Smucker Introduces Foreign Grant Reporting Act

This legislation would address a loophole in current law. Currently, certain U.S.-based nonprofits must disclose information regarding grants they make to other domestic organizations, but not grants made to foreign entities. The Foreign Grant Reporting Act would require any tax-exempt organization to include in their annual filing certain information regarding any grants they provide to foreign entities.

Information required to be reported would include: the name and address of the foreign entity, the aggregate amount of such grants, and whether the foreign entity is a charity.

"American tax law should not shield bad actor non-profit organizations who seek to fund terrorism abroad and sow discord at home. This commonsense measure would provide greater transparency into the work of non-profits by requiring the disclosure of information already required of grants made to domestic organizations. We should ensure that our tax code does not provide cover to tax-exempt organizations who funnel money abroad to organizations who wish to harm our national interests," said Rep. Smucker.

"Rep. Smucker's bill, the Foreign Grant Reporting Act, closes an existing loophole in the tax code by requiring tax-exempt organizations to publicly disclose grants made to foreign entities. Americans deserve to know what activities their charitable donations are funding, either at home or abroad. Recently, it was revealed at a Congressional hearing on the COVID pandemic that gain-of-function research facilitated by EcoHealth Alliance, a 501(c)(3), was conducted after EcoHealth received federal grants but then used those funds to facilitate research at the Wuhan Institute of Virology. Better transparency standards like those contained in this bill will require disclosure by tax exempt entities when foreign grants are made in the future, just as such disclosure requirements are already required domestically. This will help prevent future bad actors from using tax-exempt organizations to mislead or deceive donors about what activities their money is truly funding," said Chairman of the Ways and Means Committee Rep. Jason Smith (MO-08).

Smucker's legislation builds on work of the Ways and Means Committee which held hearings to examine how the nation's tax laws have been used by foreign entities and nations hostile to the United States to promote antisemitism fueling hate on college campusesand how foreign nationals exploit the tax-exempt sector to influence U.S. elections and the media.

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