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.
- Fiscal sponsorship is a standard mechanism for grassroots organizing, mutual aid, protest funds, and civil-rights work. This bill effectively makes nonprofits insurers of third-party conduct, likely causing many to exit fiscal sponsorship entirely, defunding grassroots movements.
- The bill applies retroactively to any fiscal sponsorship where a donor received or was told they could receive a tax deduction — creating exposure for organizations that have already completed sponsorships years ago.
- Criminal liability for a nonprofit organization (as opposed to individual officers) is unusual and creates incentive for prosecutors to target nonprofits rather than individuals, potentially chilling protected speech and association.
Section numbers refer to the bill text the analysis read — linked under Primary records below.
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
Named in the bill
501(c)(3) organizations, Internal Revenue Code, Section 170 (charitable deduction), Section 219 (foreign terrorist organization designation), Immigration and Nationality Act, fiscal sponsors, grassroots organizations, protest infrastructure
Where it stands
- Mar 4, 2026 — Introduced · Congress.gov: “Introduced in House”
- Mar 4, 2026 — Referred to House Committee on Ways and Means · Congress.gov: “Referred to the House Committee on Ways and Means”
Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.
Money around this bill
2 lobbying clients named this bill on 3 disclosure filings across 2 quarters, Mar 2026 to Jun 2026. Those filings disclosed $261,170 in lobbying spend. A filing names 7 bills on average, so that figure is what each filing reported, not a share belonging to this bill.
More lobbying clients named this bill than 41% of bills with at least one filing.
Nathaniel Moran, the sponsor, reported $856,691 in PAC receipts in the 2026 cycle.
- National Council of Nonprofits (formerly Known As the National Council of Nonpro — $181,170 on 2 filings
- National Council of Nonprofits — $80,000 on 1 filing
Lobbying Disclosure Act filings through Jul 17, 2026. A filing shows who paid to lobby on a bill it names, not what changed.
How this was measured
Analysis — Quorum's AI read the bill text published by Congress.gov (3,066 characters) on Aug 20, 2026. Section numbers in the findings refer to that text, linked below; transparency and hidden-provision scores are compared against the median of 16,222 analysed bills.
Status and sponsors — Congress.gov's bill record — actions, committee referrals and cosponsors — loaded nightly. The timeline shows status changes, not every procedural action.
Money — Senate Lobbying Disclosure Act filings whose specific-issue field names this bill for quarters ending Mar 2026 to Jun 2026. A filing's amount is reported whole beside the median number of bills a filing names; it is never divided across them. PAC receipts are FEC-reported contributions to the sponsor's candidate committee in the 2026 cycle.
As of — lobbying records through Jul 17, 2026 · page rendered 2026-10-20.
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