A Victory for Donor Privacy

July 2, 2021      Roger Craver

The U.S. Supreme Court yesterday sided with charities fighting a California law requiring nonprofits to provide a list of their larger donors to the state.

In a 6-3 vote the court said the California law subjected donors to potential harassment and intimidation, chilling their 1st Amendment right of freedom of association.

This decision —Americans for Prosperity v. Bonta – divided the Justices along ideological lines, but the case itself, although brought by a nonprofit funded by the Koch family was also supported by an ideologically  diverse group of nonprofits including the American Civil Liberties Union, The Electronic Frontier Foundation and the NAACP Legal Defense and Education Fund.

From The Agitator’s point of view this decision represents a major victory.  Six years ago, we sounded the alarm in our post Urgent Alert to U.S. Nonprofits  warning that then-California Attorney General Kamala Harris was engaged “in a dangerous and unconstitutional power grab in the name of ‘fundraising regulation’ and ‘consumer protection.’”

That post followed a similar warning we issued the year before (BEWARE:  Oklahoma’s Mini-Nixon) alerting readers to the attempt by Scott Pruitt, then-Oklahoma Attorney General attempt to silence animal protection advocates by exposing the donor list of the Humane Society of the U.S.

As we pointed out in Protecting Donor Privacy –and as the U.S. prepares to celebrate its Independence Day—to 18th century American revolutionaries, power was the domain of government. Rights were the domain of the governed.

Indeed, the history of how enforceable rights have been secured in America — the right of women to vote, gay rights, battling racial segregation and abuse, the right to privacy, the rights to freedom of religion, freedom of speech and freedom of political association — reveals few if any instances in which government either prevailed in suppressing those rights, and even fewer examples where government led the way to establishing individual rights.

Instead, rights have been won after long and arduous struggles by citizens organized to demand the rights guaranteed by the Bill of Rights and the U.S. Constitution, but often resisted or subverted by government.

And that’s exactly how the majority saw it in Thursday’s case.  They noted that the nonprofit parties relied on the Supreme Court’s 1958 decision blocking Alabama’s segregationist state government from obtaining lists of “ordinary rank-and-file members” from the NAACP, which was then mounting civil rights campaigns in the South.

Back in 1958 the Supreme court in the NAACP/Alabama case noted, ”Revelation of the identity of its rank-and-file members shas exposed those members to economic reprisal, loss of employment, threat of physical coercion, and other manifestations of public hostility.  Compelled disclosure of petitioner’s Alabama membership…may induce members to withdraw from the Association and dissuade others from joining it because of fear of exposure of their beliefs shown through their associations and the consequences of this exposure.”

And now in 2021… “As partisan pendulums swing back and forth in governmental offices, and as online campaigns rage against perceived ideological foes”, the nonprofit brief noted “donors to causes spanning the spectrum predictably fear that exposure of their identities will trigger harassment and retaliation far surpassing anything reason able people would choose to bear.”

Thus, the court struck down California’s law under which tax-exempt groups were to attach to their filings with the state a copy of their IRS form reporting the names and addresses of all donors who gave more than $5,000 or 2% of the organization’s total donations.

What About Political Campaign Donors?

The decision concerned only charitable donations.  But, as the New York Times notes “its logic was sweeping, Justice Sonia Sotomayor wrote in dissent, suggesting that it could erode disclosure laws concerning political campaigns, too.

“Today’s analysis marks reporting and disclosure requirements with a bull’s-eye,” she wrote. “Regulated entities who wish to avoid their obligations can do so by vaguely waving toward First Amendment ‘privacy concerns.’”

Ultimately, the disclosure of political campaign donors is up to Congress and, most probably,  the courts.  For now, we’re grateful to those organizations in this most recent case for speaking up and fighting back.

Silence and a go-along-to-get-along attitude regarding government and its regulators are the enemies of all our freedoms.

Roger

 

 

2 responses to “A Victory for Donor Privacy”

  1. Bob Hartsook says:

    Roger, Sorry, I disagree. My time and characterized substantial role in our philanthropic movement encourages more transparency, not less. Like it or not the overlap between political thought and nonprofit decision making is becoming closer and closer. Of course, I respect the civil rights lessons of the long ago, maybe some remain. I am puzzled that Feeding America should be in favor of nondisclosure of its donors instead of celebrating those people.

    My mentor and your friend Arthur Franztreb started the Million Dollar Gift List of publicly announced million dollar gifts to encourage others to seek and consider large gifts. The list given in the 90’s to the Center on Philanthropy and is being used for research purposes on giving trends. In my opinion is not accurate base because of a lack of transparency. I was stunned to hear IU’s Patrick Rooney, the mouth piece for Giving USA jokingly tells a crowd in KC, “What would happen to my marriage if my wife knew I gave to right to life groups and she to planned parenthood?” Really, is that what we are protecting?

    This decision also places an argument for maintaining the severe secrecy held by the fast growing recipient of philanthropic funding, having little direct impact on our society’s issues of the day, the Donor Advised Funds. This most certainly will put a chill on discovering who is getting tax benefit for giving to a fund that by law never has to be given to a charity.

    Koch is used frequently as the source of dark political money, when its philanthropy to education, for example, is nearing a billion dollars with hundreds of institutions supporting KOCH named business and economics programs. Little desire by the donor or the recipient in those gifts for secrecy.

    A Justice I seldom agree with is right, this decision will effectively stop efforts for disclosure of “dark” money. Can’t have your cake and eat it too. Humm. Now I get that line.

    Thanks, Roger always respect your opinion.

  2. Carla D Pratt says:

    Interesting debate on an issue that I had not followed. I generally favor transparency as well. If we are concerned with the misbehavior of government actors, we should regulate that rather than conceal the identity of donors. Charities enjoy a favored tax status which arguably justifies the transparency of identifying top donors.