Arguments against disclosing nonprofit donor information to governments

This article is one of 10 that described arguments about donor privacy and disclosure policy between 2019 and 2023. This article may not reflect subsequent developments in arguments about donor privacy and disclosure policy. For more on Ballotpedia's past donor privacy and disclosure policy coverage, click here.

Opponents of donor disclosure to governments argue that mandatory donor disclosure violates free speech rights, violates donors' rights to free association and privacy, stifles public debate and discussion, and can lead to donor harassment, backlash, or retaliation.

Click on the arguments below to see statements from opponents of disclosing nonprofit donor information to governments:

• Nonprofit donor disclosure violates free speech rights
• Disclosure violates rights to free association and privacy
• Disclosure can lead to donor harassment, backlash, retaliation
• Disclosure of confidential donor information by governments does occur
• Government has other means to combat fraud and nonprofit fraud and corruption
• Disclosure is a solution in search of a problem and consumes resources with no clear benefit or purpose
• The California state government’s donor disclosure requirements were exceedingly broad and disproportional

Argument: Nonprofit donor disclosure violates free speech rights[edit]

• The Goldwater Institute, which describes itself as a “conservative and libertarian public policy think tank," said that requiring nonprofit organizations to disclose their donor information as a check against nonprofit political activity when they are prohibited from political advocacy in the first place by the nature of their 501(c)(3) status, is illogical: “Because 501(c)(3) organizations are expressly prohibited from participating in candidate campaign advocacy by virtue of their 501(c)(3) designation, the government justifications for restricting speech in other campaign finance cases simply do not apply to issue advocacy groups. Thus, attempts to force the disclosure of donors to 501(c)(3) nonprofits offend basic principles of free speech and violate the Constitution.”^[1]

• Writing for The Hill, Benjamin Chavis—president and CEO of the National Newspaper Publishers Association (NNPA), and former executive director and CEO of the National Association for the Advancement of Colored People (NAACP)—argued that "the [Americans for Prosperity Foundation v. Bonta] case deals not with elections but with the narrow question of whether attorneys general can force 501(c)(3) organizations to disclose their supporters to the state. To categorize this issue as one of campaign finance is entirely disingenuous. . .The high court deserves praise for yet again defending the rights of Americans who privately support activism efforts of paramount importance to the citizenry’s right to life, liberty, and the pursuit of happiness. The ruling in AFPF will protect not only civil rights but the causes of every underserved and underrepresented segment of the population that are worth fighting for each day."^[2]

• Timothy Head, Executive director of the Faith and Freedom Coalition, commented in Governing Magazine on the Supreme Court’s Americans for Prosperity v. Bonta ruling: "Freedom of speech is about more than just the legality or illegality of certain words, ideas or books. Free speech isn’t free if people can’t speak without fearing harassment, persecution, or violence for what they say. In a robust and lively republic, some forms of speech are bound to be controversial. People might not like your views, and they may want to ridicule or criticize you for them. Sometimes this can be good. Other times, it can chill free speech by making the cost of speaking your mind too high. That’s where anonymity comes into play. Anonymity provides people with a way to exercise their free speech without great social cost. If your speech is controversial, anonymity can ensure you aren’t penalized for speaking. And since how you spend your money is a form of speech, legal protections for anonymous money donations are an essential part of defending free speech."^[3]

• The Las Vegas Review-Journal editorial board commented on the Americans for Prosperity v. Bonta Supreme Court ruling (2021): "Anonymous speech has a long and proud history in this country — The Federalist Papers, for instance. The Golden State’s law, passed under the guise of fighting fraud, was in truth an effort to use disclosure laws as a tool to intimidate donors to non-progressive causes, and it represented a clear threat to political speech and free association. . .Americans should enjoy the right to donate to private organizations that they support without the government demanding the information, which could then be used against them. The First Amendment is stronger thanks to this ruling."^[4]

• Mark Brnovich (R), the Arizona Attorney General, wrote in an editorial that "ultimately, free speech doesn’t mean individuals can or should escape societal consequences when they do something heinous or illegal. It does provide that nobody should be subjected to systemic harassment for holding personal opinions and supporting lawfully engaged groups. Compelled disclosure undermines free expression and fuels the cancel culture."^[5]

Argument: Disclosure violates rights to free association and privacy[edit]

