Using Nonprofit Status to Profit From Hate

October 24, 2010; Source: The Tennessean | It’s bad enough that some people are finding ways to profit from fostering hate about Muslims through lectures, books, and films. But it’s even worse that some are doing it at the expense of U.S. taxpayers because of tax-exempt donations to nonprofits that support hate mongering.

For instance, as The Tennessean reports, in 2008, the for-profit Washington-based SAE Productions was paid $3.9 million from a nonprofit to study alleged ties between American Muslims and foreign terrorism. More so, the Investigative Project on Terrorism Foundation, which the newspaper says “solicits money by telling donors they’re in imminent danger from Muslims,” was founded by Steven Emerson, who also runs SAE Productions. In response to what appears to be a violation of the so-called foundation’s tax-exempt status, a spokesman for SAE says it’s using the money it receives “for security reasons,” adding that everything was legal and the work being funded is designed to protect the company’s workers from death threats.

Ken Berger, president of Charity Navigator, a nonprofit watchdog group, couldn’t disagree more. He says, “It’s wrong. This is off the charts.” Emerson is not alone in using a nonprofit to personally benefit from stirring up anti-Islamic feelings in the country. Frank Gaffney, who heads the Washington, D.C.-based nonprofit Center for Security Policy, was paid $288,300 in 2008. Recently he testified in hearings to block the construction of a mosque in Rutherford County, Tenn. During his testimony, Gaffney, who served in the Reagan Administration as an assistant defense secretary, claimed local mosque leaders had ties to a network of Middle Eastern universities and other individuals who supported terrorism. As The Tennessean reports, he cited “his own report on Shariah law as a threat to America, one he wrote with other self-proclaimed experts.”

Based on IRS filings from 2008, others making the rounds of what the newspaper describes as the “anti-Islam circuit” and profiting from their nonprofit status include Robert Spencer, of, who earned $132,537 from the David Horowitz Freedom Center, a conservative nonprofit. In addition, Brigitte Tudor was paid $152,810 to run the anti-Islam groups ACT! For America and the American Congress for Truth. Tudor’s fellow employee, Guy Rogers, received a $154,900 salary for his work with the groups.—Bruce Trachtenberg

  • rick cohen

    Great job, Bruce. You can add to the Emerson story that Emerson’s nonprofit Investigative Project on Terrorism Foundation received $600,000 in grant from the Smith Richardson Foundation in 2003 and 2003–years before it had received its 501(c)(3) status. The Foundation’s stated policy was and is to give grants only to tax exempt charitable groups. The Foundation must have overlooked that $600,000. The other interesting aspect is that Emerson’s 2006 application to the IRS to get nonprofit status for the Project promised that no money would go to any for-profit business run by or associated with the Project’s directors or staff. The $3.9m to SAE (Emerson is the sole officer at SAE) seems to be a complete contradiction to the statement made to the IRS, that is, it was a big time fib. Emerson claims he gets no profits from SAE, but other information on the privately held SAE is not available. His contention is that because he takes no profit from SAE, the Investigative Project has not violated its commitment to the IRS. Obviously, Emerson could forego “profits” by taking a bigtime SAE salary. It’s a ludicrous argument. And then to say SAE’s role is to protect the Investigative Project’s staff from death threats? Uh, they’re co-located, they’re in the same place, if there’s a threat to people working for the Investigative Project, they’re unlikely to find themselves safe and secure by scurrying across the office to the SAE side of the floor. Glad you got this, Bruce. We need to keep an eye on nonprofits that play fast and loose with their tax exempt status.

  • Mind the Gap

    Depressing. Is there any signs that the IRS will go after them?