North America: Federal strategy on domestic terrorism includes focus on nonprofit foundations, entities, and individuals

In brief

On 25 September 2025, the White House issued National Security Presidential Memorandum NSPM-7 (“NSPM-7”), a sweeping unprecedented federal initiative aimed at combating domestic terrorism and political violence. NSPM-7 directs federal agencies through the FBI’s Joint Terrorism Task Forces (JTTFs) to dismantle and eliminate networks, entities, and organizations that engage in or promote organized violence and intimidation intended “to suppress lawful political activity or obstruct the rule of law.”


Contents

Key takeaway

Nonprofit organizations and donors engaged in advocacy, education, or politically sensitive programming will face scrutiny under NSPM-7. The order targets organizations with international partnerships, foreign donors, or issue-based campaigns related to race, immigration, gender, or anti-fascism. The order specifies traditional forms of terrorism, such as support for the overthrow of the United States Government. However, it also sweeps in “extremism on migration, race, and gender; and hostility towards those who hold traditional American views on family, religion, and morality,” which might be viewed expansively to include organizations promoting progressive agendas and potentially affecting protected First Amendment activities. Investigations may focus on political advocacy and activities as well as financial flows, tax compliance, and international ties.

We advise clients to undertake a proactive review to mitigate potential exposure to federal investigation or enforcement. Indeed, clients across sectors should prepare for the possibility of investigations and enforcement actions regarding the operations and activities of nonprofit organizations and their donors, including tax, Foreign Agents Registration Act (FARA), money laundering, racketeering, and terrorism laws.

This administration’s expanded focus on financial and organizational support that might influence political violence represents an unprecedented expansion and a new era of enforcement. Organizations must act swiftly to ensure they are not inadvertently caught in its crosshairs.

In depth

National Joint Terrorism Task Forces

Central to NSPM-7 is the empowerment of the FBI's National Joint Terrorism Task Forces (JTTFs). The JTTFs are directed to lead a nationwide effort to investigate and disrupt entities and individuals involved in the promotion of political violence and terrorism.

The mandate is broad and extends to reviewing an organization’s financial infrastructure to determine whether it enables or encourages politically motivated violence. Accordingly, JTTFs may investigate an organization's institutional and individual funders, as well as officers and employees. JTTFs also will investigate non-governmental organizations and US citizens who maintain close ties to foreign governments or agents, to determine (1) whether they engage in money laundering through the funding, creation, or support of entities that promote domestic terrorism and (2) whether there are violations of FARA.

Department of Justice, Department of the Treasury, the Internal Revenue Service

Under NSPM-7, the Attorney General is expected to issue formal guidance prioritizing the investigation and prosecution of doxing, swatting, rioting, looting, trespassing, assault, property damage, and threats associated with organized political violence. The forthcoming guidance will also outline common underlying motivations, which will encourage federal agencies and law enforcement to identify and disrupt acts of political violence.

NSPM-7 places increased scrutiny on financial systems that support politically motivated violence. The Secretary of the Treasury and the Internal Revenue Service (IRS) Commissioner are directed to investigate funding streams to ensure that tax-exempt entities are not being used to finance violent political activity. Entities found to be in violation or engaged in activities inconsistent with their exempt purposes may face revocation of tax-exempt status, civil penalties, and criminal prosecution.

Nonprofit organizations are encouraged to evaluate activities that might be within the scope of NSPM-7. Specifically, political rhetoric that the Trump Administration may view supporting extremist positions on migration, race, or gender should be evaluated in terms of whether such activities “promote organized violence, violent intimidation, conspiracies against rights, and other efforts to disrupt the functioning of a democratic society.”

Additionally, the directive calls on financial institutions to enhance monitoring and reporting of suspicious transactions that might be related to political violence. This includes filing Suspicious Activity Reports (SARs) under the Bank Secrecy Act and cooperating with federal investigations into money laundering or terrorism financing. In the coming weeks, the IRS is likely to issue guidance concerning how it will interpret and enforce the memorandum’s provisions. This may include updates to Form 990 reporting requirements, new audit procedures for exempt organizations, and expanded use of data analytics.


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