Show Us Your Donors
November 5 | Posted by mrossol | American Thought, Losing Freedom, US ConstitutionDisclosure is the watchword for liberals who want to use campaign-finance laws to discourage political speech, but disclosure’s risk to the First Amendment reaches beyond politics. The Supreme Court may decide as early as Friday to hear a case on whether a government official can demand that a nonprofit group hand over a list of its major donors.
The First Amendment says “Congress shall make no law . . . abridging the freedom of speech . . . or the right of the people peaceably to assemble.” Under a decision from the Ninth Circuit Court of Appeals, that freedom could be chilled if state governments demand donor disclosure from tax-exempt groups that aren’t required to disclose them under the federal tax code.
California regulations require groups who want to solicit charitable funds in the state to register with the California Registry of Charitable Trusts. As part of registration, groups must file a copy of their IRS Form 990. Donor names, which are anonymous under the Internal Revenue Code, are typically redacted.
But in 2014 California Attorney General Kamala Harris began demanding that nonprofits turn over unredacted donor names as a condition of soliciting donors in California. The Center for Competitive Politics (CCP), a 501(c)(3) that works on election law, sued on grounds that compelling that disclosure violates the First Amendment ( Center for Competitive Politics v. Harris).
Ms. Harris says the unredacted information is necessary so the state can see “whether an organization has violated the law, including laws against self-dealing, improper loans, interested persons, or illegal or unfair business practices.” But she doesn’t say how donor names and addresses help with that objective. In 1976 the Supreme Court wrote in Buckley v. Valeo that “we have repeatedly found that compelled disclosure, in itself, can seriously infringe on privacy of association and belief guaranteed by the First Amendment . . . and cannot be justified by a mere showing of some legitimate governmental interest.” In its most famous disclosure case, 1958’s NAACP v. Alabama ex rel. Patterson, the Court said that government scrutiny of group membership violated the right of citizens “to pursue their lawful private interests privately and to associate freely with others in so doing.”
That’s often true at charities, whose donors may value anonymity for such reasons as religious belief or a desire not to flaunt their wealth. In 2014 individuals gave some $287 billion to charity, including more than a million nonprofits. According to the Philanthropy Roundtable, one-eighth of those are registered to solicit in California. New York and Florida are also now requiring nonprofits to disclose their donors to government.
If government officials really need donor information to enforce the law, they can use the regular legal method of establishing cause to suspect a crime and subpoenaing additional information. The question for the Supreme Court is whether Americans still have a right to associate in private, or whether politicians can compel disclosure that chills speech and damages the First Amendment.
WSJ – 11/5/2015
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