Understanding how terrorist organizations fund them is an essential step in targeting them more effectively. While there are standard trends, it’s vital to look at the specifics of each organization to understand how they finance their activities. The Foundation for Defense of Democracies, (FDD), created the Terror Finance Briefing Book to educate policymakers on how terrorist groups fund their operations. FDD — run by Mark Dubowitz —is a nonpartisan, policy institute based on Washington, D.C. Read more about it here, or check out their channel to hear interviews, see news clips, and view other resources run by FDD on YouTube.
The Islamic State of Iraq and the Levant (ISIL), also known as the Islamic State of Iraq and Syria (ISIS), is one of the highest funded terrorist organizations in the world. Unlike most terrorist organizations ISIL isn’t reliant on outside income. Instead, they derive the majority of their finances from land-holdings and exploiting resources such as petroleum, taxes levied against the local population, extortion, illegal drug production, and money stolen directly from banks. It’s estimated that in 2016 ISIL had revenue north of $500 million. The year before that, they likely earned between $1 and $2 billion. The majority of the organization’s expenses cover the cost of supplies and salaries for fighters as well as administrative fees. However, as ISIL suffered territory losses and a reduction of revenue, there have been severe cuts to wages. Due to the uncertainty of future earnings, it is likely ISIL will become more dependent on external donors and will increase exploitative practices such as kidnapping for ransom to finance its operations.
In recent years, U.S. officials have stated that Hezbollah was “in its worst financial shape in decades.” The organization primarily spends its revenue on its fighting forces in Lebanon and Syria, and on the provision of social services in southern Lebanon. These expenses, as well as U.S. sanctions and the ongoing Syrian civil war, have strained its funding. Despite the negative toll on their balance sheets, Hezbollah is likely to stay afloat thanks to external support from Iran, which contributes roughly a billion dollars a year. However, that isn’t their only source of income. Hezbollah has a vast network of illegal businesses around the world and in many ways acts more like a cartel than a terrorist organization. Several countries in South America give the group’s smuggling and trafficking networks safe harbor. Hezbollah has laundered money and run front companies on six continents.
Al-Qaeda’s Branch in Syria – HTS
Al-Qaeda’s branch in Syria, which now calls itself Hayat Tahrir al-Sham (HTS), generates tens of millions of dollars per year. The group’s financial strength depends on maintaining its image as a more civilian-friendly, alternative to ISIL. To meet this goal, HTS pays for sharia courts, provides healthcare, free electricity, water, and subsidized food, and has several charitable operations, in addition to paying for soldiers’ salaries and military equipment. The group primarily funds itself through ransom, foreign donations, and the exploitation of resources from the land it controls. In recent years kidnapping has become more crucial after it lost oil fields to ISIL.
ISWA – Boko Haram
The Islamic State in West Africa (ISWA), also known as Boko Haram, is not as well financed as many of its counterparts, but is buoyed by its mobility and low-cost operations while acting for the most part in a poorly governed territory. The Nigerian military has increased pressure in recent years, but it’s unlikely their effort will stop ISWA. By exploiting vulnerable populations for resources, the group managed to generate a revenue of at least $10 million a year until 2015. They have historically taken advantage of the unpoliced borders to execute raids against villages in order to steal food and livestock, but recently the Nigerian government has stated that their funding has declined, and that they have been struggling to pay their fighters’ salaries. One strength the organization has, making it resistant to restrictions on the banking sector, is their use of the hawala system to move money and accept donations from foreign sources without being tracked.