated an organization as the United Way of Massachusetts Bay is lost. "We are in contact with our lawyers to ensure that we are in compliance — whatever that may end up being," says spokesperson Jeffrey Bellows.

IT’S TRUE that the US government imposes security requirements on nonprofits that receive federal funding all the time. So do state governments, dating back at least to the years of greatest concern about the Irish Republican Army. Even cities do it. "In Cambridge, you once had to say that you don’t do business with Burma," says Lori Tsuruda, executive director of People Making a Difference, which participates in the CFC program.

But in 40 years of operation, this is the first time the CFC has imposed this type of restriction. The difference, Strauss says, is that this is not government funding, but individuals’ personal money that ends up being administered by a federal agency — in this case, by the federal government’s top human-resources department, the Office of Personnel Management. Whether that distinction makes the CFC subject to executive orders like this one is a matter for lawyers to argue, says Strauss.

He adds that the central question is how far the Bush administration can push the "unusual and extraordinary threat" of terrorism, as cited in the executive order, to implement this policy without judicial or congressional review. "It’s one thing to say that you want the power to capture money that’s in a [terrorist’s] bank account," he says. "It’s another to create a regime of ongoing [record] checks in hundreds of charitable organizations."

Whatever the fate of the CFC requirement, it has helped send a ripple of fear through the not-for-profit industry about putting charitable donations in terrorist hands. The federal government’s Agency for International Development now requires a certification similar to the CFC’s. The private Ford Foundation, which distributes billions of dollars a year, began checking its recipients’ names against government terror-watch lists this year. The Rockefeller and Mott Foundations have begun requiring pledges similar to CFC’s. Locally, a spokesperson has confirmed that the Boston Foundation has begun checking recipients of its international grants against watch lists, and recipients of its domestic grants against the Internal Revenue Service’s list of organizations whose assets have been frozen.

And once prodded, more charities are likely to move in that direction, regardless of civil-liberties repercussions, says Pitts. "A lot of organizations are saying, ‘Hey, we’re against terrorism, this can’t be a bad idea.’" Strauss agrees. "What the not-for-profit industry cannot afford is a series of exposés about money going to Al Qaeda," he says. Dana-Farber Cancer Institute, which runs the Jimmy Fund — and receives about $60,000 of CFC money a year — already conducts background checks on employees that include terror-watch lists, through an outside firm, according to Bill Schaller, Dana-Farber’s director of media relations.

The CFC policy itself, however, probably lies in the hands of those federal employees with their pledge cards. If they play along by pledging their money to charities that have agreed to the terror-watch-list requirement, then the Bush administration will get its way. If they withhold their donations in protest, CFC will have to reverse course. One person recently sent Amnesty International a sizable contribution — bigger than his usual donation through CFC — "because he was so outraged," Pitts says. Several have sent donations to the ACLU in support as well, Whitfield says. How many others follow suit could make or break this policy.

David S. Bernstein can be reached at dbernstein[a]phx.com