Losing Your Nonprofit Status

May 23, 2025 .

Losing Your Nonprofit Status

What if your nonprofit could lose its tax-exempt status—without warning, explanation, or due process?

That was nearly the reality with Section 112209 of the recent tax bill. It would’ve given the Executive Branch unprecedented authority to revoke nonprofit status based on vague accusations of “supporting terrorism.” No evidence required, no hearings, no recourse.

Imagine what that could mean for organizations delivering humanitarian aid in conflict zones—or those simply viewed as politically inconvenient.

This wasn’t just theoretical. It was real. And thanks to fast, coordinated advocacy across the sector, the provision was removed from the final bill.

But we can’t let our guard down. Here’s how nonprofit leaders can stay ready:

  • Stay Informed – Track legislation that could impact nonprofit rights. Transparency and due process matter
  • Join Advocacy Coalitions – There’s strength in numbers. Partner with networks like the National Council of Nonprofits
  • Educate Your Board & Donors – Let them know how easily legitimacy and trust can be undermined
  • Prepare Your Voice – Be ready to speak up swiftly and publicly if similar language resurfaces.

This is bigger than politics—it’s about protecting the essential role nonprofits play in society.

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