U.S. Supreme Court Donor Disclosure Ruling is a Victory for Freedom of Association

Arlington, Virginia—In its final opinion of the 2020-2021 Term, the U.S. Supreme Court today struck down a California requirement that all nonprofits operating in the state turn over a list of their largest contributors to the state’s Attorney General. The Institute for Justice (IJ) filed an amicus brief in the consolidated cases, Americans for Prosperity Foundation v. Bonta and Thomas More Law Center v. Bonta.

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IJ Senior Attorney Paul Sherman said, “Today’s ruling reaffirms vital protections for the rights of privacy and association. California required tens of thousands of charities to disclose their most sensitive donor information and then mishandled that confidential information so badly that it was easily available to anyone with an internet connection. The Court correctly recognized what a grave threat this requirement posed to the rights of free speech and association.”

All charities in California must register with the state as a condition of fundraising. But in 2010 the state cracked down on charities that failed to turn over their IRS Schedule B, a federal tax document that lists the largest donors to any federally registered nonprofit. The Americans for Prosperity Foundation and the Thomas More Law Center challenged the requirement, arguing that the suspicionless collection of their donor information unconstitutionally burdened their freedom of association. A federal trial court agreed, holding the requirement unconstitutional, but the 9th U.S. Circuit Court of Appeals later reversed that decision. The Supreme Court granted review in the case in January 2021 and issued its opinion today.

Although California claimed that these compelled disclosures were vital to enforcing its charitable solicitation laws, the evidence showed conclusively that the state virtually never looked at this information. Instead, the Court concluded, “California’s interest is less in investigating fraud and more in ease of administration.” But “[m]ere administrative convenience does not remotely ‘reflect the seriousness of the actual burden’ that the demand for Schedule Bs imposes on donors’ association rights.”

Sherman added, “As far back as the Supreme Court’s seminal ruling in NAACP v. Alabama, the Court has made clear that the government cannot require charities to turn over their donor information except in the most limited circumstances. California’s argument was essentially that the state could require disclosure of any information from anyone for any reason, as long as it promised to keep that information safe. But the First Amendment is as much a protection against the government’s prying eyes as it is against the public disclosure of private information.”

“Disclosure is supposed to be about keeping tabs on government, not keeping tabs on private citizens,” said Institute for Justice President & 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 was debated before the U.S. Supreme Court in this case.”