Independent Sector is deeply troubled by the U.S. House of Representatives’ passage today of H.R. 9495, a bill that would give the U.S. Secretary of the Treasury broad power to strip nonprofits’ tax-exempt status with little transparency or accountability if they are designated as supporting terrorism.
We strongly support stopping bad actors from using nonprofit organizations to fund terrorism. And we support the provision in the bill postponing tax deadlines for those unlawfully or wrongfully detained or held hostage abroad. However, the current language of this bill introduces redundancies, creates confusion, and grants expansive new executive powers that risk abuse and undermine constitutional due process protections.
H.R. 9495 grants sweeping authority to the U.S. Secretary of the Treasury to designate nonprofits as “terrorist supporting organizations,” without providing accused organizations full evidence or reasoning. This lack of accountability could subject nonprofits to unjust targeting, cause severe reputational and operational harm, and lead to an erosion of public trust in the nonprofit sector. Most critically, this measure could stifle the essential work nonprofits perform and harm the communities they serve.
If current rules and regulations need improvement to protect our sector from exploitation for illegal activities, Independent Sector is committed to collaborating with lawmakers on appropriate solutions. But we will fight any effort — however well-intentioned — that could allow for the unjust targeting of individual nonprofits. Surely, we can work together to craft solutions that balance genuine security needs with the fundamental rights and freedoms that uphold American democracy and sustain our tradition of a pluralistic civil society.
