The U.S. Department of the Treasury said on Thursday that it has taken steps to crack down on a Sri Lankan charity it accuses of supporting terrorism.

The Treasury Department said in a statement that the group, Tamils Rehabilitation Organization, funneled donations and purchased equipment on behalf of the separatist Liberation Tigers of Tamil Eelam. The organization used charitable donations made after the 2004 Asian tsunamis, as well as other donations, to bolster the military capacity of the Liberation Tigers, the Treasury Department said.

“TRO passed off its operations as charitable, when it fact it was raising money for a designated terrorist group responsible for heinous acts of terrorism,” said Adam J. Szubin, director of the Treasury’s Office of Foreign Assets Control, in a press release.

The Liberation Tigers have waged a separatist campaign against the Sri Lankan...

A top official of American Target Advertising, a Virginia company that advises nonprofit groups, has written a scathing letter to an organization that represents state charity regulators.

In the letter, Mark J. Fitzgibbons says that state registration and other requirements are overly complicated and that regulators have failed over the years at efforts to simplify the process. The letter is posted on a Web site Mr. Fitzgibbons coordinates.

“State government officials rob donors by knowingly diverting untold millions of dollars of contributions from their intended purposes under a cumbersome, outdated multi-state licensing scheme,” Mr. Fitzgibbons says in a press release accompanying his letter to the National Association of State Charity Officials.

“They violate clear constitutional precedent, the federal Privacy Act, and even the laws they are charged to enforce as a way to...