
Terrorism on Non-Profits
Just when you thought things couldn’t get worse, it does.
The very organizations that help people and protect our rights are under attack.
Under the guise of fighting terrorism, the House has passed a bill that will allow them to attack non-profit organizations.
The bill passed last month with little attention. H.R. 9495 is called “Stop Terror-Financing and Tax Penalties on American Hostages Act.” Part of it is about American hostages not having to pay taxes while they’re hostages. This is great. The rest is not so good.
The bill would give the Treasury Department nearly unfettered ability to snatch tax exempt status from nonprofits based on whatever the administration considers “support” for terrorism.
If the Senate passes a version of the bill, this power will soon be in the hands of Donald Trump.
Trump has already vowed vengeance against his political rivals and anyone who criticized him. This would allow him to go after organizations that are against him or his policies. This includes civil rights, women’s rights and all the good organizations that try to help people.
15 Democrats voted for the bill and there would have been more except there was an outcry from the NAACP, United Auto Workers, AFL-CIO, and Planned Parenthood.
Even Amnesty International said that this would harm documenting human rights abuses globally.
Jamie Raskin questioned the constitutionality of the bill because it did not sufficiently distinguish between domestic and foreign terrorists.
The first version of the bill showed up during the Palestinian Gaza student protests.
Trump has already threatened colleges and universities for their “wokeness.” He will tax or “take away their endowments, and they will pay us billions and billions of dollars for the terror that they have unleashed into our once great country.”
The American Civil Liberties Union “expressed deep concern about the bill’s potential to grant the executive exceptional power to investigate harass and dismantle non-profit organizations, including news outlets, universities and civil liberties organizations like ours by stripping them of their tax exempt status based on a unilateral accusation of wrongdoing.”
“This bill was designed to silence and financially drain organizations that oppose Israel’s genocide of Palestinians, the slaughter of Lebanese, and the broader erosion of human rights in the region. It is an attack on free speech and advocacy,” said the Council on American Islamic Relations.
A group does not have to be a 501(c)3 non-profit agency to be targeted by this new law. It can affect any group with partial or full tax exempt status.
It should concern unions with 501(c)5 status, which means that their income is not taxable but donations given to them cannot be claimed on taxes as charitable contributions. Unions that proposed an arms embargo on Israel would be immediate targets.
The Internal Revenue Service Code 501(p) already has provisions for removing tax exempt status from organizations that the government designates as terrorist organizations.
The impetus for this bill was, of course, the student protests at colleges and universities over Israeli actions in Gaza. You remember what happened in the house subcommittee hearings where college presidents were grilled and three eventually resigned due to negative publicity. All because they were made to seem anti-Semitic. The Republicans were ruthless in their questioning.
The ACLU filed more than 400 legal actions against Trump’s first administration. I’m sure he would love to get them out of the way. They have already said that they plan on fighting the new administration tooth and nail.
The lack of due process that this bill provides makes it hard to understand what providing resources to terrorist organizations means. Groups will have to be more cautious in how they operate and what activities they decide to fund.
Just look at what happened to the Russian organization Memorial. It was designed to keep alive the stories and oppression of the Stalin era. The organization won the Nobel Peace Prize in 2022. But Putin did not like them talking about government actions, even ones happening decades ago. One of the hallmarks of authoritarian rule is that there can’t be sources of information that compete with the dictator.
So Putin shut Memorial down. He first labeled Memorial a foreign agent. Then the Kremlin ordered the group to be liquidated altogether. Putin also shut down the anti-corruption movement led by Alexi Nalvany, who he imprisoned. Then Nalvany died under somewhat mysterious circumstances in prison. No one believes anything but that Putin had him killed.
“One key signal of authoritarian drift is leaders giving themselves wide powers to shut down civil society groups and media outlets.” Does this sound familiar?
A statement by Funds For NGOs.
A detailed article explaining the bill and how groups and media will be attacked, by the Nonprofit News Feed.
How can you personally help stop it?. Well you can call Chuck Schumer at his Capitol office at 202-224-3121, or submit your thoughts at this page on his website. Tell him not to let S. 4136 pass the senate. This is the Senate version of the bill.
You can call your state’s two Senators, and you can reach them at the Capitol switchboard which is 202-225-3121.
Here’s Fund the People’s Toolkit to Stop the Nonprofit Killer Bill.
Here’s the Leadership Conference on Civil and Human Rights letter to the leaders in the House and Senate.
Here’s the ACLU letter to Mike Johnson and Hakeem Jeffries and all the organizations who signed on to it.