Advocacy groups denounce House bill that threatens tighter control over nonprofits

A bill in the U. S. Congress that could potentially strip many of the nation’s most effective nonprofit advocacy groups of their free speech rights and fundraising abilities passed in the House and has now been sent to the Senate for a vote. 

The legislation that passed the House on November 21 has raised alarms among advocacy groups across the nation because of the bill’s punitive stance against community-centered nonprofit groups exercising their fundamental rights to speak freely and raise funds for vital causes.

HR 9495, the so-called “Terror-Financing and Tax Penalties on American Hostages Act,” will allow the White House and the Treasury Department to revoke the tax-exempt status of any group they label a “terror support group,” no matter how long the organization has been engaged in social and humanitarian causes or how paltry the evidence weighing against it.

The bill was defeated when it was first brought up for a vote on November 12 because it failed to gain the two-thirds majority it needed to pass. But on a subsequent vote on November 21, when only a simple majority in the House was enough to pass, the Republican majority was able to pass the bill with the support of 15 Democrats.

NONPROFITS TARGETED

According to the legislation, the Treasury Department could revoke the tax-exempt status of a nonprofit organization without fundamental due process by simply labeling a group as a terrorist support organization, without having to produce evidence justifying the decision.

Several organizations were named in the bill, with most of them being associated with recent demonstrations in support of Palestinian rights on major college campuses. Organizations targeted by the legislation were National Students for Justice in Palestine, American Muslims for Palestine, and Jewish Voice for Peace – as well as large progressive foundations like the Tides Foundation, Rockefeller Brothers Fund, and Open Society Foundations. 

WIDESPREAD OPPOSITION

The Washington-based Labor Council for Latin American Advancement (LCLAA), the nation’s leading advocacy group for Latino workers and union members, issued a nationwide clarion call to immigrant and labor organizations urging them to take a stand against the dangers and threats inherent in HR 9495. The group states that it “stands firmly against HR 9495 and its potential to dismantle the nonprofit sector.”

“If enacted, HR 9495 would give the executive branch unprecedented power to unilaterally revoke the tax-exempt status of nonprofit organizations based on vague accusations of ‘terrorism support,’” a LCLAA spokesperson said. 

“The implications of this legislation becoming law are alarming. First, HR 9495 would empower political retaliation by granting a presidentially appointed secretary of the treasury the unchecked authority to strip nonprofits of their tax-exempt status. This unprecedented power could easily be weaponized to silence organizations critical of government policies, intimidate advocacy groups, and stifle dissent.”

In addition, LCLAA stated, the bill could immobilize “nonprofits doing the most important work and serving communities, including those addressing issues such as workers’ rights, immigrant justice, and economic equality. At a time when nonprofits are more crucial than ever in addressing societal challenges, this bill represents a direct attack on their mission and purpose.” 

IN-STATE RESPONSE

Jaribu Hill, executive director of the Mississippi Workers’ Center for Human Rights, based in Greenville says: 

“We see it as a major threat. It’s at the national level right now, but usually when bad stuff happens at that level, Mississippi always seems to embrace the worst of the worst lack of protection legislation.

“We see it as another opportunity to target those who exercise their right of free speech to speak out against various wrongs, including what is happening in Gaza, what’s happening here on the domestic front with poverty and race discrimination, and all the things we’re fighting against – the human rights abuses in this country and the global impact. 

“There’ll be a wave of legislation like this that will serve to chill free speech and to target organizations in a punitive way where these organizations will be fighting to stay alive, and to do their work without being harassed and targeted by government at the national and the state level.” 

Hill says she is not overly worried about something that hasn’t happened yet. “I might remind you of the McCarthy era as the most graphic example of the suppression of free speech. Not only were organizations forced to disband, but people lost their lives. We can look at COINTELPRO where Black leadership like the Black Panthers and people like Fred Hampton were killed because of their political views. We can’t sleep on this. We need everybody to become a strong lobby against this bill and any other attempt to erode the freedom of speech and the freedom of association.

“We don’t intend to go back to a time when our humanity was stripped away from us. We see that our brothers and sisters coming to this country seeking refuge as immigrants can’t survive in their own countries because of the plundering and other troubles there. So, we embrace them, and we feel a strong sense of familyhood and solidarity with them.”

Those rights have to be protected, she said. 

“Contact everyone you can, even the people who are not going to vote the same way that you are,” Hill said. “They still need to hear your voice and your cause and the public outrage. And to know what is now on the chopping block. We are seeing a resurgence of what we thought had been done away with after the McCarthy era.” 

TRUMP TARGETS

HR 9495 has a close affinity with the formerly discredited Project 2025 that has gained a new vitality since Trump’s November 5 victory, says Bill Chandler, executive director of the Mississippi Immigrants Rights Alliance (MIRA). 

“Any immigrant rights organization like ourselves will be vulnerable,” Chandler says. “All of those organizations that Trump is talking about taking away their nonprofit status are dependent on foundations primarily. 

“We’ve been in that situation before. Most of the organizations that Trump is targeting are ones he doesn’t like, not just those associated with immigration, but also civil rights and other progressive groups. I don’t think he’ll be able to affect strong organizations like the NAACP, so far as their 501c3 status goes. But some of the other organizations that came into being more recently may be very vulnerable and might not be used to raising money on their own.”

Chandler says he’s not certain that President Biden will sign the bill if it passes the Senate. If so, then it will be available for Trump to use to go after organizations he doesn’t like, he said. 

The Mississippi legislature will most likely adopt a bill similar to 9495, early into the 2025 legislative session, said Chandler. There also will likely be legislation authorizing local police to go after and round up immigrants, he added.

MIRA’s Community Engagement Day at the Capitol takes place on January 22. 

“We’ll be watching for anti-immigrant legislation that would support what Trump is trying to use,” he said. “MIRA is reaching out to the whole immigrant community, not just Latinos. There are a lot of Muslims here in Mississippi. They may be vulnerable, too. People from Africa may also be targeted. People from many different lands are living in fear.” 

EXISTENTIAL THREAT

Many nonprofit organizations that might find themselves confronted by the enforcers of HR 9495 could face an existential threat from the legal expenses required to withstand an order of expulsion or shutdown by the government.

A member of the human rights organization Defending Rights & Dissent observed: “In the absence of meaningful due process, any nonprofit – from humanitarian organizations to independent newsrooms – could risk losing tax-exempt status. The bill has further implications for civil society. The mere threat of being tied up in litigation, facing the reputational harm that such a designation would bring, and loss of donors, would chill speech and stifle dissent.”