• In the 1958 case NAACP v. Alabama, the NAACP sought protection from the courts from being required by the state to provide names and addresses its members in Alabama. In that case, the Supreme Court “[concluded] that Alabama has fallen short of showing a controlling justification for the deterrent effect on the free enjoyment of the right to associate which disclosure of membership lists is likely to have.” The court’s majority opinion continued: “Compelled disclosure of affiliation with groups engaged in advocacy [could be an] “effective … restraint on freedom of association … particularly where a group espouses dissident beliefs.” In its 2015 lawsuit against the State of California, the Americans for Prosperity Foundation (a nonprofit) argued that “confidential disclosure [of the organization’s Schedule B form] to [the Attorney General’s] office itself chills protected conduct or would lead to persecution and harassment of their donors by the state or the public.”^[6][7]

• In the majority opinion in Americans For Prosperity Foundation v. Bonta, Chief Justice John Roberts argues that California donor disclosure requirements are too broad to match the policy’s main objective and prevent corruption and fraud by nonprofit organizations. The opinion states: “California’s disclosure requirement imposes a widespread burden on donors’ associational rights, and this burden cannot be justified on the ground that the regime is narrowly tailored to investigating charitable wrongdoing, or that the State’s interest in administrative convenience is sufficiently important."^[8]

• In its summary of Americans for Prosperity v. Rodriquez (2021), the Legal Information Institute—a nonprofit legal information clearinghouse sponsored by Cornell University—said: “a line of cases dealing with compulsory disclosure of private associational membership lists—beginning with NAACP v. Alabama—serves as clear precedent for why compelled disclosure rules that potentially impinge on free association should be subjected to the most stringent form of judicial review.”^[9]

• In a 2018 amicus brief on Americans for Prosperity v. Becerra, the American Legislative Exchange Council, a nonprofit that describes itself as a "membership organization of state legislators dedicated to the principles of limited government, free markets, and federalism," argued the right to privacy is intrinsic to both constitutional rights and philanthropic giving. ALEC wrote that the “first, fourth, fifth and fourteenth amendments of the United States Constitution have been interpreted by the U.S. Supreme Court to respect that an individual has an inferred right to privacy under many circumstances. . .violating the privacy of individuals who choose to donate to nonprofit tax-exempt organizations has the potential to pose a serious threat to an individual’s safety and well-being, chill free speech for fear of retribution and stifle subsequent participation in the political system. . .American Legislative Exchange Council asserts government transparency coupled with individual privacy is essential to keeping government accountable to the people and the people free from excessive government intrusion."^[10]

Argument: Disclosure can lead to donor harassment, backlash, retaliation[edit]

Some claims in the arguments about donors’ right to privacy and free association highlight the potential for donor information to be used for harassment and threats. In NAACP v. Alabama on whether the NAACP should be allowed to keep donor and member lists confidential, witnesses testified that “between 100 and 150 members declined to renew their NAACP membership, citing disclosure concerns.”^[11]

• Brad Smith, a former member of the Federal Election Commission and chairman of the Institute for Free Speech whose mission is to "promote and defend the First Amendment rights to freely speak, assemble, publish, and petition the government," said in a 2019 interview: "We have documented evidence of people [whose donations become public] being fired from their jobs, or companies not really wanting to fire them but feeling they had to because they were being boycotted or harassed. We have evidence of people being in some cases physically attacked.”^[12]

• The 2021 Supreme Court opinion in Americans for Prosperity v. Bonta argued the regulatory requirement to disclose donor information, even if the information is kept confidential, creates a chilling effect on potential donors: “California’s demand for Schedule Bs cannot be saved by the fact that donor information is already disclosed to the IRS as a condition of federal tax-exempt status. For one thing, each governmental demand for disclosure brings with it an additional risk of chill.”^[8]

• Writing for the majority in Americans for Prosperity v. Bonta, Chief Justice Roberts identified the potential for public harassment as a threat to the freedom of association: “When it comes to the freedom of association, the protections of the First Amendment are triggered not only by actual restrictions on an individual’s ability to join with others to further shared goals. The risk of a chilling effect on association is enough.”^[8]

Argument: Disclosure of confidential donor information by governments does occur[edit]

In the original California district court ruling in Americans for Prosperity v. Harris in 2016, the court found that although California had protections in place to prevent unauthorized disclosure of the information, those protections are not necessarily effective, and there have been unintentional leaks of releases of confidential information.

