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Can States Force Charities to Disclose Their Donors Thereby Exposing Them to Harassment?

U.S. Supreme Court Asked to Hear California Case About Donor Privacy

Arlington, Va.—This term, the U.S. Supreme Court has an opportunity to hear a First Amendment case with profound implications for nonprofit groups throughout the country. The case, Americans for Prosperity Foundation v. Becerra (No. 19-251), concerns whether the California Attorney General can force nonprofit groups to reveal the names of their donors as a condition of raising money in the state. The 9th U.S. Circuit Court of Appeals upheld the disclosure requirement in September 2018.

The Institute for Justice (IJ), a nonprofit, public-interest law firm that litigates nationwide in defense of First Amendment rights, has filed a friend-of-the-court brief urging the Supreme Court to hear the case.

Under California law, charities that solicit tax-deductible contributions in the state must file an annual copy of IRS Form 990 with the California Attorney General. This filing must also include the charity’s Schedule B, an IRS form that lists the names and addresses of donors who give more than $5,000 in one year to the charity.

For more than a decade, Americans for Prosperity Foundation (AFP) was permitted to solicit contributions in California without filing a Schedule B. But in 2013, California’s Attorney General declared that AFP’s 2011 filing was incomplete. AFP filed a federal First Amendment lawsuit to protect its First Amendment right to raise charitable contributions while protecting its donors’ privacy.

IJ Senior Attorney Paul Sherman said, “The Supreme Court has recognized for decades that charitable solicitation is core First Amendment activity, and that charities have a strong interest in protecting their donors from compelled disclosure of their names and addresses.”

“Disclosure is supposed to be about keeping tabs on government, not keeping tabs on private citizens,” said IJ’s President and General Counsel Scott Bullock. “Transparency is important for the government so the public can assess the actions of its lawmakers. But privacy for the individual—in their freedom of speech and freedom of association—is an essential American value, going as far back as the anonymous authorship of the Federalist Papers. Those anonymous documents laid the foundation for the very Constitution that will be debated before the U.S. Supreme Court in Americans for Prosperity v. Becerra.”

Although California is one of only three states—along with Florida and New York—that requires charities to disclose their donors’ identities, the 9th Circuit upheld the disclosure requirement as necessary to enforce the state’s charitable solicitation laws.

Sherman said, “The 9th Circuit’s ruling is wrong and dangerous. AFP’s founders have received death threats because of their political advocacy, and the State of California has never explained why it needs to know the names and addresses of AFP’s donors, when 47 states enforce their charitable solicitation laws without that information.”

“Charities should not have to show that their donors have been subject to the terroristic threats the NAACP suffered in the 1950s before they will be allowed to keep their donor lists private,” Sherman said. “By that time, the harm to private speech and association has already been done. But that is the standard the 9th Circuit’s ruling forces charities to meet if they want to protect their donors’ privacy.”

Sherman added, “This ruling sets a dangerous precedent. At a time when trust in government is near historic lows, charitable donors have every reason to want to keep their identities private. If the government thinks that information is necessary to investigate violations of the law, it can do what the government is supposed to do: get a warrant.”

The Supreme Court has requested that the U.S. Solicitor General file a brief expressing the federal government’s views on the case, and has relisted the case for consideration multiple times—both considered strong signals that the Court is considering granting review in the case. A ruling on whether to take the case is expected early in the October 2020 Supreme Court term.

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