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Compliance
Our procedures enforce banking and IRS eligibility requirements and ongoing monitoring across all of our products.
Compliance on Chariot.
Introduction
As a facilitator of DAF giving and grant payments at scale, it is critical for Chariot to have a compliance program that meets the highest bar in the industry. We administer our compliance program in three key verticals: Identity Verification, Gift Eligibility and Transaction Monitoring. This is managed by a capable internal team, alongside key external partners.
Compliance verification.
Three Levels of Advanced Diligence
There is significant risk involved with sending grant payments to nonprofit organizations. It’s easier than ever to falsify documents, impersonate individuals and misdirect funds.
That’s why on Chariot, we practice 3 levels of advanced diligence in our Compliance Verification, to ensure the right person, with the right authority, at the right organization can receive funds safely.
Organizational Eligibiltiy
EIN Eligibility
We conduct a compliance review on an organization’s EIN to determine if they have an eligible “Nonprofit Code” and are in “Good Standing”.
Internal Databases
We have developed a proprietary internal database for organizational eligibility, which includes 6 different primary data sources that are all updated on a daily or weekly basis:
- IRS Business master File
- IRS 990 Filings
- IRS Publication 78
- OFAC Sanctions
Additional Documentation
If an organization does not pass the initial screen, we request additional documentation to evaluate eligibility under common exceptions - such as religious organizations.
Gift eligibility.
Gift Eligibility
Donor Advised Funds have important restrictions on when and where they can be used for donations. There are several layers of protection we deploy to ensure that any grant recommendations submitted via DAFpay are as compliant as possible.
1. Organization Eligibility
DAFpay can only be rendered for an EIN that meets strict DAF eligibility criteria (described under Identity Verification: Organizational Eligibility).
2. Legal Obligations
Our contracts and Terms of Service provide legally enforceable obligations for donors to only use DAFpay for permissible grant recommendations and for nonprofits / fundraising platforms to deploy DAFpay in permissible fundraising scenarios.
3. QA Checks
Our Partner Success Team does Quality Assurance checks on DAFpay implementations with Fundraising Platform partners before they can be activated, to make sure DAFpay is not used on galas tables, tickets, and for other impermissible use cases.
4. Ongoing Monitoring
Our Partner Success Team also periodically reviews DAFpay implementations to enforce ongoing permissible use.
5. DAF account requirements
DAFpay is set up to enforce DAF-specific requirements like minimum gift size, available balance, user permissions, etc.
6. Gift initiation transparency
Chariot’s DAF partners are able to see more detail on DAFpay gifts, such as the exact URL of the webpage where the gift was initiated, to enhance their due diligence.
DAFpay Limitations
It’s also important to clarify what Chariot does **not** handle when it comes to gift eligibility.
We have no ability to circumvent any DAF provider’s internal review and approval process. Our practices described above are highly effective, but DAF providers still have the ultimate decision-making power as to whether to initiate a grant or not based on their own eligibility requirements.
Transaction Monitoring
Chariot’s transaction monitoring procedures are designed to ensure robust oversight of financial activities relating to Chariot Deposit Accounts*. We systematically track and analyze all transactions for various key risk indicators including:
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Abnormal user behavior
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Layering activities
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Unusual movement of funds
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Large or high volume transfers
Note: Transaction Monitoring refers to money movement in and out of Chariot Deposit Accounts. These functions are not performed on DAFpay grant requests, which are governed by our Gift Eligibility procedures described above.
Key partners.
We utilize FS Vector, the top fintech compliance firm, as compliance counsel. Our engagement has included developing our internal Compliance Program from the ground up, developing all policies and protocols, and ongoing support.
Column N.A. is a nationally chartered bank with an annualized transaction volume exceeding $1 trillion. Other program managers include companies like Brex, Mercury, Wise, and Bilt. Column was built by developers from the ground-up, making it the leading developer bank to power modern, performant experiences.
Other key details on Column include:
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Column maintains a liquid balance sheet to support payments, with over 100% of the Bank’s deposit base available in cash or other immediately available sources of funding.
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Column is more than 2x the “well-capitalized” regulatory threshold.
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Column generates profits from various income streams, resulting in more stable earnings profile across various rate environments.
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