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119-s-3942119th Congress

SPONSOR Act

Sponsored By: Senator Cruz, Ted [R-TX]

Introduced

Summary

This bill would make tax-exempt 501(c)(3) fiscal sponsors legally accountable for certain violent or terrorist activities funded through their sponsorships. It ties that accountability to situations where donor deductions are allowed or represented, while allowing defenses for reasonable oversight and due diligence.

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  • 501(c)(3) fiscal sponsors: Could face criminal and civil liability if funds they receive and control are used in defined "covered activities." A presumption of sponsor responsibility exists, but sponsors can defend themselves by showing due diligence and reasonable oversight.
  • Donors: Donations claimed as tax-deductible under a fiscal sponsorship are specifically linked to the sponsor's potential liability when those funds are used in covered activities.
  • Sponsored projects and non-exempt groups: Projects that rely on a fiscal sponsor can cause the sponsoring charity to bear legal exposure if the project engages in the listed harmful activities.
  • Covered activities: Includes aiding or abetting acts of international terrorism tied to a designated foreign terrorist organization, violent or coercive acts meant to intimidate or interfere with someone exercising constitutional rights, and using force or blocking movement of goods to stop lawful commerce. "Intimidate" is defined as placing someone in reasonable fear of bodily harm.

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Bill Overview

Analyzed Economic Effects

1 provisions identified: 0 benefits, 1 costs, 0 mixed.

New liability for charity fiscal sponsors

This bill would make 501(c)(3) charities that act as fiscal sponsors face criminal and civil liability for certain sponsored activities. It would apply when a charity receives and controls funds for a non-exempt project and allows or represents that donors can take a section 170 deduction. "Covered activities" would include knowingly aiding or conspiring with a foreign terrorist organization in international terrorism; using force, threats, or physical obstruction to injure, intimidate, or interfere with someone exercising constitutional rights; and using force or blockages to stop lawful interstate or intrastate commerce. The bill would presume sponsors are responsible for how sponsored funds are used, but charities could assert defenses by showing due diligence and reasonable oversight.

Sponsors & CoSponsors

Sponsor

Cruz, Ted [R-TX]

TX • R

Cosponsors

  • Sen. Budd, Ted [R-NC]

    NC • R

    Sponsored 2/26/2026

Roll Call Votes

No roll call votes available for this bill.

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