Bill would criminalize charities for protest funding they don't control
S. 3942 — SPONSOR Act · Filed by Ted Cruz (R-TX) · 1 cosponsor · Introduced Feb 26, 2026 · Referred to committee
Your members of Congress
Enter a ZIP to see where your representative and both senators stood on this bill.
Looked up on this device — your ZIP is never stored on our servers.
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.
The full analysis lists 5 implications of this text.
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