Bill would criminalize charities for protest funding they don't control

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—even if the organization itself did not commit the underlying act. A fiscal sponsor is a tax-exempt charity that receives tax-deductible donations on behalf of a non-exempt project or group, then passes the money through. Under this bill, if that money ends up funding terrorism, violence, or obstruction of commerce, the sponsoring charity faces criminal charges and civil suits, regardless of whether it knew or should have known what the downstream user would do. The bill includes a 'presumption of responsibility' that shifts the burden to the charity to prove it exercised due diligence.

Why we flagged it

The bill's stated purpose is to hold fiscal sponsors accountable for terrorism and violence, but its operative mechanism—strict criminal and civil liability for any 'covered activity' including vague conduct like 'intimidation' and 'interfering with constitutional rights'—extends far beyond terrorism to criminalize ordinary protest, civil disobedience, and grassroots organizing. The presumption of responsibility and weak 'due diligence' defense make charities de facto law enforcement agents.

What the text implies

• The definition of 'covered activity' includes 'intentionally injuring, intimidating or interfering with any person lawfully exercising or seeking to exercise a constitutional right'—language broad enough to criminalize protest organizers, civil disobedience, and First Amendment activity if a fiscal sponsor's funds reach participants.
• The 'presumption of responsibility' shifts the burden to charities to prove they exercised due diligence, effectively making them liable unless they can prove a negative—a nearly impossible standard that will force charities to refuse funding for any activity with political or protest dimensions.
• Fiscal sponsorship is the primary funding mechanism for grassroots nonprofits, mutual aid networks, and protest movements that lack 501(c)(3) status. Criminalizing sponsors will collapse funding for these groups and chill legitimate civil society activity.
• The bill's title ('Stop Proxy Organizations Nurturing Subversive Operations and Riots Act') uses loaded language ('subversive,' 'riots') to frame protest and civil disobedience as criminal, while the operative text criminalizes 'interfering with constitutional rights'—a term that could apply to protest blocking traffic or sit-ins.
• Criminal liability for a charity based on third-party conduct it did not authorize or control violates basic principles of criminal law (mens rea, causation) and will likely face constitutional challenge, but the bill's passage would still chill charitable giving and nonprofit operations during litigation.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

The bill imposes strict liability on charities for the conduct of third parties they fund, creating a chilling effect on legitimate charitable giving and fiscal sponsorship—a common practice for grassroots nonprofits, mutual aid, and protest movements. Ordinary citizens who donate to causes through fiscal sponsors face the risk that their charity could be criminally prosecuted for downstream conduct it did not control, and the vague definition of 'covered activity' (including 'intimidation' and

Who stands to gain

• law enforcement agencies (expanded prosecutorial authority)
• litigation funders and plaintiff's attorneys (new civil liability exposure)
• large established nonprofits (competitive advantage over grassroots groups reliant on fiscal sponsor

Named in the bill

501(c)(3) organizations, Internal Revenue Code Section 501, Section 170 (charitable deduction), Section 219 of the Immigration and Nationality Act (foreign terrorist organization designation), ARE (mapped stock reference)

Where it stands

1 cosponsor: 1 Republicans.

• Feb 26, 2026 — Introduced · Congress.gov: “Introduced in Senate”
• Feb 26, 2026 — Referred to Senate Committee on Finance · Congress.gov: “Read twice and referred to the Committee on Finance”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

4 lobbying clients named this bill on 5 disclosure filings across 2 quarters, Mar 2026 to Jun 2026. Those filings disclosed $521,170 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 72% of bills with at least one filing.

Ted Cruz, the sponsor, reported $531,115 in PAC receipts in the 2026 cycle.

• Community Foundation Awareness Initiative (informal Coalition) — $200,000 on 1 filing
• 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
• Council on Foundations — $60,000 on 1 filing

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.