The war between Israel and Hamas is stirring renewed interest in U.S. nonprofits’ relationships abroad. In particular, one key congressional committee is pushing forward legislation that would strip tax-exempt status from organizations determined to be resourcing terrorist groups.

Hamas, the de-facto leadership in Gaza since 2007, has been designated as a terrorist organization by the United States since 1997. As numerous American leaders moved to show solidarity with Israel following the attack by Hamas in October, two Members of Congress were particularly concerned by reports that U.S.-based nonprofits were financially backing Hamas. Reps. David Kustoff (R-Tenn.) and Brad Schneider (D-Ill.), both members of the House Ways and Means Committee, introduced legislation in mid-November that would revoke the tax-exempt status of organizations found to be providing such material support for any such terrorist group.

“A crucial pillar in the global fight against terrorism is dismantling the financial networks of terrorist organizations, including Hamas,” said Kustoff. “Under no circumstances should organizations supporting terrorism be allowed to receive preferential treatment under the U.S. tax code.”

The top leaders of the Ways and Means Committee were keenly interested in this effort. Chairman Jason Smith (R-Mo.) had lamented in October some groups appearing to celebrate the terror of Hamas. He said such statements “call into question the academic or charitable missions they claim to pursue.” He also called a full committee hearing in November to explore “The Nexus Between Terror Financing, Tax-Exempt Charities, and Antisemitism,” where he expressed particular wariness with nonprofits aiding and encouraging Hamas, as well as university leaders allowing antisemitism to fester.

“This shouldn’t be hard,” Smith said. “Good people around the world have the moral clarity to call out evil as evil, terrorism as terrorism.”

By the end of the month, the committee advanced the legislation in a bipartisan and unanimous fashion, and it now awaits a vote by the full House.

ECFA will monitor this legislation. We also encourage churches and ministries seeking best practices on working confidently and above reproach with partners abroad to re-visit ECFA resources such as our webinar on “Key Considerations When Operating Internationally” and our e-book on “6 Essentials of International Financial Activity for Ministries.”