Bill Would Revoke Nonprofit Status for Anti-Democracy Groups

On the first anniversary of the January 6 assault on the U.S. Capitol, State Senator Scott Wiener (D-San Francisco) has introduced a bill to punish groups that support or actively pursue the undermining of democratic elections.

Senate Bill 834 would allow the state’s Franchise Tax Board to suspend or deny tax-exempt status for any nonprofit registered in or outside California that engages in such efforts. 

“They’re raising money on efforts to overthrow our democracy, and we don’t need to give them tax-exempt status,” Wiener told KQED. 

Wiener notes that California is a donor-rich environment — not just for liberal Democrats, but also for Republicans and nonprofits supporting conservative or even extreme right-wing causes. 

“There is a whole ecosystem of nonprofits that have promoted the Jan. 6th insurrection that have been profiting off of it,” Wiener said.

Under his bill, donors to such groups would not be able to write off the contribution on their state income taxes.

Wiener’s office declined to provide a comprehensive list of groups that would be affected by the law, but did mention the group Defending the Republic, an organization started by former President Trump’s attorney Sidney Powell to spread lies and misinformation about the 2020 election results. The group raised more than $14 million pledging to “overturn” the election, as reported by The Washington Post.

Wiener said that while the bill is not about targeting specific nonprofits, he hopes the legislation will disrupt funding for groups like Powell’s, whose donors then get to write off their contributions. 

Wiener’s office noted there is a federal precedent for this, citing an Internal Revenue Service code that suspends nonprofit status for groups supporting terrorism.

Coming on the anniversary of the Trump-inspired insurrection, Sen. Wiener’s bill is loaded with symbolism, but he says it’s more than that.

“My intent is not to be symbolic. I want us to have a real impact and I hope that other states follow our lead, and I hope that Congress also moves in this direction,” Wiener said.