Bill Threatening Nonprofits Advances in US House—Again

Note: This article has been updated to reflect incoming information from LION and additional organizations. Updates made November 19, 2024.

The US House of Representatives’ Rules Committee on Monday passed a bill, HR 9495, that, if enacted, would give the US secretary of the treasury the power to strip nonprofits of their tax-exempt status if unilaterally deemed by the Department of the Treasury to be a “terrorist-supporting” organization—a hazy definition that would allow the Trump administration to selectively and arbitrarily target nonprofits viewed as political enemies, critics say. 

The bill now goes to a full vote on the House floor, expected Thursday. 

Last week, the bill was defeated by House Democrats—though 52 Democrats broke from their caucus to support the measure—after failing to obtain a two-thirds vote required for procedural reasons. 

“Terrorist-supporting” organization [is] a hazy definition that would allow the Trump administration to…target nonprofits viewed as political enemies.

Today, the Rules Committee, which is dominated by Republicans, passed the measure by a majority vote along party lines, with Republicans voting in favor and Democrats opposing.

Speaking in the House Rules Committee prior to the vote, US Rep. Mary Scanlon (D-PA) implored her colleagues to reject HR 9495.

“We all oppose terrorism and organizations that actually materially support terrorism should not enjoy tax-exempt status but that’s not what this bill is about,” said Scanlon. “This bill gives the president, any president, a broad authority to target and silence civil society groups the president does not agree with, and then the groups have no way to challenge this determination.” 

“Regardless of one’s party affiliation we should all be wary of giving any president an authority like the one that is proposed in this bill,” Scanlon added.  

Rep. Jim McGovern (D-MA) echoed those points. 

“[The bill] creates a high risk of politicized and discriminatory enforcement.”

“Many of us are deeply concerned that this will be misused by the incoming president, who has labeled mainstream organizations in this country as ‘terrorist’ organizations and he will be able to use this, if it ever became law, to deny organizations their tax-exempt status, to punish them, to try to silence them, without any due process, without any hearing, without any nothing,” said McGovern just before the vote. “This is a dangerous pathway this committee is paving for us to go down.” 

The bill, first introduced with bipartisan support amid widespread campus protests over the war in Gaza, has drawn sharp criticism and urgent calls for alarm from nonprofits and advocates across the sector, who say the process outlined would allow for the Department of the Treasury to unilaterally and arbitrarily designate groups as “terrorist-supporting” with little recourse for the groups targeted; and that it would effectively allow the incoming Trump administration to go after and potentially shut down nonprofits whose advocacy runs counter to the administration’s agenda, or that are even perceived as critical of the president or his administration. 

“The legislation runs counter to constitutional due process protections.”

Last week, ACLU senior policy counsel Kia Hamadanchy told NPQ that “the fear is that this is the sort of thing that a Trump administration could weaponize against civil society broadly—not just organizations that might be involved in protests regarding the conflict in Gaza, but civil society writ large.”

A recent letter by the American Civil Liberties Union, cosigned by some 150 civil society organizations, called upon House members to vote against the measure, saying it “creates a high risk of politicized and discriminatory enforcement,” and noting further that supporting terrorism is already a crime: 

The executive branch already has extensive authority to prohibit transactions with individuals and entities it deems connected to terrorism and nonprofit organizations are already prohibited from providing material support to terrorist organizations. In fact, it would be a federal crime for them to do so.

Other organizations have joined the call for opposition to the bill. In a joint statement issued Friday, the Council of Foundations, Independent Sector, the National Council of Nonprofits, and United Philanthropy Forum said: 

This legislation would allow the Secretary of the Treasury to designate section 501(c) nonprofits as “terrorist supporting organizations” at the Secretary’s discretion, without requiring the Secretary to share their full evidence or reasoning with accused nonprofits. Furthermore, the legislation runs counter to constitutional due process protections by placing the burden of proof on the accused organization and providing only 90 days for organizations to demonstrate their innocence before revoking their tax-exempt status.

While the bill’s ultimate fate remains uncertain, its passage before the full House appears likely, unless significant numbers of Republicans break with their party and Democrats who already voted in favor of the bill change their minds. 

If passed, the bill would proceed to the US Senate, where Democrats hold a narrow majority.

An Action Call to All Nonprofit Workers

Hundreds of nonprofits have mobilized in opposition to HR 9495—and are calling on their fellow organizations and all nonprofit workers to take action to oppose the measure.

While most nonprofits (and all 501c3 organizations) are, by law and mission, nonpartisan, nonprofits are permitted to advocate for and against legislation at all levels of government.

And many of these organizations are urging their colleagues and allies to mobilize, now, against the bill—including by calling on their representatives to oppose the bill in the expected House vote Thursday.
Hundreds of nonprofits…are calling on their fellow organizations and all nonprofit workers to take action to oppose the measure.
That call includes members of the rapidly growing nonprofit news media landscape.

A letter to members of LION (Local Independent Online News) Publishers that went out this week called on members to take two actions:

First, consider assigning or writing a story, or an editorial (if applicable), on the bill. With the high volume of news coverage of the presidential transition, this measure has received less sunshine and scrutiny than normal for pending legislation.

Second, if you’re able to, call your House rep. If they voted “no” on the bill the first time around, it’s good to affirm their stance and urge them to call on other lawmakers to vote no. If they voted “yes,” call on them to change their stance and highlight the concerns this poses for nonprofit newsrooms.

To make things easier, you can call your lawmaker using a hotline that some folks at Free Press Action set up: The number to use is (202) 688-0628.

Dozens of other nonprofit groups have put out similar calls to their members, supporters, and employees encouraging similar action—including urging the 52 Democrats who voted in favor of HR 9495 (linked earlier) to change their vote this week.