This paper examines the contradiction of counterterrorism measures (CTMs) that hinder the work of countering terror. It is written from the perspective of independent non-governmental organizations (NGOs) that seek to advance economic development and prevent armed conflict, but whose work is hindered by overly restrictive counterterrorism policies. The paper is based on a series of workshops and consultations conducted over the course of three years on behalf of the Dutch development agency Cordaid, based in The Hague, in cooperation with the Fourth Freedom Forum, a private research foundation based in Goshen, Indiana. The paper draws from the work of dozens of civil society groups in Europe, Asia, Latin America, and Africa and is based on interviews and meetings with hundreds of representatives of civil society organizations (CSOs), donor agencies, research centers, and governments. It benefits especially from the work of CIVICUS based in South Africa and the International Center for Not-for-Profit Law and the Charity and Security Network based in Washington, D.C. The paper begins with a critical examination of the impact of CTMs on civil society development and peace building activities. It reviews the harmful impact on charities of measures intended to prevent the financing of terrorism. The paper concludes with a critique of overly repressive and militarized counterterrorism strategies and identifies alternative policies based on comprehensive approaches that are likely to be more effective in preventing violent extremism and to which civil society can contribute constructively.