Sen. Ted Cruz wants tax-exempt sponsors on the hook for the groups they bankroll, and a federal grand jury is already digging into one network accused of funding far-left unrest.
Ted Cruz doesn't wait for permission to name names. This week the Texas Republican renewed his push for the SPONSOR Act, legislation that would make 501(c)(3) nonprofits criminally and civilly liable when the groups they fund or fiscally sponsor break the law. The timing is not an accident. A grand jury in Manhattan is already looking into Neville Roy Singham, the Shanghai-based tech mogul who has poured roughly $278 million since 2017 into a network of Marxist and far-left nonprofits, according to a Fox News Digital investigation.
Cruz introduced the bill, formally the Stop Proxy Organizations Nurturing Subversive Operations and Riots Act, back in March with Sen. Ted Budd of North Carolina as co-sponsor. Rep. Nathaniel Moran of Texas carries the House version. The pitch is simple: if a tax-exempt charity is going to hand money to a project through a fiscal sponsorship arrangement, that charity should not get to plead ignorance when the project funds riots, fraud or worse.
Fiscal sponsorship lets a small or unincorporated group operate under a bigger nonprofit's tax-exempt umbrella without filing its own paperwork with the IRS. It is a common and often legitimate tool. Cruz's bill targets what he and Budd describe as its abuse: sponsors that collect donations, pass them to activist projects and never have to answer for how the money gets used. Under the SPONSOR Act, a sponsoring 501(c)(3) would be presumed responsible for ensuring its funds comply with the law, a standard that does not require proof the sponsor knew about or authorized any specific wrongdoing. The Charity Lawyer Blog, which tracks nonprofit law, has flagged that presumption as sweeping, warning it could expose sponsors even absent direct knowledge of downstream conduct. That is a fair criticism to weigh, and it is also exactly the point for Cruz and Budd, who argue the current setup lets sponsors look the other way by design.
Moran's office frames it more bluntly: the goal is deterring nonprofit sponsorship of what his release calls left-wing radicals, not managing paperwork risk for well-meaning charities. Whether the final bill text narrows that presumption as it moves through committee is the thing to watch. As of this week it has not advanced to a floor vote in either chamber.
The Singham probe gives the bill a real-world case
The grand jury investigation, first reported by Fox News Digital, was opened by U.S. Attorney Jay Clayton's office for the Southern District of New York after Acting Attorney General Todd Blanche authorized the inquiry. Investigators are examining whether Singham, the organizations he has funded or their leaders committed wire fraud, bank fraud, money laundering or other financial crimes, according to the report. Subpoenas have gone out as part of the probe.
Singham made his fortune in software and now lives in Shanghai. Fox News Digital's investigation, published in March, traced how he moved money through a Goldman Sachs philanthropy fund and shell corporations into a web of American nonprofits promoting socialist and Marxist causes. Jodie Evans, Singham's wife and a co-founder of the activist group CODEPINK, sits on the boards of several organizations in that network and is also a target of the investigation, the outlet reported.
None of the allegations against Singham, Evans or the affiliated nonprofits have been proven in court, and no charges have been filed as of this week. A grand jury investigation does not guarantee an indictment. But the mechanics under scrutiny, fiscal sponsors moving large sums to activist projects with little public accountability, are precisely what Cruz says his bill is built to stop.
Cruz has cast the SPONSOR Act as a response to a broader pattern, not a single case, pointing to political violence and unrest he attributes to organizations that operate under charitable cover. Nonprofit lawyers and advocacy groups will keep pressing to narrow the bill's liability standard before it reaches a markup. Whether Cruz and Budd agree to that narrowing, or hold the line on the strict presumption, will determine how far the bill gets this year. The Singham grand jury, meanwhile, moves on its own timeline in Manhattan, and any indictment there would give Cruz's push the kind of concrete example legislation like this rarely gets while still pending.
Also read: Newsom signs law stripping California's elected schools chief of power • Colorado district faces funding cutoff over girls sports Title IX fight • Grand jury indicts Louisiana AG Liz Murrill over New Orleans clerk law
