Who Funds That? EP 15: Congress Considers Nonprofit Regulation

The House Committee on Ways and Means has advanced four legislative proposals aimed at increasing transparency and regulatory oversight for nonprofits and political advocacy groups. One bill clarifies that religious beliefs regarding marriage and gender identity do not violate the "contrary to public policy" doctrine, preventing potential revocation of tax-exempt status based on these views. Two additional measures target foreign influence by requiring nonprofits to disclose aggregate foreign funding and imposing financial penalties on foreign-funded organizations that contribute to political entities. Finally, new reporting requirements for fiscal sponsorship aim to eliminate the lack of accountability surrounding projects that operate under a parent nonprofit’s tax-exempt status without individual financial disclosure. These reforms address concerns regarding the use of charitable tax structures for political advocacy and the current lack of visibility into the operations of fiscally sponsored projects.