H.R. 9495: A Dangerous Threat to Nonprofits and Free Speech

The House of Representatives recently blocked a dangerous provision in H.R. 9495, the Stop Terror-Financing and Tax Penalties on American Hostages Act, which would have granted the Secretary of the Treasury sweeping powers to designate U.S. nonprofits, including civil rights groups, news organizations, and universities, as "terrorist-supporting organizations". The controversial language inserted into H.R. 9495 is drawn directly from H.R. 6408, a bill introduced in the fall of 2023. The bill will be brought back for consideration this Wednesday.

This designation could strip these organizations of their tax-exempt status based on broad and vague allegations, without meaningful oversight or due process. In effect, it could lead to nonprofits being silenced or shut down by the mere accusation of supporting terrorism, even if no actual wrongdoing has occurred.

Civil rights and social justice organizations, like those fighting for racial justice, immigrant rights, and the protection of democratic values, are the most likely targets under the Trump-Vance administration.

While this bill targets nonprofits today, the implications for free speech and civil rights extend far beyond the organizations directly affected. The mere fear of designation could force nonprofits and activists to self-censor, cutting back on their advocacy or reducing their ability to speak out on important issues. This chilling effect would undermine the core purpose of nonprofits, to be independent voices for social change.

Moreover, the bill paves the way for future abuses of power. Once this authority is granted, there’s nothing stopping future administrations from expanding its use, potentially targeting organizations that don’t align with their political views or ideological agenda. The ability to label an organization as a "terrorist supporter" without due process opens up a dangerous path where any dissenting voice could be silenced or marginalized.

This legislation is not just a minor legal change, it’s a dangerous attack on civil society and democratic values. The provision of H.R. 9495 from H.R. 6408 shows a blatant disregard for free speech, due process, and the fundamental rights that allow us to live in a democracy.

The ACLU organized a coalition letter that was signed by the Shoulder to Shoulder Campaign, which Interfaith Alliance is a member of:

“The executive branch could use this authority to target its political opponents and use the fear of crippling legal fees, the stigma of the designation, and donors fleeing controversy to stifle dissent and chill speech and advocacy,”
. “And while the broadest applications of this authority may not ultimately hold up in court, the potential reputational and financial cost of fending off an investigation and litigating a wrongful designation could functionally mean the end of a targeted nonprofit before it ever has its day in court.”

We must act now to protect these vital freedoms. If we do not push back against this legislation, it is only a matter of time before the scope of these attacks grows exponentially. The very core of our democracy is at stake, and we cannot afford to be complacent.