WHY PROPOSED EXECUTIVE AUTHORITY OVER NONPROFIT TAX STATUS IS A THREAT TO CIVIL SOCIETY

Regina Pinney
Executive Director
Nonprofit Network

A proposed bill seeks to give the executive branch unprecedented authority to revoke a nonprofit’s tax-exempt status—without due process, full evidence, or judicial oversight. While framed as a matter of protecting the public interest, this shift would fundamentally alter how legitimacy is determined in the nonprofit sector—and undermine democratic accountability in the process.

To read more about this bill, click here.

A Departure from Community-Led Legitimacy

Historically, nonprofit legitimacy has been shaped through community support and grassroots relevance. It is a decentralized system rooted in public engagement—volunteers, donors, members, and stakeholders affirming the purpose of an organization through direct involvement. While imperfect, this model respects the agency of communities to determine what serves them.

This bill suggests a different path: that the state—not the people—should decide which organizations are legitimate. Such a move is not just bureaucratic overreach; it redefines public benefit in narrow political terms and introduces the possibility of selective enforcement.

What’s at Stake

Nonprofits are not just legal entities; they are essential infrastructure for civil society. They provide critical services, advocate for marginalized voices, and often challenge dominant narratives. Granting the executive unchecked power to strip tax-exempt status risks turning this infrastructure into a political target.

Imagine a future where advocacy for climate justice, racial equity, reproductive rights, or immigrant protection could result in administrative retaliation—absent any transparent process or evidentiary standard. This is not hypothetical; it is precisely the kind of vulnerability this legislation would introduce.

Beyond the Bill: A Larger Concern

This is not simply about tax policy. It reflects a deeper discomfort with dissent and civic complexity. When governments seek control over the definitions of public benefit, there is a risk of silencing the very voices that hold them accountable.

Moving Forward

We must challenge not just the bill itself but the logic behind it—one that equates dissent with disloyalty and treats civic engagement as conditional upon political alignment.

Democracy requires disagreement. It requires the courage of communities to organize, speak, and act—even when it is inconvenient to those in power.

This moment calls on all of us—nonprofit leaders, board members, funders, and policymakers—to reaffirm our commitment to an independent civil sector. We cannot allow fear or consolidation of power to dictate which missions are valid.

Let’s resist not just the legislation, but the erosion of democratic norms it represents.

CALL TO ACTION

Nonprofit organizations should contact their Republican Representatives and Senators to urge them to protect the nonprofit sector in tax reconciliation.  

Please urge your Republican Representatives and Senators to:

• OPPOSE granting unprecedented authority to the Executive Branch to revoke nonprofit status from organizations without due process. This provision allows Administrations to target charitable nonprofits based on ideological grounds. See National Council of Nonprofits one-pager on why Congress should protect nonprofits from Executive Branch overreach.
• OPPOSE new or expanded taxes on nonprofit organizations, including private foundations. These proposals divert scarce resources away from essential services, undermine the ability of charitable nonprofit organizations to meet needs in their communities, and put greater strain on government. See NCN’s one-pager on protecting nonprofits in tax reconciliation for more information.
• SUPPORT and EXPAND tax incentives for charitable giving. Congress should include in the tax reconciliation bill the Charitable Act, introduced by Sen. Lankford (R-OK), Sen. Coons (D-DE), Rep. Moore (R-UT), and Rep. Pappas (D-NH) to create a non-itemizer tax incentive for charitable donations to nonprofit organizations. See NCN’s one-pager on the Charitable Act and factsheet on the nonprofit sector for more information. 
• How to Contact your Congress Members
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