EXCLUSIVE: Senate Bill Cracks Down on Shady Charities That Funnel Cash From Left-Wing Donors to Extremists, Including Israel-Hating Groups That Back Hamas 75%
By Adam Kredo92%
7/23/2026, 9:00:47 AM
BS Summary: This article contains 29 faulty reasoning types, including Biased Writer Voice, Politically Right Leaning Bias, and Framing Effect, with Negativity Bias as the most egregious example at 36.6% saturation with 359 hits. Analysis detected 2,403 faulty-reasoning hits from 980 analyzed words, generating a BS Score of 67.3% and a BS Rank of 75% (5,293 of 21,198 articles). This article is worse (more manipulative) than 75.00% of the article peer group.
Congress is taking up new legislation that would expose and penalize American nonprofit "passthrough" groups that facilitate anonymous charitable contributions from Americans to a host of radical left-wing agitators and the terror-tied advocacy groups behind violent pro-Hamas demonstrations across the country, according to a copy of the bill obtained exclusively by the Washington Free Beacon .
The Fiscal Sponsorship Transparency Act, spearheaded by Sen.
Tom Cotton (R., Ark.) with a companion version in the House, centers on a tax scheme known as "fiscal sponsors," in which properly registered nonprofit organizations funnel cash from individual donors and left-wing foundations to smaller groups that are not formally registered with the IRS.
This process is effectively the legal laundering of tax-exempt donations to extremist groups and has enabled scores of these groups to operate without ever facing the IRS directly, filing a public tax return, or disclosing the donors behind their operations.
In turn, the passthrough groups, or "fiscal sponsor," typically take a cut of the cash—around 5 to 10 percent—before sending the rest to their partner group.
Donors to these passthrough charities usually know exactly where their gifts are going, as they have the ability to earmark their donations, but they are able to give anonymously to unsavory grantees.
The arrangement has allowed passthrough nonprofits like the notoriously anti-Israel Alliance for Global Justice and WESPAC Foundation to redirect tax-exempt donor gifts to terror-tied groups that include the U.S.-sanctioned Samidoun, the Palestinian Youth Movement, and the pro-Hamas campus group National Students for Justice in Palestine.
The legislation would also impact left-wing, dark-money, passthrough juggernauts like the Soros-backed Tides Center, Thousand Currents, and a network of nonprofits operating under the Democratic consulting firm Arabella Advisors, which funds partner organizations like Black Lives Matter Global Network.
The Tides Center, the fiscal sponsorship arm of the Tides Center, has hidden upwards of 1,400 projects behind one single tax return, according to research from Cotton's office.
The senator's bill, the first legislative effort of its kind, is meant to crack down on the tax loopholes that have long allowed far-left nonprofits to buttress a network of anti-American and pro-terror advocacy groups across the nation.
While GOP lawmakers have pressed the IRS in recent years to revoke the tax-exempt status for several of the aforementioned organizations, this is the first time that legislation would close the "fiscal sponsors" loophole by fundamentally rewriting the rules.
The bill is certain to garner widespread Republican backing in both chambers as lawmakers attempt to make it harder for radical groups to fundraise in the American tax system.
Pro-Israel Democrats could also find the bill enticing, particularly since the provisions would include passthrough groups across the political spectrum.
The House version of the measure is being sponsored by Rep.
Lloyd Smucker (R., Pa.) and will likely be considered by the House Ways and Means Committee in the coming weeks.
If the bill is passed, the changes will take effect for tax years after 2027.
Cotton's bill addresses the issue in three ways.
First, charities will be required to list every sponsored group—and the dollar amounts sent to each—on their publicly available tax returns.
This would expose for the first time every smaller organization that is quietly cashing in from the arrangement.
The principal officers responsible for signing off on these transactions would also have to make their roles known on tax documents.
Under the current system, big-name fiscal sponsors can hide funding for hundreds of radical groups behind a single, unitemized tax filing.
After the money goes out the door, the original fiscal sponsor often relinquishes control over how the money is spent by their partners.
Secondly, every nonprofit group that serves as a "fiscal sponsor" would have to pay a 20 percent tax if the transferred funds were doled out under what is known as an "improper conduit arrangement," in which a sponsor forwards the cash while relinquishing discretion and control over how it is spent.
The tax would rise to 100 percent if the sponsoring nonprofit fails to correct improper transfers once caught.
Managers who sign off on these activities will also be required to pay a "tax equal to 5 percent of the amount" transferred to the partner organization, if they knowingly signed off on an improper transfer.
Last, "donors would no longer receive a tax deduction for gifts made under one of these improper conduit arrangements."
"Far-left terrorist organizations shouldn't be able to manipulate our tax code for their advantage," Cotton told the Free Beacon .
"My bill would close these loopholes, tax the charities that funnel the money, and strip the tax write-off from anyone who tries to bankroll such organizations."
Cotton maintains that by taxing the nonprofits running these schemes—and forcing them to disclose their activities—the arrangement will no longer be worth it, leaving the radical end-users with significantly less cash flow.
The Alliance for Global Justice, for instance, served as the "fiscal sponsor" for Samidoun, the radical anti-Israel group that was sanctioned in 2024 by the Treasury Department for providing support to the Popular Front for the Liberation of Palestine, a designated terror group.
The WESPAC Foundation, meanwhile, sponsors the campus hate group SJP, Within our Lifetime, the Palestinian Youth Movement, and the U.S.
Palestinian Community Network—the groups behind pro-Hamas college encampment and violent "globalize the intifada" protests nationwide.
Thousand Currents and the Tides Center helped sponsor the Black Lives Matter Global Network as the network raised $90 million for radical activities.
The Arabella Advisors network—which includes groups like the New Venture Fund—is responsible for seeding funds to scores of far-left advocacy groups and political causes.
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