Congress targets nonprofit protest funding with strict criminal liability
H.R. 7799 — SPONSOR Act · Filed by Nathaniel Moran (R-TX) · Introduced Mar 4, 2026 · Referred to committee
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What it does
This bill makes 501(c)(3) tax-exempt organizations criminally and civilly liable for how money they receive as fiscal sponsors is actually used by the projects they fund — even if the organization itself did not commit the underlying act. The bill defines 'covered activity' to include terrorism support, violent obstruction of commerce, and interference with constitutional rights. Organizations can defend themselves by proving they exercised due diligence and reasonable oversight.
Why we flagged it
The bill's operative mechanism is strict liability for nonprofits based on third-party conduct, framed as terrorism prevention but functionally targeting fiscal sponsorship of protest, civil-rights, and grassroots organizing — sectors that rely heavily on 501(c)(3) fiscal sponsors to receive tax-deductible donations.
What the text implies
- The 'presumption of responsibility' (subsection 4) reverses the burden of proof: nonprofits must prove they did due diligence, not prosecutors must prove they knew of or intended the harm. This is a departure from standard criminal liability doctrine and creates a de facto strict-liability regime.
- The definition of 'covered activity' includes 'physical obstruction' of commerce and 'intimidation' — terms broad enough to encompass lawful protest, sit-ins, and civil disobedience. A nonprofit funding protest infrastructure could face criminal liability if any participant blocks a street or is perceived as intimidating.
The full analysis lists 5 implications of this text.
Who it affects
The bill imposes strict liability on nonprofits for the conduct of third parties they fund, chilling charitable giving and nonprofit fiscal sponsorship — a common mechanism for grassroots organizing, protest infrastructure, and civil-rights work. The vague definition of 'covered activity' (including 'intimidation' and 'physical obstruction' of commerce) creates exposure for organizations funding lawful protest, and the presumption of responsibility shifts the burden to nonprofits to prove innoce