Washington, D.C. – In May 2024, the U.S. House Ways and Means Committee approved two bills, H.R. 8290 and H.R. 8293, that would create new disclosure requirements for nonprofit organizations (NPOs) and threaten their work in complex and dangerous settings. These new bills targeting or threatening charitable work are part of a broader pattern of concerning legislation coming out of the Ways and Means Committee. In Dec. 2023, the committee approved H.R. 6408 – a bill that would allow the federal government to strip charities of their tax-exempt status if the Secretary of the Treasury unilaterally designates a charity as “supporting terrorism.” The bill, crafted with the intent to target pro-Palestinian groups and student groups, passed the House in Apr. 2024, and has since received widespread criticism from charities and civil rights advocates who note that the bill could easily be weaponized by any U.S. administration to silence charities and shrink civic space. 

H.R. 8290, the “Foreign Grant Reporting Act,” was introduced by Representative Lloyd Smucker (R, PA-11) on May 8. This bill would require public reporting of grants “made by certain tax-exempt organizations to foreign entities.” It intends to update the IRS Code, requiring 501(c)(3) organizations to include on their annual return the name, amount given, and type of each grant given to any foreign entity. This includes “any grant or other contribution made indirectly to any foreign entity” (Sec. 2(3)). This would not only place a heavy burden on limited NPO administrative resources but would create public disclosure of all sources of funding, including personal and identifying details.

NPOs are concerned that if passed, this bill would “create significant risks for grant recipients, particularly for organizations doing work in sensitive areas.” Public disclosure of funding and identification details could endanger staff and operations in contexts where NPOs may be targeted by political actors or groups who oppose their operations. The bill does not include safeguards for these types of situations, where the safety and security of partners, organizations, and grantees are at risk. This would also help authoritarian and hostile governments to seek out local partners and activists wherever they are operating and to target them or their loved ones with intimidation and violence. Further, it can serve to erode trust between NPOs and communities they operate in, as asking for invasive private information can have significant impacts on these partner relationships. 

Additionally, the bill requires that NPOs report not only all grants but also all indirect contributions and “other assistance.” The bill does not specify what “other assistance” entails and what it would require of NPOs, creating uncertainty and further burdens to organizations that are already stretched thin. The bill currently has wide bipartisan support in the House.

On the same day that H.R. 8290 was introduced, May 8, Representative David Schweikert (R, AZ-1) introduced H.R. 8293, the “American Donor Privacy and Foreign Funding Transparency Act.” This bill would require “annual disclosure of data on contributions received by tax-exempt organizations from foreign sources” (Sec. 2). This disclosure would include the total amount of contributions from foreign sources, the country of citizenship (or principal place of business) of any foreign source, and the aggregate amount of foreign contributions grouped by country. 

While this bill does include new privacy protections for donors by prohibiting government collection or publication of donor information, except for the IRS and where prescribed by statute (Sec. 3), if passed, this bill would also create a heavy administrative burden on NPOs, who would be required to verify the nationality of every donor. There is also a concern that requiring donors to disclose their nationality could degrade trust in NPOs, particularly on sensitive issues, and raises concerns surrounding discriminatory practices based on an individual’s country of origin.

Worryingly, these disclosure requirements could also potentially serve as the basis for investigations under the Foreign Agents Registration Act (FARA). FARA is an old, obscure U.S. law (passed in 1938 to counter German propaganda in World War II) that requires registration and disclosure by those acting “for or on behalf of” foreign governments and entities. There was renewed interest in FARA following investigations into Russian interference in the 2016 election. While it was written as a way to create transparency on the influence of foreign (and, in particular, hostile) governments, it has become another vehicle to attack and silence NPOs. FARA has also been cited as a model to justify restrictive legislation in several countries where governments target NPOs and infringe on their rights of association, assembly, and expression. Further, new amendments to FARA run the risk of lowering the bar for registration to a point that would subject grantmaking, fundraising, joint program operations, and other legitimate activities by nonprofits to potential intrusive investigations.

These new bills are part of a broader, concerning pattern of restrictions and requirements for charities that have emerged out of the U.S. House Committee on Ways and Means. It is vital to watch this legislation closely and to continue to advocate for the rights of NPOs, including against unnecessary legislation that works to silence them and their important work, at a time when closing civic space is on the rise domestically and globally. C&SN will continue to monitor and provide updates on these bills and others like them.