U.S. Supreme Court backs donor privacy
By Donna King, Carolina Journal
The U.S. Supreme Court backed donor privacy in a decision released Thursday, July 1. The closely watched ruling was based on a case from California in which the state's then-Attorney General Kamala Harris tried to require nonprofit organizations to disclose the identities of donors by requiring them to file an unredacted “Schedule B” with their taxes, which would reveal the identities of anyone giving $5,000 or more in money or goods.
Americans for Prosperity along with the Thomas More Law Center won an injunction against the California attorney general’s office in 2016, saying the requirement was a violation of donor’s right to free speech through their support of an organization or cause.
The 9th U.S. Circuit Court of Appeals ruled that revealing donor identities did not violate the donors’ rights, forcing the case to the U.S. Supreme Court, where 22 amicus briefs from both liberal and conservative groups were filed to support AFP’s position.
The justices heard arguments in May and released their ruling in favor of the plaintiffs and protecting donor privacy as a First Amendment right. Chief Justice John Roberts wrote the opinion with concurrence from Justices Brett Kavanaugh, Amy Coney Barrett, Samuel Alito, Neil Gorsuch, and Clarence Thomas. Justices Sonia Sotomayor, Stephen Breyer, and Elena Kagan dissented.
"California casts a dragnet for sensitive donor information from tens of thousands of charities each year, even though that information will become relevant in only a small number of cases involving filed complaints," the decision read.
"We have no trouble concluding here that the Attorney General’s disclosure requirement is overbroad. The lack of tailoring to the State’s investigative goals is categorical — present in every case — as is the weakness of the State’s interest in administrative convenience. Every demand that might chill association, therefore, fails exacting scrutiny."
The California Attorney General's office argued that the "Schedule B" was necessary to root out tax fraud in organizations, but the majority of justices said it was not a legal justification for the violation of privacy and speech.
"We believe it is necessary for individuals to be able to express and promote their viewpoints through associational affiliations without personally exposing themselves to a political firestorm or governmental retaliation, and today’s decision upholds those rights," Citizens United for Privacy said Thursday in a statement shortly after the ruling.
Donor privacy during Civil Rights era
The issue of donor privacy as a speech right actually dates back much further than this case, to at least the 1950s. During the earliest days of the civil rights era, states’ attorneys general wanted the donor list of the National Association for the Advancement of Colored People chapters.
As civil rights protests gained steam and donations, some states used new donation disclosure laws to root out financial support for the movement. North Carolina was one of the states to demand that the NAACP reveal its donors.
The NAACP says it lost more than half of its membership between 1955 and 1957. In 1958, the NAACP’s Alabama chapter sued the state over donor privacy in federal court and won. But the precedent of that decision has not always protected speech in the form of donations when similar lawsuits followed. In 2016, NAACP Legal Defense Fund filed a brief of support of AFP’s suit in the 9th Circuit. In Thursday's ruling, the justices referred to the case as a precedent.
Today, with the growing “cancel culture” trend and political vigilantism, the threat to small donors is even more real, according to supporters of the issue.
N.C. Senate passes donor privacy
In North Carolina, a measure that would keep charitable donors’ personal information private was approved in the N.C. Senate in May. The 28-21 vote fell along party lines, with Republicans voting in favor of Senate Bill 636.
Some Democrats have opposed the measure, saying it could help shield political “dark money” from public disclosure. But bill authors say it does not change the reporting requirements of political campaign finance disclosure laws. Electioneering donations fall under separate rules to ensure a public record of candidates’ financial supporters.
"Donations of an individual’s time, talent or money to a church, a charitable recovery group for addicts, or a nonprofit for after-school tutoring are not “dark”— but they are often deeply personal and potentially put us at odds with what family members or friends believe is a worthy cause,” said Susan Vick, an attorney and lobbyist representing People United for Privacy. “This bill simply protects donor lists from being required for disclosure under the guise of state action as we’ve seen in other states."
S.B. 636 prevents governments from compelling nonprofits to disclose the private information of their donors.
Bill sponsors say the measure is designed to protect the privacy of smaller-figure donors who make contributions to charity in either money or goods. The average private donation to charity is around $2,500, but most are less than $500. Those donations go to myriad organizations — from the arts to religious groups, volunteer medical providers, youth programs, and social movements. The impact of nonprofit organizations on North Carolina’s economy is close to $510 billion in revenue.
Supporters of the donor privacy protection bill say that if nonprofits were forced to reveal their donors publicly it could have a chilling effect on financial support for charitable giving. Donors could be subject to harassment, or worse, if their opinion was different from that of their employer, church, landlord, teacher, or even online “trolls” who could find donor addresses if they had the names.
The donor privacy bill in the N.C. General Assembly is sponsored by Sen. Norman Sanderson, R-Carteret, Sen. Bob Steinburg, R-Chowan, and Sen. Joyce Krawiec, R-Forsyth. Most notably, though, Dan Blue, D-Wake, the Senate’s Democratic Party leader, signed on as a co-sponsor but then voted against the bill. It is currently in the Committee on Rules and Operations of the House, where it awaits action.
