Below is a proposal for an actionable Executive Order that incorporates a system to address drawdowns from current and future federal programs, ensuring that funds allocated to charitable organizations, NGOs, 501(c)(3) entities, and fundraising platforms are protected from fraud, with enhanced accountability and oversight.
COMBATING CHARITY FRAUD, PROTECTING FEDERAL PROGRAM FUNDS, AND RESTORING TRUST IN NONPROFIT ORGANIZATIONS
Section 1. Purpose.
The American people are incredibly generous, donating billions to charities (often times through our taxes to things we are unaware of), while the federal government entrusts billions more to nonprofits through grants and programs to help veterans, kids, and disaster victims. But fraudsters—crooks and con artists—are stealing from donors and taxpayers, hiding behind fake charities, NGOs, 501(c)(3)s, and shady fundraising platforms. DOGE has uncovered a very big problem that needs immediate solutions put in place.
Section 2. Definitions.
For the purposes of this order:
(a) “Charitable organization” refers to any entity recognized as tax-exempt under section 501(c)(3) of the Internal Revenue Code, NGOs, or other entities soliciting donations or receiving federal funds for charitable purposes.
(b) “Fundraising platform” includes online crowdfunding services or other mechanisms soliciting public or federal contributions.
(c) “Federal program funds” includes grants, cooperative agreements, or other disbursements from current or future federal programs administered by any department or agency.
(d) “Fraud” includes misappropriation of funds, misrepresentation of purpose, or failure to deliver donations or federal funds to intended beneficiaries.
Section 3. Establishment of Charity Fraud and Federal Funds Task Force.
(a) Within 30 days of this order, the Secretary of the Treasury, in coordination with the Attorney General and the Director of the Office of Management and Budget (OMB), shall establish a Charity Fraud and Federal Funds Task Force (Task Force) within the Internal Revenue Service (IRS).
(b) The Task Force shall include auditors, investigators, forensic accountants, and representatives from major grant-making agencies (e.g., Departments of Health and Human Services, Housing and Urban Development, and Veterans Affairs).
(c) The Task Force shall:
(i) Identify and investigate fraud in charitable organizations and fundraising platforms, including misuse of federal program funds;
(ii) Monitor drawdowns from current and future federal programs to ensure compliance with grant terms; and
(iii) Prioritize high-risk entities, including those with:
- Excessive administrative expenses (exceeding 20% of funds);
- Incomplete or inaccurate IRS or federal grant filings;
- Connections to political or foreign entities; or
- Complaints from donors, whistleblowers, or federal agencies.
(d) The Task Force shall report directly to the Secretary of the Treasury, with biweekly updates to the President on investigations, recoveries, and enforcement actions.
Section 4. Immediate Enforcement Actions.
(a) Asset Freezes and Seizures. The Department of Justice (DOJ), in coordination with the Task Force, shall seek immediate freezes of bank accounts and seizure of assets of any charitable organization or fundraising platform found to have engaged in fraud, including misuse of federal program funds. Seized funds shall be redirected to legitimate charitable causes or returned to the originating federal program, as determined by the Task Force.
(b) Criminal Prosecutions. The DOJ shall prioritize criminal prosecutions of individuals and entities engaged in charity or federal funds fraud, ensuring penalties reflect the severity of the offense under applicable statutes (e.g., 18 U.S.C. § 641 for theft of public money).
(c) Public Transparency. The Secretary of the Treasury shall establish a publicly accessible website within 60 days, updated weekly, listing entities under investigation or confirmed to have engaged in fraud (“Scammer Watch”). The website shall include:
(i) A donor verification tool to confirm the legitimacy of charitable organizations; and
(ii) A federal funds tracker detailing drawdowns and usage by recipient organizations.
Section 5. Accountability and Oversight Reforms for Federal Program Funds.
(a) Federal Funds Drawdown System.
(i) Within 90 days, the Director of OMB, in consultation with the Secretary of the Treasury and major grant-making agencies, shall implement a Federal Funds Accountability System (FFAS) to oversee drawdowns from current and future federal programs.
(ii) The FFAS shall require:
- Pre-approval of drawdowns by the Task Force for organizations receiving over $1 million annually, based on financial audits and compliance with grant terms;
- Real-time reporting of fund usage through a secure, blockchain-based platform, accessible to federal agencies and the public;
- Suspension of drawdowns for non-compliant organizations, pending Task Force review.
(iii) All charitable organizations receiving federal funds must register with the FFAS by June 30, 2026, or forfeit eligibility for future disbursements.
(b) Simplified Nonprofit Reporting. Within 90 days, the IRS shall implement a mandatory one-page annual financial report for all 501(c)(3) entities and NGOs, including those receiving federal funds, requiring:
(i) Total donations and federal funds received;
(ii) Percentage allocated to programs (minimum 80%), administration, and fundraising;
(iii) Names of principal officers and their compensation; and
(iv) Certification of accuracy under penalty of perjury.
Failure to comply or submission of false information shall result in revocation of tax-exempt status, suspension of federal funds, and referral to the DOJ.
(c) Real-Time Donation and Federal Funds Tracking. The Secretary of the Treasury, in consultation with the Department of Commerce, shall develop a pilot program within 120 days for a blockchain-based platform to track donations and federal funds in real time. Charitable organizations and fundraising platforms shall adopt this platform by December 31, 2026, enabling donors and federal agencies to verify fund usage.
(d) Whistleblower Incentives. The IRS shall expand its Whistleblower Program to reward individuals providing credible evidence of charity or federal funds fraud with 10% of recovered funds, up to $1,000,000, subject to existing legal protections.
Section 6. Donor and Taxpayer Relief.
(a) The Secretary of the Treasury shall redirect all recovered fraudulent funds—whether from donations or federal programs—to verified charitable organizations serving veterans, children, disaster victims, or other critical needs, or to the originating federal program, as determined by the Task Force.
(b) For the 2025 tax year, the IRS shall provide a one-time tax credit of up to $500 for individual taxpayers who donate to Task Force-verified charitable organizations, subject to Congressional appropriations.
(c) The Task Force shall publish an annual report detailing funds recovered, entities prosecuted, federal program funds safeguarded, and distributions to legitimate causes, ensuring full transparency.
Section 7. Implementation and Authority.
(a) The Secretary of the Treasury, the Attorney General, and the Director of OMB are authorized to issue regulations and take all necessary actions to implement this order, leveraging existing authorities under the Internal Revenue Code (26 U.S.C. § 501(c)(3)), the Federal Grant and Cooperative Agreement Act (31 U.S.C. §§ 6301-6308), the Bank Secrecy Act, and other relevant statutes.
(b) This order is issued pursuant to the President’s emergency economic powers and does not require Congressional approval to take effect, though Congress is encouraged to support these efforts with supplemental funding.
(c) All actions under this order shall commence immediately, with measurable results reported to the President within 60 days.
Section 8. General Provisions.
(a) Nothing in this order shall impair or affect the authority granted by law to any other department, agency, or head thereof.
(b) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities.
(c) All actions under this order shall comply with applicable federal laws and regulations.