Overview

A proposed House measure is stirring debate over its potential to impact nonprofit organizations. The bill, which aims to streamline the process of revoking tax-exempt status for groups deemed by the Trump administration to support terrorism, has ignited concerns among nonprofit leaders. Thay argue it represents an effort to stifle organizations that oppose the administration’s agenda.

Trump’s Actions and Reactions

President Donald Trump has been accused of using his office to target perceived political adversaries.Examples include directing the Justice Department to probe of ActBlue, the primary fundraising platform for Democratic candidates and liberal causes. This action is viewed by some as part of a broader pattern.

The “One Big Beautiful Bill Act”

The controversial language was incorporated into the “One Big Beautiful Bill Act” by the House’s tax-writing committee. If enacted, it woudl grant the Treasury secretary the authority to suspend the tax-exempt status of organizations the administration labels as terrorist supporting.

Nonprofit Opposition

Over 200 organizations, including the American Library Association and the Sierra Club, have signed onto a public statement urging the House to remove the provision. These groups fear the measure could be used to target political opponents.

We have seen this administration use every lever of power they have been able to grab to target the people they see as their enemies. This is a broad-based weaponization of government, and this is only the latest manifestation of that.

Cole Leiter,executive director of Americans Against Government Censorship

Potential future Actions

Nonprofit groups are bracing for potential further actions. A looming White House deadline requires government agencies to identify publicly traded corporations, foundations, nonprofits, universities, and state and local bar and medical associations for possible civil investigations.

White House Defense

A White House official defended President Trump’s actions, asserting that he is operating within his legal rights.

President trump will always stand for law and order, ending the weaponization of the legal system, and rooting out fraud in the federal government. Every action he has taken in his second term reflects these priorities and is authorized by the Constitution. Outside groups that ignored the previous administration’s egregious legal abuses against President Trump have no credibility today.

Harrison Fields, White House spokesperson

Due-Process Concerns

The tax provision, added to a nearly 400-page legislative proposal, mirrors language in a bill written by New York Republican Rep. Claudia Tenney.This bill previously passed the House but failed in the Senate.

The measure would empower the Treasury secretary to suspend the tax-exempt status of charities that provide material support or resources to organizations designated as terrorist entities.

Critics argue the provision lacks adequate safeguards to protect organizations’ due-process rights.

It already is illegal to provide material support to a terrorist association. The new provision…gives the Treasury secretary exclusive discretion to designate a group as terrorist-supporting and would allow the agency to suspend a nonprofit’s tax-exempt status before you’ve had a chance to go before a neutral decision maker like a judge.

Kia Hamadanchy,senior policy counsel with the ACLU

Lisa Gilbert,co-president of Public Citizen,expressed concerns that organizations with international networks could inadvertently be affected.

Think about foreign humanitarian aid, for example, or groups that receive funds from foundations that are not solely based in the United States. There is a lot of activity that could be swept up.

Lisa Gilbert, co-president of Public Citizen

Legislative Hurdles

The bill faces challenges in the house. A group of GOP hardliners recently blocked its passage in a key committee, demanding steeper cuts and changes to its Medicaid provisions.

If the bill passes the House, opponents plan to fight it in the Senate.

Republican leaders are using budget reconciliation to pass the legislation, requiring only a simple majority. However, the Senate parliamentarian must determine whether the provisions have a direct impact on the budget. an early analysis suggests the provision has a negligible effect on revenue, potentially leading to its removal in the Senate.

Calls for Investigations

Federal law bars the president from ordering tax investigations of specific people or organizations. Though, trump has publicly threatened to revoke the tax-exempt status of Harvard University.

Trump has also singled out Citizens for Obligation and Ethics in Washington (CREW), a nonprofit watchdog group, as a potential target.

Executive Order and Potential Targets

Nonprofit leaders are closely monitoring potential administration moves stemming from an executive order that Trump signed January 21,aimed at ending what the administration considers illegal discrimination.

The order directs agencies to identify potential targets for civil compliance probes, focusing on diversity, equity, inclusion, and accessibility policies. Potential targets include large nonprofits and associations, foundations with assets of at least $500 million, and colleges and universities with endowments exceeding $1 billion.

Attorney General Pam Bondi has already directed the department’s Civil Rights Division to review university admissions policies. A Justice Department task force is also investigating universities for antisemitism.

Trump’s Jan. 21 order calls for the attorney general to issue a report recommending actions within 120 days. The deadline is approaching, but it remains unclear whether lists of potential targets have been assembled or will be released publicly.

Nonprofit leaders are consulting with their lawyers and preparing for potential audits.

People are trying to brace for it.It’s very unclear what it will meen to be on a list in Trump’s America.

Lisa Gilbert of Public Citizen