Congress is taking up new legislation that would expose and penalize American nonprofit “passthrough” groups that facilitate anonymous charitable contributions from Americans to a host of radical left-wing agitators and the terror-tied advocacy groups behind violent pro-Hamas demonstrations across the country, according to a copy of the bill obtained exclusively by the Washington Free Beacon.

The Fiscal Sponsorship Transparency Act, spearheaded by Sen. Tom Cotton (R., Ark.) with a companion version in the House, centers on a tax scheme known as “fiscal sponsors,” in which properly registered nonprofit organizations funnel cash from individual donors and left-wing foundations to smaller groups that are not formally registered with the IRS. This process is effectively the legal laundering of tax-exempt donations to extremist groups and has enabled scores of these groups to operate without ever facing the IRS directly, filing a public tax return, or disclosing the donors behind their operations. In turn, the passthrough groups, or “fiscal sponsor,” typically take a cut of the cash—around 5 to 10 percent—before sending the rest to their partner group.

Donors to these passthrough charities usually know exactly where their gifts are going, as they have the ability to earmark their donations, but they are able to give anonymously to unsavory grantees.

The arrangement has allowed passthrough nonprofits like the notoriously anti-Israel Alliance for Global Justice and WESPAC Foundation to redirect tax-exempt donor gifts to terror-tied groups that include the U.S.-sanctioned Samidoun, the Palestinian Youth Movement, and the pro-Hamas campus group National Students for Justice in Palestine. The legislation would also impact left-wing, dark-money, passthrough juggernauts like the Soros-backed Tides Center, Thousand Currents, and a network of nonprofits operating under the Democratic consulting firm Arabella Advisors, which funds partner organizations like Black Lives Matter Global Network. The Tides Center, the fiscal sponsorship arm of the Tides Center, has hidden upwards of 1,400 projects behind one single tax return, according to research from Cotton’s office.

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