Donor Protection, Privacy Central To New Court Filing
January 30, 2017 Mark Hrywna
The Philanthropy Roundtable filed an amicus brief Friday in a case challenging the California attorney general’s requirement that nonprofits disclose major donors in their annual registration filings.
The 34-page brief was filed Friday in Americans for Prosperity Foundation v. Becerra. The roundtable asks the U.S. Court of Appeals for the 9th Circuit to uphold a federal district court’s earlier ruling that the attorney general’s office attempt to force nonprofits to disclose donor lists is an unconstitutional burden on its 1st Amendment rights.
“Anonymous charitable giving has a long and important history in philanthropy, stretching at least from the Biblical admonition ‘that your giving may be in secret’ to the countless number of citizens today who choose to give privately on crowdfunding platforms that support the needs of individuals and causes they find worthy,” said Sean Parnell, vice president of public policy at The Philanthropy Roundtable. It is a network of charitable donors comprised of 650 individual philanthropists, family foundations, and other private grantmaking institutions.
“The freedom of individuals to decide for themselves whether to make their giving public is vital to preserving a robust, independent philanthropic sector, and California’s attorney general has demonstrated neither the need for this information nor the ability to maintain its confidentiality,” he said.
Since 2010, the California attorney general’s office has interpreted state regulations as requiring nonprofits to submit unredacted versions of Schedule B within their Internal Revenue Service (IRS) Form 990. Schedule B includes the names, addresses, and contributions received from significant donors.
Americans For Prosperity Foundation (AFPF) sued the attorney general’s office, arguing that the requirement violates donor privacy and the First Amendment. A U.S. District court judge in the Central District of California ruled in favor of AFPF in April. “The record before the court lacks even a single, concrete instance in which pre-investigation collection of a Schedule B did anything to advance the attorney general’s investigative, regulatory or enforcement efforts,” Judge Manuel Real said in his decision.
The brief argues that anonymous giving is a “longstanding and indispensable feature of American philanthropy” and that the state’s forced collection and disclosure of donor information raises serious constitutional concerns.
If left unchecked, California’s scheme risks chilling anonymous giving and undermining the charitable aim of thousands of individuals,” the roundtable contends in its brief.
Many donors give to high-profile causes only on the condition of anonymity, Philanthropy Roundtable argues, citing a 2012 book that said anonymous donors have been the largest grant-makers to LGBT causes between 1970 and 2010, giving more than $90 million. Donors who support traditional marriage also give anonymously, as do donors to Planned Parenthood and pro-life organizations.