Addressing threats to 501(c)(3) organizations

We discussed historical weaponization of org and tax status against movements: FARC and early 2000’s

Police raided orgs, homes, etc.. in Chicago accusing them of supporting FARC. They were imprisoned, stripped of status, etc.. how can we learn?

Now – under this new legislation that has passed the House and is expected to become “law” under the new US Presidential administration (HR9495) will allow the trump administration to unilaterally determine if an organization is “terrorism supporting”

We assume they will go after Palestinian Liberation groups first but that it will branch out from there. They will designate international groups as terrorist groups and accuse US groups of supporting them, thereby revoking their tax deductible 501c3 status.

How do we not freak people out, but prepare?

This is also a barrier to speech

Learn from others that have experienced this: example, in the early 2000’s – Holy Land org a Palestinian rights org got sanctioned and has not been able to operate since

Deep analysis of how much the 501c3 model is actually helping us – is it actually helping? What other configurations can we do?

House passed HR9495 today (or yesterday), but it won’t pass the Senate during this administration, but almost definitely will on the next.

The current moment in time can be tied back to the historical “green scare.” Persecution by the government back to environmentalists.

Some organizations have started speaking with lawyers. Initial lawyer response said that this legislation is targeting “international terrorism”, but practically we know it will be weaponized against US groups being accused of supporting international terrorism

What are strategies for continuing to operate organizationally

• Decentralizing
• Splitting off into different types of revenue

Coalition building – they will target this through an intersectional lens (targeting Palestinian groups, targeting Trans rights groups, etc…). But how do we build community and coalition support so that we can help the subsets of groups that get targeted?

Dealing with fascism means drawing a red line in advance. How far do you contort yourself to comply? Or, when do we abandon legal structures and pursue other means to get funded, continue organizing, support each other?

Difference between C3, C4, C6 – does this law only target C3 or are the others threatened? C4 status gives more flexibility for example of what you can do with the funding.

This law only targets the C3 categorization. The C4 donation does not give tax benefits. In both the C3 and C4, the org doesn’t have to pay taxes on the money they receive. But the C3 offers the DONOR the tax deduction.

What will Boards do? Will they continue to support organizations or will they jump ship? For smaller organizations, thinking of whether the lawyer fight is covered by D&O insurance. What is the personal consequence to Board members?

Losing the ability to give a tax receipt makes fundraising marginally more difficult. BUT, the real risk is who is going to be targeted as political prisoners? What orgs are going to be called terrorist organizations? What will happen to the people losing livelihoods, or facing legal costs or other?

This is not about just revoking status and figuring out another way to operate. This is about the optics. If you are now a terrorist organization, even if you COULD get money are people and funders going to give you money?

The law requires next to no due process. It will be unilateral decision by the trump administration.

Is there any leverage against the accusation that there’s no due process?

This law is some half-baked idea, and we don’t even know if people will be able to appeal.

They could tie us up in lawsuits for years and fine us out of existence.

Is it within our agency that we could destigmatize this label by tying it to this bogus law?

Part of the major preparation for this is coalition building. Movements will have to come together in solidarity to create structures outside of the system, outside of the state. How do we build that trust fast, what can that look like? How can we not get fined our lawyered out of existence? How can we support our humans and continue doing the work? Keeping our data safe. Decentralizing our data, does it live locally, with a trusted org, etc…

We have to look after the real lives of the people we employ. The huge industrial nonprofits are not going to be targeted. The leadership of these orgs are going to find moral superiority and comfort in removing their solidarity with targeted groups and we’ll be more and more siloed.

Funders are theoretically on the same team. They’ve chosen not to be investment bankers, they’ve chosen philanthropy. But when it comes to the “terrorism” scare, how far does their loyalty go?

Be mindful of who you are accepting money from. Don’t take Federal funding maybe, or if a funder wouldn’t advocate for you.

Movement infrastructure piece – who are the people we trust the data with. Having these conversations with all of our vendors. And our funders. Thinking through how many ways our data can be accessed and talking with these folx.

Fiscal sponsorship – it is a practice of centralization. It can provide a lot of agency but is centralizing the best way right now? What is the Dept of Treasury comes after the fiscal sponsor and all of their orgs? The legislation may target fiscal sponsors and then all of their groups may lose funding. It could go one way or another, could a group who loses their 501c3 then go to a fiscal sponsor?

Donor advised funds – possible way to move money

Different data sitting with different organizations

What if we build a shell org (but what if they keep getting shut down?)

Journalism – how is “terrorism supporting” defined in this legislation? How broad is it? What if a journalist writes a story about Palestine for example and they are accused of being pro-Palestine?

The first thing that happens in a totalitarian society is controlling the media. This is another way they can block our speech.

Fair bit of solidarity activism on the number of journalists killed in Gaza. That is clearly in the mandate of this organization but will they bastardize that and construe it?

With the Green Scare in the early 2000’s, because of business interests, etc.. instead of focusing on White Supremacy Terrorism, which was an actual problem, the FBI focused on environmental terrorism, which meant nothing.

The word Terrorism has lost its meaning. We need to resist this language. Any college student who has done pro-Palestinian work is labeled online as pro-terrorism. We need to resist this language.

The big industry orgs are against this, the ACLU is vocal against this. There are petitions.

Some orgs will be able to function, some will not.

The optics of this are bad. Can we turn it around into a badge of honor?

The power of these laws are the threat of them. The application of them is their weakness. Make them go after the Red Cross. Hospitals, Etc.. to fuck up the optics of the laws.

What are things we can do now?

• Try to find online communities, civil society orgs, etc.. to get a bigger coalition thinking about this issue

• Advocacy/lobbying

• Read the bill

• Review policies, procedures, privacy policies, contracts, etc… to protect yourself or the groups you support ahead of time

• Organize funders, find trusted funders

• Political education for regular folx who are not in this space. Families, communities, beyond our sector because the optics of this are going to be bad. What we do positively impacts everyday communities. How do we talk about this and how it will impact broader society?

• Follow the leadership of the 501c3 organizations who are in the processes – learn from them so we aren’t sharing misinformation or disinformation. Take our lead from them.

• This bill attacks organizations, not people directly. (But it will impact people indirectly)

• Talk with everyone in the org. Talk with your Board. Talk with your funders

• Review insurance language - does a terrorism accusation mean we cannot use insurance for legal costs/board protection?