Threatening Free Speech: The Implications of H.R. 9495 on Non-Profit Advocacy

Introduction

This past November, the U.S. House of Representatives passed a bill that would empower the Treasury department to target non-profit organizations vital work of advocacy groups, religious organizations, and civil society. H.R. 9495, coined the “Nonprofit Killer” bill, poses a direct threat to the constitutional rights of any American non-profit. This policy brief will provide an overview of the current framework of H.R. 9495 and its policy implications for the Palestinian movement and organizations.

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H.R. 9495 Policy Framework

H.R. 9495 was introduced in September 2024 in the House Ways and Means committee and passed in the House of Representatives in November 2024. The bill imposes constraints on non-profit organizations under the guise of combating political bias, terrorism, or foreign influence. The true inner workings of this policy are to recklessly slap a false label of “terrorist organization” on any non-profit organization the Treasury Department is ideologically opposed to. Any tax-exempt organization that criticizes the government is in danger of having its tax-exempt status revoked.

The current climate in Congress is against Muslim organizations as they are targeting them in McCarthyism fashion. Earlier in September, Speaker Johnson tagged 15 non-profit organizations on X (formerly Twitter) threatening to put them on notice and encouraging their tax exemption status be revoked. Prior to that, Chairman Smith referred those non-profits to the IRS for investigation. This is an abuse of power aimed at intimidating and stifling organizations pro-Palestine advocacy.

This bill grants the executive branch power to investigate tax-exempt non-profit organizations for purported support of terrorist material or resources to designated terrorist groups. The bill does not offer protections against the executive branch misusing their authority to target pro-Palestine organizations criticizing the government. As we await the incoming administration, the policy implications, if this bill becomes a law, will become a bleak reality.

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Policy Implications

H.R. 9495 would create a chilling effect on non-profit organizations, prompting them to self-censor in order to avoid false accusations of supporting terrorism or providing material support to terrorist groups. This stifling of speech directly threatens free expression, suppressing dissent and curbing criticism of U.S. policies—both domestic and foreign.

Under the Internal Revenue code and Citizens United v. Federal Election Commission, a non-profit classified as 501 (c)(3), has the right to express their opinions, including criticizing the government and advocating for social or political change. The Citizens United decision allowed non-profits to advocate for political causes. For many organizations, this is a vital element of their mission. Prior to the introduction of H.R. 9495, the federal government surveilled and targeted various non-profit organizations to suppress their activities. For example, the Black Lives Matter (BLM) were threatened with “domestic terrorists” label for their racial justice advocacy. Presently, H.R. 9495 will be the ‘cherry on top’ of the federal government's master plan to censor non-profits free speech and activities, to ultimately, their demise. The government seeks to flush out any organization that opposes its ideology and rhetoric. This way, it allows them to continue orchestrating its narrative and ensure no challenge to its ideologies.  

Beyond free speech policy implications, this bill would allow unprecedented discretionary power to the Treasury department. H.R. 9495 lacks accountability measures and due process for any accused organization. If organizations engage in activity denouncing the government’s actions in a particular policy, Treasury officials can start to target certain organizations or individuals based on their own political motivations. Under the bill, it allows only 90 days for an organization to prove its innocence, inflicting financial harm and unmeasurable burden to respond in a short timeframe.

As mentioned, the Federal government is notorious for targeting certain non-profit organizations under frivolous claims. Last October, the Virginia Attorney General’s Office opened an investigation into American Muslims for Palestine (AMP), two weeks after October 7^th, baselessly alleging AMP used funds to provide support to terrorist organizations. AMP is a 501 (c)(3) organization working to mobilize the Muslim community to take action in defending Palestinian rights, domestically and abroad. They have the right to criticize the government’s role in policy matters and engage in social change. This trivial investigation is driven by political motivation, and if H.R. 9495 becomes a law, AMP and other organizations will face the scrutiny and witch hunt of the Treasury department to target pro-Palestine organizations.

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Implication on the Palestinian Movement

As H.R. 9495 gains increasing attention, the Palestinian movement faces a growing threat. For years, opposition to Palestine and Palestinian rights has fueled U.S. federal anti-terrorism laws, stigmatizing Palestinians and their supporters as terrorists. In the past few months, colleges began investigating Students for Justice in Palestine (SJP) chapters for their so-called “material support for terrorism.” Florida Governor Ron Desantis escalated this attack by ordering a ban of SJPs from its public universities, which the Council on American-Islamic Relations (CAIR) litigated. This move is a threat to the First Amendment and H.R. 9495 will only intensify legislators’ continuous efforts to dismantle SJPs and label the student activists as terrorists. These investigations, although unfounded, are part of the master plan to silence Palestinian activism and continue to delegitimize the Palestinian cause.

