What We're Tracking in DC
AAER and Fearless Foundation Announce Settlement
Earlier this week, American Alliance for Equal Rights (AAER) and Fearless Foundation announced a settlement. At issue was the Fearless Strivers grant program, which awarded $20,000 grants to Black woman-owned businesses through the Fearless Foundation, a 501(c)(3) established by Fearless Fund, a venture capital firm that aims for the advancement of Black woman entrepreneurs. As part of the agreement to settle the case, Fearless announced it will permanently close the grant program. Read more about the settlement and the Council’s joint press release with Independent Sector.
The Council partnered with Independent Sector to file an amicus brief in support of Fearless last December. In addition, over 200 foundations and nonprofits signed onto our statement supporting the rights of philanthropic organizations, charitable nonprofits, and individual donors to give in ways that align with their values.
Ways and Means Committee Markup
On September 11, the House Ways and Means Committee held a markup of several bills, two of which would impact philanthropy and the nonprofit sector:
- Stop Terror-Financing and Tax Penalties on American Hostages Act (H.R. 9495): While the purpose of this bill is to prevent the Internal Revenue Service (IRS) from penalizing Americans held hostage or wrongfully detained abroad, it also includes provisions from H.R.6408 that would give the Treasury Secretary broad authority to terminate the tax-exempt status of organizations found to provide material support to designated terrorist groups. It is already illegal to provide material support to designated terrorist organizations, and existing procedures exist to ensure any organization doing so is held accountable. The Committee approved H.R.9495.
- USA Workforce Investment Act (H.R. 9461): This bill would provide individual taxpayers with a nonrefundable tax credit for donations or charitable contributions to workforce development and training organizations. The tax credit is limited to contributions to 501(c)(3) organizations that are also on a list of eligible providers that offer such programs under the Workforce Innovation and Opportunity Act (WIOA). Contributions to private foundations do not qualify. The Committee approved H.R.9461 along party lines.
Elsewhere on the Hill:
- With government funding set to run out at the end of the month, Congress must once again pass a continuing resolution. House Republicans are not aligned on the content of the resolution, with some hoping it will include a measure to prohibit noncitizens from voting. Such a measure would be unlikely to pass the Democrat-controlled Senate. Federal funding runs out on October 1. Read more about the debate.
- The Senate Finance Committee held a hearing on the 2025 Tax Policy Debate and Tax Avoidance Strategies. Democrats spent the bulk of the hearing discussing loopholes they hope to close in a 2025 tax package, while Republicans discussed the importance of corporate tax incentives for small businesses. Charitable giving did come up once, when Sen. James Lankford (R-OK) raised the importance of passing a charitable deduction for nonitemizers.
- The Senate Foreign Relations Committee held a hearing on Anti-NGO Laws and Other Tools of Democratic Repression. Witnesses raised concerns about rising authoritarianism, particularly for civil society organizations abroad. Douglas Rutzen, CEO of the International Center for Not-for-Profit Law, urged the Committee to ensure that any legislation impacting civil society working its way through Congress “safeguard civil society and philanthropy, both internationally and at home.”
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