House Ways and Means Committee Approves Three Bills Impacting Nonprofits

What happened:  The House Ways and Means Committee voted this week to approve three bills that the National Council of Nonprofits (NCN) opposes, on a straight party-line vote: 

• H.R. 9721, the Fiscal Sponsorship Transparency Act of 2026 (Rep. Lloyd Smucker, R-PA) 

• H.R. 9772, the Foreign Funding Transparency Act (Rep. David Schweikert, R-AZ) — a renamed and reintroduced version of H.R. 8293, the American Donor Privacy and Foreign Funding Transparency Act 

• H.R. 9771, the Stopping Foreign Influence in Elections Act of 2026 (Rep. Nicole Malliotakis, R-NY) 

What each bill would do: 

• Fiscal Sponsorship Transparency Act (H.R. 9721): Would require nonprofits to report annually on each fiscally sponsored project — funding provided and administered, a description of activities, the name of the project’s manager, and the start date. It creates a new, undefined category called an “improper conduit arrangement” for any arrangement that “fails to exercise discretion and control over the use of funds.” A nonprofit found to have one would face an initial tax of 20% of transferred funds (capped at $10,000), doubling to $20,000 if uncorrected; a manager who knowingly oversaw the transfer would face a separate tax of up to 50% of the funds involved, and donors could not deduct gifts made to an improper conduit arrangement. Private foundations and donor-advised funds are exempt. NCN’s core concern: the undefined standard leaves nonprofits exposed to liability they cannot evaluate in advance, with no clear appeals process — and fiscal sponsors, who provide a legal and financial home for parent-teacher organizations, sports leagues, and other community projects, may simply stop accepting that risk. 

• Foreign Funding Transparency Act (H.R. 9772): Would require all  501(c) organizations with gross receipts over $200,000 or assets of $500,000 or more to publicly report — in a searchable IRS database — the aggregate amount and country-by-country breakdown of contributions received from foreign nationals. It also bars most federal entities other than the IRS, the Secretary of the Senate, the Clerk of the House, the FEC, or a court from collecting or disclosing donor information, with fines up to $250,000 or up to five years in prison for violators. NCN’s concern: nonprofits already report donor names and addresses to the IRS on a confidential basis; this bill would require organizations to start asking every donor — including small online donors — about citizenship, and to publish aggregated results, risking donor trust at a time when giving is already declining. 

• Stopping Foreign Influence in Elections Act (H.R. 9771): Would bar any 501(c) organization from contributing to a “political entity” (a PAC or 501(c)(4)) for two years after receiving even a single dollar from a foreign national, with a tax equal to 100% of the contribution for a first violation, 200% for a second, and 200% plus a two-year revocation of tax-exempt status for any later violation. NCN’s concern: to comply, nonprofits would need to collect citizenship information from every donor, even small-dollar donors, and a single $1 foreign contribution could jeopardize an organization’s ability to engage in lawful 501(c)(4) advocacy. 

Why it matters: All three bills passed committee on a strict party-line vote. NCN credits nonprofit advocacy with helping keeping the vote along party lines, which makes House leadership less likely to bring the bills to the full floor given the chamber’s razor-thin Republican majority and the unlikelihood of Democratic support. Because none of the three bills carries a budgetary “score,” they are also ineligible for inclusion in a reconciliation package — closing off one path that had raised concern. 

Where things stand: All three bills have cleared committee; none is currently scheduled for a House floor vote. Pennsylvania nonprofits that use fiscal sponsorship arrangements or receive donations from outside the U.S. should continue to watch this closely. NCN will alert the sector if any of the three bills is scheduled for floor action.