As Elections Approach, Court Orders Public Disclosure of Donors

October 2, 2018       The NonProfit Times      

Nonprofits that make political ads explicating telling viewers who to vote for or against must now disclose the identities of all contributors who gave more than $200 in a year. That’s the result after the U.S. Supreme Court on Tuesday lifted a temporary stay by Chief Justice John Roberts.

“The decision was not a surprise yet the impact will be large because for the first time in decades, (c)(4)s will have to be disclosing their contributors,” said Tim Delaney, president and CEO of the National Council on Nonprofits.

People can’t read too much into the court order, said Delaney, a former solicitor general for the State of Arizona. The decision was more procedural than on the merits of the case, he added.

Delaney also emphasized that the underlying case concerns the application of Federal Election Commission (FEC) rules on 501(c)(4) social welfare organizations – contributions to which are not tax deductible – and not 501(c)(3) charitable organizations.

“This decision moves us closer to Independent Sector’s position that nonprofits should disclose donors who fund partisan political activity,” said Allison Grayson, director of policy development and analysis at Independent Sector. “However, we urge the FEC to quickly provide guidance to help nonprofits comply with this rule change. It also is important to note, debates around donor disclosure and the Johnson Amendment are symptoms of a broader problem: confusing and conflicting political activity rules governing nonprofits. We must proactively work to align and clarify political activity rules to protect the public’s trust in the nonprofit sector,” she said in a statement.

The case was brought by Citizens for Responsibility and Ethics (CREW) against Crossroads GPS after the FEC dismissed its 2012 complaint. The decision, effectively immediately, means that contributors for a major category of dark money spending in this fall’s elections will have to be disclosed publicly, according to CREW.