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Congress·In Committee·H.R. 7799

Rep. Moran Introduces the SPONSOR Act to Make Nonprofits Liable for Actions of Sponsored Groups

SPONSOR Act

19 days ago·View on Congress.gov

Legislative Progress

House
Senate
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Key Points

  • The SPONSOR Act would make tax-exempt 501(c)(3) nonprofits legally responsible — both criminally and civilly — for the actions of groups they fiscally sponsor. Fiscal sponsorship is a common arrangement where a nonprofit receives and manages money on behalf of a project that doesn't have its own tax-exempt status.

    From policy text

    “the organization shall bear any criminal liability related to or arising from such fiscal sponsorship, and any civil liability concerning a covered activity related to or arising from such fiscal sponsorship.”
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  • The bill defines three specific "covered activities" that trigger liability: aiding international terrorism by a designated foreign terrorist organization, using force or threats to interfere with someone exercising a constitutional right, and physically blocking the movement of goods in interstate or intrastate commerce.

    From policy text

    “by force or a specified and credible threat of force, or by physical obstruction, intentionally injuring, intimidating or interfering with or attempting to injure, intimidate or interfere with any person lawfully exercising or seeking to exercise a constitutional right”
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  • Nonprofits acting as fiscal sponsors would be "presumed responsible" for ensuring that funds are used lawfully. However, the bill does allow organizations to raise defenses based on due diligence and reasonable oversight, meaning nonprofits that closely monitor their sponsored projects could potentially avoid liability.

    From policy text

    “The liability established by this subsection does not bar the organization described in subsection (c)(3) from defenses based on exercise of due diligence and reasonable oversight.”
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  • This bill could have a chilling effect on fiscal sponsorship arrangements. Nonprofits may become much more cautious about sponsoring newer, smaller, or politically controversial organizations — especially those involved in protests or activism — because of the heightened legal risk.
Economy FinanceCriminal JusticeCivil Rights

Impact Analysis

Personal Impact

Scores: 1 = low, 5 = highSentiment: -5 to +5 (net benefit)

Milestones

2 milestones2 actions
Mar 4, 2026House

Referred to the House Committee on Ways and Means.

Mar 4, 2026

Introduced in House

Source Information

Document Type

Congressional Bill

Official Title

SPONSOR Act

Bill NumberHR 7799
Congress119th Congress
ChamberHouse of Representatives
Latest ActionReferred to the House Committee on Ways and Means.

Sponsor

Analysis generated by AI. Always verify with official sources.