H.R. 9495 would further embolden federal officials to label supporters and activists of the Palestinian movement as ‘terrorist sympathizers’ and undermine their ability to advocate for Palestinian rights. Fear will slowly seep throughout the movement as the possibility of being charged with terrorist material support may dissuade supporters to protest and organize around ‘controversial political causes,’ which the federal government wants. Such a move is a blatant attack on the First Amendment and H.R. 9495 will punish activists for engaging in constitutionally protected speech.

A noteworthy number of resources and funding has been funneled into various efforts aimed to curtail the Palestinian rights movement’s effort through influential organizations such as the American Israel Public Affairs Committee (AIPAC) and the Anti-Defamation League (ADL). These organizations work ferociously to delegitimize Palestinian advocacy. And with the pending passage of H.R. 9495, these organizations will gain more traction in targeting the Palestinian movement and silencing activists. The passing of this bill will create the pretext the government and anti-Palestinian actors need to more confidently target the Palestinian movement voicing concerns about the United States involvement in Palestine.

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Implications for Organizations

If an organization is believed to be connected to supporting a federally designated terrorist organization, the Treasury department will initiate an investigation and must issue their findings within 90 days after the investigation begins. Upon the findings, a non-profit will have limited time to respond or appeal the findings. If the Treasury concludes an organization has violated the law by providing material support, then their non-profit tax-exempt status may be revoked. This means all income taxes on revenue must be paid and donors will not be able to deduct contributions to that organization. This would be a significant blow for a non-profit as donors will begin to lose faith in an organization and its credibility. The less donations a non-profit receives, the financially weaker it gets to continue its operations. Additionally, organizations found in violation of supporting terrorism could have their assets frozen, which places more restrictions on their ability to operate. Many pro-Palestine organizations are a 501 (c)(3) providing legal and advocacy services to their communities. If a non-profit financially collapses, it will no longer be able to service a community, champion human rights, or provide legal services. If their tax exemption is revoked, they will struggle to service the thousands of community members who utilize their organizations for various needs, while simultaneously going through proceedings to reinstate the tax exemption status. This results in a void for pro bono legal services and advocacy, especially for student activists targeted by their academic institutions.

H.R. 9495 poses a risk to humanitarian and civil rights efforts to organizations whose on the ground work has helped many, particularly in Gaza. The United National Relief and Works Agency for (UNRWA) is a non-profit organization assisting Palestinian refugees with essential resources. Since October 7^th, 2023, UNRWA has provided medical consultations, vaccinations, shelter, and hygiene support to thousands of individuals across Gaza. Despite these efforts, Israel’s Knesset sought to evict UNRWA from Gaza and designate them as a terrorist organization. The Federal government was not quick to refute the Knesset’s outrageous claims. The UNRWA Deputy Commissioner had to write a letter to President Biden addressing the government’s lack of effort to protect UNRWA and allow them to continue the flow of humanitarian supplies and goods into Gaza. If H.R. 9495 passed as a law, UNRWA and its Gazan demographic would have experienced greater travesties.

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Conclusion

In November 2024, the U.S. House of Representatives passed H.R. 9495, known as the “Nonprofit Killer” bill, which threatens the constitutional rights of non-profits. The bill imposes constraints on non-profit organizations under the guise of combating political bias, terrorism, or foreign influence. This bill grants the Treasury Department unchecked authority to investigate and financially burden tax-exempt organizations accused of supporting designated terrorist groups. However, the bill lacks due process protections, enabling politically motivated targeting of nonprofits, such as pro-Palestine advocacy organizations H.R. 9495 not only endangers nonprofits' survival but also undermines free speech, advocacy, and social justice movements across the U.S. and globally.

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Recommendations

Sign CAIR’s Action Alert thanking members of Congress for voting “No” on H.R. 9495 and rebuke those who voted in favor.

Non-profit organizations, especially those centered on Palestinian advocacy, should collaborate and offer training to educate the public on upcoming bills that may affect the services they use.

Donate to non-profit organizations to allow them to continue operating to provide legal services, advocacy, and educational resources on legislation and government activities.