• Writing in support of Americans for Prosperity in their lawsuit against the State of California, the American Civil Liberties Union argued that the rarity of accidental disclosures of confidential donor information does not negate the risks to nonprofit organizations and their donors. “Although California purports to keep donor information confidential, the record in this case reveals a disturbing pattern of widespread, though inadvertent, disclosure; for example, California inadvertently published more than 1,700 Schedule B forms on a public website, over a period ranging from 2012 until the eve of trial in this case.”^[13]

• Jennifer C. Braceras, director of the Independent Women’s Law Center and a former member of the U.S. Commission on Civil Rights, said in a 2021 interview: “Like the fight for American independence, the abolitionist movement, the quest for women’s suffrage and the American civil rights movement, most causes or social movements today (on the right and the left) depend, in part, on the support of anonymous donations. In the era of cancel culture, doxxing, computer hacking and cyber-bullying, the Supreme Court must protect our right to join and support unpopular groups anonymously."^[14]

Argument: Government has other means to combat fraud and nonprofit fraud and corruption[edit]

• Writing for the majority in the Ninth Circuit Court of Appeals decision in Americans for Prosperity v. Becerra (2018), Judge Raymond C. Fisher: “The plaintiffs nonetheless question the strength of the state’s governmental interest, arguing the Attorney General’s need to collect Schedule B information is belied by the evidence that he does not use the information frequently enough to justify collecting it en masse, he is able to investigate charities without Schedule B information and he does not review individual Schedule B forms until he receives a complaint, at which point he has at his disposal tools of subpoena and audit to obtain the Schedule B information he needs.”^[11]

• When the U.S. Supreme Court announced in early 2021 that they would take up Americans for Prosperity v. Becerra, Americans for Prosperity said there was a lack of security and confidentiality in the California registry of nonprofit organizations where the requested Schedule B data was held: “There was ample evidence of human error in the operation of the state’s system. State employees were shown to have an established history of disclosing confidential information inadvertently, usually by incorrectly uploading confidential documents to the state website such that they were publicly posted. Such mistakes resulted in the public posting of around 1,800 confidential Schedule Bs, left clickable for anyone who stumbled upon them. And the public did find them. For instance, in 2012 Planned Parenthood became aware that a complete Schedule B for Planned Parenthood Affiliates of California, Inc., for the 2009 fiscal year was publicly posted; the document included the names and addresses of hundreds of donors.”^[15]

• Writing for the majority in the 2021 Supreme Court decision in Americans for Prosperity v. Bonta, Chief Justice John Roberts said: “The upshot is that 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. California does not rely on Schedule Bs to initiate investigations, and in all events, there are multiple alternative mechanisms through which the Attorney General can obtain Schedule B information after initiating an investigation.”^[8]

Argument: Disclosure is a solution in search of a problem and consumes resources with no clear benefit or purpose[edit]

• The Legal Information Institute—a nonprofit legal information clearinghouse sponsored by Cornell University—summarized arguments made in favor of mandatory filing of donor disclosure information: nonprofit fraud and corruption investigations are rare; nonprofit organization fraud is also exceedingly rare, and requirements to disclose donor information are thus overly broad and not tailored to address concerns about nonprofits engaged in fraudulent practices specifically. In their summary of Americans for Prosperity Foundation v. Rodriquez, the institute said, “Despite all states having that same interest, California is one of only two states that compel charities to make these sorts of disclosures. Broad, prophylactic rules, petitioners argue, do not qualify as narrowly tailored means to prevent fraud. Furthermore, as evidence that the stated interest is not supported by the regulation, petitioners point out that California rarely used the disclosed information required by Schedule B to initiate or supplement enforcement actions over the past decade.”^[16]

Argument: The California state government’s donor disclosure requirements were exceedingly broad and disproportional[edit]

• Writing for the majority in the 2021 Supreme Court decision in Americans for Prosperity v. Bonta, Chief Justice John Roberts said: “A substantial relation is necessary but not sufficient to ensure that the government adequately considers the potential for First Amendment harms before requiring that organizations reveal sensitive information about their members and supporters. Where exacting scrutiny applies, the challenged requirement must be narrowly tailored to the interest it promotes, even if it is not the least restrictive means of achieving that end. . . There is a dramatic mismatch, however, between the interest that the Attorney General seeks to promote and the disclosure regime that he has implemented in service of that end. [. . . ] And even if the State relied on up-front collection in some cases, its showing falls far short of satisfying the means-end fit that exacting scrutiny requires. . .California is not free to enforce any disclosure regime that furthers its interests. It must instead demonstrate its need for universal production in light of any less intrusive alternatives.”^[8]

