The Real Threat of the Nonprofit “Terrorism” Provision in Trump’s Big Bill

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This week, House Republicans quietly slipped into their new tax bill a dangerous provision that gives President Donald Trump another weapon to target nonprofits he doesn’t like. The bill would enable the administration to label civil society groups “terrorist-supporting organizations” and strip them of their tax-exempt status, making it virtually impossible for them to function.

The Trump administration has already wielded the “terrorist” label to stigmatize and strip rights from student activists and migrants. Homeland Security agents whisked an international student off the street for nothing more than writing an opinion piece in her college newspaper advocating divestment from Israel. The administration banished hundreds of Venezuelan migrants to a notorious prison in El Salvador, calling them terrorists and gang members with scant evidence and refusing to bring home a Maryland man who it conceded was mistakenly deported.

The administration has also targeted nonprofits for opposing the president’s policies. President Trump vowed to revoke Harvard’s tax-exempt status after it refused to agree to his demands. He issued executive orders directing agencies to investigate nonprofits that support diversity and inclusion and to withhold the benefit of student loan forgiveness programs for people from “activist organizations” deemed to “harm our national security and American values.”

Now, Congress is poised to fast-track a bill to give the executive branch still more authority to label—and incapacitate—its political opponents as terrorist supporters. Last year, a similar bill passed the House of Representatives but did not get to a Senate vote, where it would have needed 60 votes to overcome a filibuster. Now, the danger is that the bill will sneak through the expedited “budget reconciliation” process that requires only a majority vote to enact into law.

The tax code already suspends the tax-exempt status of terrorist organizations, and criminal law already prohibits giving “material support” (funding, training, and other resources) to terrorist groups. But this bill needlessly creates a broad new category of “terrorist-supporting organizations” that would also lose their tax-exempt status.

Groups accused of supporting terrorism would have little meaningful opportunity to challenge their designations, especially since the bill lets the government claim they can’t release information explaining a designation for reasons of national security.

Worse still, once one group is deemed a terrorist-supporting organization, the bill could be interpreted to allow the government to strip the tax-exemption of other charities that supported that group—creating a daisy-chain effect that links liability from one group to the next to the next. And unlike the existing criminal law prohibiting material support to terrorist groups, this bill doesn’t explicitly require that groups know that the money or services they provide are going to a terrorist organization.

Consider this scenario. A local charity provides job training help to immigrants who the government later claims belong to a gang it has labeled a foreign terrorist organization. (The Trump administration has labeled a number of Latin American drug cartels and gangs terrorist organizations.) On that basis alone, the administration accuses the charity of providing material support to a terrorist group and revokes its tax-exempt status. Then it proceeds to label the foundations that funded that charity terrorist-supporting organizations, too, and revokes their tax exemptions as well—all for the charitable act of helping community members find jobs.

It doesn’t take long for this guilt-by-association logic to ensnare all sorts of organizations the government thinks are interfering with its agenda. Immigrant rights groups, racial justice advocates, environmental activists, and left-leaning foundations could all be in the crosshairs today, while conservative groups could potentially be targeted under a different administration.

Sound fanciful? The bill arguably allows all this.

It’s true that targeted groups might challenge such decisions in court, including for violating their First Amendment rights to free speech and association. But even if they ultimately win—as they should—the immediate consequences will be intolerable. Banks and donors are understandably afraid to support a group the government has accused of supporting terrorism, and overnight, a nonprofit could see its finances and relationships evaporate.

Supporters of the bill have made clear they are targeting Palestinian rights activists, whom they invariably accuse of supporting terrorism merely for opposing Israel’s wholesale destruction of Gaza. Palestine activism may be the first target of efforts to suppress dissent, but it won’t be the last.

Governments around the world have learned that branding marginalized communities and their political opponents “terrorists” is a surefire way to delegitimize them and diminish their capacity to dissent—and even to exist. At a time of growing American authoritarianism, the last thing Congress should be doing is granting new powers to the president to destroy civil society groups that stand in his way.

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