Washington learns calling something a charity doesn’t make it charitable
WASHINGTON, D.C. — The Trump administration is considering an executive order that could suspend the tax-exempt status of certain nonprofit organizations suspected of having terrorist connections, prompting Washington’s nonprofit industry to confront an uncomfortable question.
What exactly makes an organization charitable?
According to The Wall Street Journal’s investigation into the proposed executive order, the administration is considering using federal tax law to act against certain organizations, although the proposal has not been finalized and the targeted groups have not been publicly identified.
The possibility has generated alarm among nonprofit executives who insist that the word nonprofit should be understood as a description of their intentions rather than their bank statements.
Washington Discovers the Definition of Charity
In ordinary English, charity means voluntarily helping people who need assistance.
In Washington, charity can involve establishing an organization, hiring an executive director, leasing a prestigious office, employing several communications consultants and commissioning a study to determine whether additional funding would be helpful.
Occasionally, money remains available for the original charitable purpose.
A Washington nonprofit executive explained the system.
“We don’t make profits. Every dollar is carefully reinvested in organizational development, strategic outreach, executive compensation and educating donors about the importance of giving us additional dollars.”
Asked whether the organization directly helped anybody, the executive pointed to a recently published report titled Toward a Framework for Exploring Potential Community Assistance.
The document contained 183 pages.
Its executive summary requested another grant.
Terrorism Presents an Unusual Accounting Problem
The administration’s proposal raises a more serious legal question.
Should organizations actually supporting terrorism receive preferential tax treatment?
Most taxpayers would presumably prefer that their charitable deductions not subsidize violent extremism.
But determining whether an organization has terrorist ties requires evidence, precise definitions and fair procedures.
A government cannot reasonably establish guilt simply because officials dislike an organization’s political opinions.
Otherwise, every change in presidential administration could produce an entirely new list of charities requiring urgent legal representation.
Washington has no shortage of political disagreements.
It does occasionally suffer from a shortage of restraint.
The Nonprofit Industry Discovers Accountability
The controversy has renewed attention to the distinction between genuine charitable work and organizations primarily devoted to political activism.
There is nothing inherently improper about lawful advocacy.
But the word “charitable” should describe a legitimate public benefit, not function as a magical tax exemption for any enterprise that chooses an uplifting name.
An organization called Americans for Universal Harmony might operate a food pantry.
Another organization with the same name might spend its entire budget paying consultants to explain why harmony remains impossible without additional federal money.
The difference matters.
The first feeds people.
The second feeds PowerPoint.
The proposed executive order remains under consideration, with unresolved questions about evidence, legal safeguards and implementation.
One principle, however, should be reasonably simple.
An organization deserves tax privileges because it satisfies the law, not because its website features photographs of smiling volunteers.
And an organization accused of wrongdoing deserves a fair hearing, not merely a dramatic headline.
Unfortunately, those two propositions may be the only things in Washington that neither political party can turn into an effective fundraising email.