More than 55 Jewish groups come out against terrorism bill that could threaten nonprofits

A coalition of more than 55 centrist and progressive Jewish groups is lobbying against a bipartisan bill that would give the Treasury Department broad powers to revoke the tax exemption of any nonprofit it deems to be a “terrorist-supporting organization.”

The Stop Terror-Financing and Tax Penalties on American Hostages Act is slated for a vote in the House of Representatives Thursday. Last week, the bill was fast-tracked for a vote but failed to achieve the required two-thirds majority for advancement as many Democratic lawmakers argued the bill could be abused by the incoming Trump administration. 

Now, the bill will need only a simple majority before being sent to the Senate for consideration. The bill appears to have the support of nearly all Republicans and enough moderate and pro-Israel Democrats to pass the House. 

If the bill becomes law, the person charged with its use during the next administration could end up being Marc Rowan, one of Donald Trump’s top contenders for Treasury secretary. Rowan, a Wall Street billionaire and a donor to Jewish and Israel-related causes, believes that not enough has been done in response to violence against Jews, especially on college campuses. 

Such concerns have propelled the bill up to now. It was introduced by two Jewish congressmen, Republican Rep. David Kustoff of Tennessee and Democratic Rep. Brad Schneider of Illinois, a year ago, shortly after the October 7, 2023, Hamas attack that launched the Gaza war. It gained traction earlier this year amid allegations that many pro-Palestinian nonprofits, especially those involved in campus protests against Israel, have financial links to Hamas or other Middle Eastern terrorist organizations at war with Israel. 

An earlier version of the legislation passed in the House in April by a 382-11 vote before stalling in the Senate. The version that is now up for a vote is almost identical. Supporters say that existing laws barring nonprofits from supporting terrorism are too cumbersome and that the government needs a more efficient tool to dismantle terrorist-supporting financial networks. 

Under the bill, the Treasury secretary would be able to target charities - without having to present evidence of their links to terrorism - and take away their tax-exempt status. There would be a 90-day window for a targeted charity to challenge the determination in court. 

Support for the bill among Jewish groups came from the pro-Israel lobby AIPAC and the Republican Jewish Coalition.

The Anti-Defamation League supports the bill but appears to be calling on lawmakers to add protections to the legislation. “We would like to see strong due process measures in place when the bill is passed,” an ADL spokesperson said in an email. 

Over the past week, progressive Jewish groups that have lobbied against the bill - including the Religious Action Center of Reform Judaism, the liberal Israel-focused lobby J Street, and the New Israel Fund - have won over a broader swath of the Jewish community. In a letter to lawmakers Wednesday organized by the Reform group, more than 55 Jewish groups argued that the bill could be abused by the government and have a chilling effect on free speech. 

The letter’s signatories include the Zionist women’s group Hadassah; the National Council of Jewish Women; the Jewish federations representing Ann Arbor, Michigan, and Lexington, Kentucky; the major national institutions of Reform and Conservative Judaism; and the Jewish Council for Public Affairs. 

“As a Jewish community, we have experienced the harms caused by those who foment hate and terror,” says the letter, which argues that existing law provides an appropriate avenue through which to address concerns. 

“No individual, including a Treasury secretary, should be given nearly unfettered power to remove an organization’s tax-exempt status,” the letter says. “We urge you to seek solutions that make the nation safer, instead of advancing those that threaten constitutional rights.”

Their critique of the bill echoes concerns voiced by the American Civil Liberties Union and other civil rights watchdogs. Hundreds of nonprofits focused on progressive issues from the environment to reproductive justice have mobilized against the bill out of concern that the incoming Trump administration could use it to attack them. Pro-Palestinian groups have also mobilized against the bill. 

AIPAC says the concerns are unwarranted and that the bill was crafted to be used narrowly against supporters of terrorism. 

“Unfortunately, this legislation has been badly mischaracterized by its opponents as it is carefully targeted at organizations which actually support U.S. designated foreign terrorist organizations,” AIPAC spokesperson Marshall Wittmann said in a statement. 

Especially since Hamas’s attack,  and the subsequent protests that erupted across the country, many Jewish groups have been busy trying to counter groups whose activism they say crosses the line into harassment. Increasingly, pro-Israel advocates have turned to the legal system. Soon after October 7, for example, the ADL and the Brandeis Center, which offers legal services to Jewish and pro-Israel students, called on university presidents to investigate if their campus chapters of Students for Justice in Palestine were breaking federal law by providing support for Hamas.

Project Esther

A blueprint for a more expansive crackdown on the pro-Palestinian protest movement can be found in the work of Project Esther, a right-wing program for fighting antisemitism written by allies of the incoming Trump administration. Project Esther proposes a legal strategy to target what it calls the “Hamas Support Network,” which includes numerous Muslim and pro-Palestinian groups as well as the anti-Zionist Jewish Voice for Peace and major funders of progressive causes like the Tides Foundation and Rockefeller Brothers Fund.