The name does not really do a good job explaining what is illegal. Any aid at all to a terror group, even something that is not designed nor intended to help with the terrorist activities, is also not allowed. As the article mentions, even if the support is designed to move the group towards legal and peaceful activities, it would still be illegal. It is perhaps, ultimate legal isolation to the terrorists groups.
"The Supreme Court upheld the government's authority Monday to ban aid to designated terrorist groups, even when that support is intended to steer the groups toward peaceful and legal activities.
The court left intact a federal law that the Obama administration considers an important tool against terrorism. But human rights organizations say the law's ban on providing training and advice to nearly four dozen organizations on a State Department list squanders a chance to persuade people to renounce extremism.
The justices voted 6-3 to reject a free-speech challenge from humanitarian aid groups to the law that bars "material support" — everything from money to technical know-how to legal advice — to foreign terrorist organizations."