Are Some Nonprofits Threatening National Security?

After years of protests in American cities, and the most recent upheaval on university campuses, congressional members in both chambers are beginning to take seriously the idea that parts of the American nonprofit sector may have been hijacked by special interests behind the scenes that are actively – and possibly illegally — contributing to the discord, and possibly even fomenting terrorism. Lawmakers have begun proposing investigations and legislation to address these concerns.

On May 14, Republicans on the House Oversight Committee sent a letter to Treasury Secretary Janet Yellen “requesting all suspicious activity reports (SARs) connected to 20 organizations that are reported to be leading, financing, and participating in the pro-Hamas, antisemitic, and anti-American protests occurring on college campuses across the U.S.”

The letter to Yellen is a nod to recent proposed legislation from both the House and Senate that give the Treasury Secretary new powers to investigate whether 501 C3 entities are violating their tax-exempt status by providing “material support” to already designated terror groups.

Unsurprisingly, this has led to consternation among some libertarians who see the new proposed legislation as an overreach along the lines of the Lois Lerner/IRS scandal during the height of the Tea Party movement.

Those concerns are valid. However, guardrails in the new proposed legislation allow nonprofits to challenge allegations and disprove them. The new legislation also uses existing laws — legally defined “material support” for already-designated terror groups — as a standard for investigation. These specifications mitigate the possibility of political targeting.

House Oversight has the advantage of a growing body of research on the 20 nonprofit groups they want to examine. Some of those groups – Students for Justice in Palestine (SJP), American Muslims for Palestine (AMP), for example – have known ties to huge, leftist funding networks.

As The Heritage Foundation reported in early May, citing Capital Research Center’s Ryan Mauro, these two groups and others behind the campus protests are known to be connected to massive funding streams, but the money trail is often difficult to track due to a phenomenon known as “fiscal sponsorship.”

From the report:

SJP receives funding from AMP, but is itself a fiscally sponsored project of the Westchester People’s Action Coalition Foundation, another far left funder…

Ryan Mauro of Capital Research Center, whose work tracking these networks is invaluable, emailed me that “WESPAC funds various revolutionary far-left/anti-Western groups.” But because it acts as SJP’s fiscal sponsor, there’s no transparency. “All donations transit through WESPAC and they aren’t required to publicly reveal anything about that relationship.”

But we can get a sense, from other disclosures, of who funds WESPAC and AMP. Mauro tells me that those who have given to WESPAC include the Elias Foundation ($100,000); the Sparkplug Foundation (about $100,000); Rockefeller Philanthropy Advisors ($80,000); George Soros’s Open Society ($40,000); and the Groundswell Foundation (about $32,000). The Zakat Foundation has meanwhile given $25,000 to AMP.

What House Oversight seems to want to determine is if these groups are connected to known terror networks as well; and, more importantly, if they’re engaged in illegally “materially” supporting terrorism (which can include training, funding, personnel, advice and assistance, etc.). The lawsuits have already begun, so Yellen will almost certainly be forced to make the House request a priority.

As Americans have been slowly losing faith in their institutions, the philanthropic sector has not been spared. However, one consequence of that waning faith is a possible positive culture shift. Conservatives are now openly eschewing fear of being called conspiracy theorists and leaning into the sneaking suspicion that what they’ve been witnessing over the last several years, most recently on college campuses, has some organizing principle behind the scenes.

House Republicans are starting the process of finding out if they’re right.

This article first appeared in Townhall on May 23, 2024