• Writing for the majority in the 2021 Supreme Court decision in Americans for Prosperity v. Bonta, Chief Justice Roberts said that the policy objective of preventing nonprofit fraud is sound but is not proportional to the policy itself, which requires the universal filing of sensitive donor information: “We do not doubt that California has an important interest in preventing wrongdoing by charitable organizations. . .There is a dramatic mismatch, however, between the interest that the Attorney General seeks to promote and the disclosure regime that he has implemented in service of that end.”^[8]

Overview of arguments taxonomy[edit]

See also: Taxonomy of arguments about donor disclosure and privacy

Ballotpedia broke down the debate over donor disclosure and privacy according to the following three subject areas that each had supporting and opposing arguments:

Arguments about disclosure of nonprofit donor information to governments

• Arguments in favor of disclosing nonprofit donor information to governments

• Disclosure ensures accountability and prevents fraud and corruption
• Disclosure limits the influence of major donors using nonprofits to advance private interests
• Exposure of donor information is rare, and the risk to donors and nonprofits is low
• Disclosure prevents foreign influence in politics and elections
• Disclosure and donor visibility benefits nonprofits as an endorsement of their mission
• Nonprofit donor disclosures do not deter donors from contributing
• Providing information on donors does not burden nonprofits and builds trust

• Arguments against disclosing nonprofit donor information to governments

• Nonprofit donor disclosure violates free speech rights
• Disclosure violates rights to free association and privacy
• Disclosure can lead to donor harassment, backlash, retaliation
• Disclosure of confidential donor information by governments does occur
• Government has other means to combat fraud and nonprofit fraud and corruption
• Disclosure is a solution in search of a problem and consumes resources with no clear benefit or purpose
• The California state government’s donor disclosure requirements were exceedingly broad and disproportional

Arguments about disclosure of nonprofit donor information to the public

• Arguments in favor of disclosing nonprofit donor information to the public

• Donor disclosure requirements do not constrain constitutional rights to free speech and free association
• Disclosure increases accountability and prevents fraud and corruption
• Disclosure limits the influence of major donors using nonprofits to advance private interests
• Disclosure and donor visibility benefits nonprofits as an endorsement of their mission
• Donor disclosure does not inhibit charitable giving
• Disclosure is part of donors’ responsibility to stand behind their positions
• Donor disclosure provides the public with information about who is attempting to influence public debate

• Arguments against disclosing nonprofit donor information to the public

• Nonprofit donor disclosure to the public violates free speech rights
• Disclosure violates rights to free association and privacy
• Disclosure subjects donors to potential harassment, retaliation, and danger
• Disclosure inhibits charitable giving, harming the viability of nonprofits
• Disclosure harms the public by creating selective enforcement and suppression of controversial or politically unpopular ideas and groups

Arguments about donor disclosure and political polarization

• Arguments that limiting donor disclosure causes political polarization

• Undisclosed spending by nonprofits has allowed donors to have an outsized influence on American politics
• The influence of undisclosed spending has eroded the public’s trust in government and democratic institutions
• Not requiring donor disclosure has made political communications more opaque
• Limiting donor disclosure creates incentives for controversial ideas to spread in the public square

• Arguments that limiting donor disclosure does not cause political polarization

• Limiting disclosure ensures that controversial or politically unpopular ideas and causes can be heard in the public square
• Nonprofit donor confidentiality is not a major concern of voters or the source of political conflict
• Political campaign donations are fully transparent yet still lead to corruption and fraud and generate political and social polarization
• Rights of free speech and free association are central to the donor confidentiality debate across the political spectrum

See also[edit]

• Donor disclosure and privacy policy in the United States, 2019-present
• Arguments about disclosure of nonprofit donor information to governments
• Arguments about disclosure of nonprofit donor information to the public
• Arguments about donor disclosure and political polarization

External links[edit]

• IRS disclosure requirements
• Philanthropy Roundtable
• The Nonprofit Times

Footnotes[edit]

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