On September 25, 2025, the White House issued a memorandum titled “Countering Domestic Terrorism and Organized Political Violence” also known as NSPM-7. The memo directs federal agencies to work together to identify, investigate, and disrupt domestic terrorism and politically motivated violence, including by examining organizations and financial networks connected to those activities. While the document is framed as national security policy, it has direct implications for tax exempt organizations and their leaders.
The NSPM-7 memo matters now because it reflects a shift in federal enforcement priorities. Rather than focusing only on individuals who commit violent acts, federal agencies are being instructed to look more broadly at structures, funding, and organizational relationships. That change places nonprofits squarely within the field of view, whether they expect it or not.
Why This Is Especially Relevant for Nonprofits Right Now
Nonprofits operate in public. They raise funds, partner with other organizations, host events, publish materials, and sometimes engage in advocacy. These activities are lawful and essential to civil society. But they also create records, relationships, and financial trails.
The NSPM-7 memorandum directs agencies such as the Department of Justice, the Treasury Department, the IRS, and Homeland Security to coordinate their efforts. For nonprofits, this coordination matters. Information shared across agencies can turn what once felt like a routine compliance question into something more serious.
The NSPM-7 memo also instructs the IRS to ensure that tax exempt organizations are not directly or indirectly financing domestic terrorism or organized political violence. That language deserves careful attention. Direct support is obvious and rare. Indirect support is where uncertainty lives. Grants, fiscal sponsorships, shared vendors, joint campaigns, and donor restrictions can all create connections that may later be examined through a different lens.
How Ordinary Nonprofit Activity Can Attract Scrutiny
Most nonprofits have no connection to violence and never will. Still, scrutiny often begins not with intent, but with proximity.
Consider a nonprofit that funds civic engagement work and partners with a coalition to reach underserved communities. The nonprofit acts in good faith and within its mission. Years later, if another organization in that coalition becomes associated with unlawful conduct, investigators may look back at funding flows and relationships. The nonprofit may be asked to explain decisions that seemed routine at the time.
This is not hypothetical. Federal investigations often reconstruct history. They look at who worked with whom, who funded what, and what oversight existed. Nonprofits that cannot clearly explain their role, their decision making, and their controls are placed in a defensive position, even when they have done nothing wrong.
Governance Matters More Than Ever
For boards and executives, the NSPM-7 memo reinforces a lesson nonprofit lawyers have long emphasized. Good governance is not paperwork. It is protection.
Boards should understand where money comes from and how it is used. Executives should be able to describe partnerships and programs without hesitation. Organizations should know how their name, platforms, and resources are being used by staff, volunteers, and affiliates.
Documentation matters. When oversight is thoughtful and decisions are made carefully, records help demonstrate that care. When oversight is informal or inconsistent, silence can be misinterpreted.
What Nonprofit Leaders Should Do Now
There is no need to panic or to change mission driven work simply because of this memo. But nonprofit leaders should take it as a signal to review their foundations.
This is a good time to revisit grantmaking practices, partnership agreements, fiscal sponsorships, and advocacy activities. It is a good time to ensure that board minutes reflect meaningful oversight. It is also a good time to confirm that leadership understands how to explain the organization’s work in clear, lawful terms.
Nonprofits that can tell their story clearly, supported by records and governance practices, are far better positioned if questions ever arise.
A Final Thought
This memorandum does not change the law. But it does change how the federal government says it will look at organizations and financial networks connected to political violence. Nonprofits are not the target, but they are part of the landscape.
For nonprofit leaders, the message is straightforward. Careful governance, clear mission alignment, and consistent oversight are no longer just best practices. They are essential in a regulatory environment that is paying closer attention to how organizations operate and with whom they are connected.
Ellis Carter is a nonprofit lawyer with Caritas Law Group, P.C. licensed to practice in Washington and Arizona. Ellis advises nonprofit and socially responsible businesses on federal tax and fundraising regulations nationwide. Ellis also advises donors concerning major gifts. To schedule a consultation with Ellis, call 602-456-0071 or email us through our contact form.