Tom Cotton Introduces Legislation Barring Foreign Nationals Linked to Iran, China, Russia From Nonprofit Boards

US Sen. Tom Cotton (R-AR) introduced legislation this week that would strip nonprofits of their tax-exempt status if they allow foreign nationals from countries deemed adversaries of the United States to serve on their boards.

The bill, called the Nonprofit Governance Integrity Act, targets tax-exempt organizations under sections 501(c)(3), 501(c)(4), and 501(c)(6) of the Internal Revenue Code, a broad category that includes charities, social welfare groups, and trade associations. Religious institutions such as churches would be exempt.

In a statement on Wednesday, Cotton said nonprofits “that receive tax breaks should be completely free from malign foreign influence,” and argued that nationals of China, Russia, Iran, North Korea, and Cuba should not be in positions of influence within American nonprofits.

Cotton has long been a vocal critic of loose laws allowing adversarial regimes such as those in Tehran, Beijing, and Moscow to gain influence in the US through means such as buying farmland on American soil or in this case serving on nonprofit boards, warning that adversaries seek to undermine US institutions. The legislation would define those countries as “Foreign Entities of Concern” and penalize nonprofits by revoking their tax-exempt status if their boards include nationals from those nations.

Moreover, Cotton has recently voiced concern over radical nonprofits tied to the Middle East. Earlier this month, Cotton urged the Federal Bureau of Investigation (FBI) to launch a probe into the leadership of the Palestinian Youth Movement (PYM), a far-left group which organizes anti-Israel demonstrations. Aisha Nizar, a leader of the PYM, recently encouraged supporters to take actions to sabotage the US supply chain for the F-35 fighter jet, one of America’s most advanced military assets and a critical component of Israel’s defense.

In the letter, Cotton encouraged the FBI to “immediately examine Nizar’s actions and take any necessary actions to mitigate the threat.”

Last week, Cotton also penned a letter to US Education Secretary Linda McMahon drawing attention to the growing influence of the controversial Council on American-Islamic Relations (CAIR) nonprofit organization in Philadelphia schools. CAIR, an organization that has been accused of having ties to terrorist organizations such as Hamas, recently announced that it would partner with the Philadelphia public school system.

“It is well documented that CAIR has deep ties to pro-Hamas terrorist organizations and publicly supports Hamas’s terrorist activities,” Cotton wrote in the letter. “As I noted in a previous letter, the Department of Justice listed CAIR as a member of the Muslim Brotherhood’s Palestine Committee in the largest terrorism-financing case in US history. Further, CAIR-Philadelphia’s executive director, Ahmet Selim Tekelioglu, stated that Israeli ‘occupation’ was the reason for the Oct. 7, 2023, terrorist attack by Hamas in Israel.”

While Cotton’s office pitched the latest measure as closing a loophole for foreign influence, the proposal could face resistance. Legal experts may challenge the constitutionality of banning individuals from nonprofit boards based on nationality, raising equal protection and due process concerns. Nonprofit leaders could also push back, warning that the rules would impose new compliance burdens and restrict a push for more diverse leadership.