Thursday, April 28, 2011

Funding, Where Terrorist Organizations get their Money

     When a business or organization is trying to be put together, usually fundraising or funding has to occur in order for a business or organization to operate. A terrorist group is a form of an organization; meaning funding has to occur in order for a terrorist group to be able to operate. So the question to ask is how are terrorist organizations receiving funding ? White (2009) reveals three different ways terrorist groups receive funding; illegal sources, networking, and charities. (p. 59). It is known that gaining funding through illegal sources is not uncommon among terrorist organizations. Kaplan (2006) reveals that illicit drug trade is a major source of income for many terrorist organizations. For example, the Revolutionary Armed Forces of Colombia (FARC) is known to have been long involved in cocaine trade in order to help finance FARC’s operations. The income coming from the cocaine trade is allowing FARC to able to have funding to not only operate as an organization, but also to have access to equipment that will help carry out FARC’s operations. Gupta and Perez (2002) discuss how illegal drugs are marketable almost everywhere allowing for easy access to anyone looking for drug sells. Meaning, illicit drug trade is seen to be the most reliable source of income in the world, where a constant demand for drugs is beginning to increase (Gupta and Perez, 2002). This is an easy way for terrorist groups to able to obtain a large amount of funding. Drugs are always on a constant high of demand, meaning that drug production is constantly continuing to grow. The more the people want drugs, the more the drug dealer needs to produce these drugs in order to make sells. This is why many terrorist groups will tend to go towards illicit drug sells because it is an easy way to gain funding. Not only are illegal sources a form of funding for terrorist groups, but charities are also another form of funding terrorist groups receive..

Charities, aka donations, are another largest source of income for terrorist organizations to receive funding. Unlike illicit drug sells, charities are a legal way for terrorist groups to receive funding. Kaplan (2006) discuss that one of the pillars of Islam, zakat, describes how Islam people should give a proportion of their wealth to charity. A perfect example of this would be the Jihad. In frontline’s video, Al Qaeda’s New Front, describe the Jihad receiving charity of weapons, money, and clothing because the people felt that the Jihad were fighting for right cause ( The Jihad were committing terrorist attacks because the Jihad felt the policies being made in the Middle East were going against the Muslim religion. The people could see this as being a proper argument for fighting back. Fighting for Islam is Jihad’s way of promoting their radical cause when receiving charity from its people. White (2009) states that many of the people who donate to these terrorist organizations believe the efforts they are supporting are not terrorist operations (p. 62).  This is why many terrorist organizations receive charities as a means of funding. Many of the people of the Middle East truly believe that terrorist groups are fighting for its people as well as fighting for the Muslim religion. This can be seen as protecting Middle Eastern countries from other countries trying to reform the Muslim people and this is seen as an attack not only the people, but Muslim religion.

The Hawala system is another type of funding terrorist organizations receive. First, what is the Hawala system? The Hawala System is a system of exchanging money based on trust relationships between money and dealers (White, 2009, p. 62). The Hawala System allows for money to be transferred without using any type of money or moving funds from one country to another (p. 62).  This allows for networking to occur among legitimate business and terrorist organizations, where a trust relationship begins to evolve. Kaplan (2006) discusses that many terrorist organizations attempt to operate “legitimate businesses”, which allows for profits to be generated between a business and a terrorist group. So what is this advantage of the Hawala System? The Hawala system allows for no record of money being moved, no tax records exist, and it based on trust where a special relationship between the businesses and terrorist organizations is formed.. The Hawala system allows terrorist organizations to be capable of becoming involved with the businesses that fund them. For example, Bin Laden operated a string of retail honey shops through out the Middle East where Bin Laden was able to generate revenue through money and weapons being concealed in the honey containers (Kaplan, 2006). Bin Laden was able to get involved with a business that allowed for weapons and money being concealed in honey containers, representing the special relationships between terrorist organization and a legitimate business.

In order for a terrorist organization to able to operate properly, funding needs to occur. Meaning, terrorist organizations can receive funding through illegal sources, through networking, or through charities. Because of these options, this allows terrorists group to able to carry out its operations.


Frontline (2005). Al Qaeda’s New Front. Retrieved on April 26, 2011 from

Gupta, R. and Perez, M. R. (2002). Funding Terrorism: Sources and Methods.
Retrieved on April 27, 2011 from

Kaplan, E. (2006). Tracking Down Terrorist Financing. Retrieved on April 28, 2011

White, J. R. (2009). Terrorism and Homeland Security. Belmont, CA: Wadsworth
Cengage Learning.

1 comment:

  1. I am surprised that terrorists groups get funds through donations. I had believed that all of thier money came through illegal sources.