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Welcome to Disclosure Digest
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June 29, 2021
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Scheduling note: This will be our last weekly edition of The Disclosure Digest for 2021. Starting next month, we will be publishing one issue per month. Keep an eye out for our next issue on July 27.
Join us today as we explore the legislation, litigation, and advocacy surrounding nonprofit donor disclosure.
Under federal law, nonprofits are generally not required to disclose to the public information about their donors. State laws, however, may require such disclosure. Some say expanded donor disclosure provisions minimize the potential for fraud and establish public accountability. Meanwhile, others say that disclosing to the public information about donors violates privacy rights and can inhibit charitable activity. |
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BALLOTPEDIA |
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New York Legislature adopts bill rolling back donor disclosure requirements
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On June 9, the New York Senate voted unanimously in favor of S4817, legislation that would roll back nonprofit donor disclosure requirements enacted in 2020. On June 10, the New York State Assembly followed suit, passing the bill 148-1.
What the bill proposes
As part of the 2020 state budget process, lawmakers established disclosure requirements for certain tax-exempt nonprofits. Under these requirements, 501(c)(4) groups that spend more than $10,000 on election-related communications must file financial disclosure requirements with the New York Department of State. These reports include identifying information about donors. The Department of State has said that while it might publish a nonprofit's reports submitted to the agency "if information that is inconsistent with an organization's charitable purposes is uncovered," it would not disclose identifying information about individual donors.
S4817 would roll back this reporting requirement. It would also specifically exempt from public records requirements any records that include "the name, addresses, or telephone numbers of contributors" to nonprofits. It directs the state attorney general to "keep such information confidential and use it solely for the purpose of enforcing [state law]."
Reactions
In his proposed budget for 2020, Gov. Andrew Cuomo (D) called for expanded donor disclosure requirements similar to those ultimately enacted into law. At that time, Jason Conwall, a spokesman for the governor, said, "The public has a right to know who is backing these organizations so voters can better understand the sources for their positions and make decisions with full knowledge of the facts. Everyone supports transparency until it shows up at their own front door. The proposal advanced in the Executive Budget is more narrowly tailored [than the 2016 law] and we are confident it will withstand judicial scrutiny."
In response to Cuomo's original proposal, Chai Jindasurat, policy director at Nonprofit New York, said, "Donors have legitimate and personal reasons for why they wouldn’t want to be disclosed or labeled [and] why they would want to give anonymously. If it is a problem, we’re happy to try and figure out a way to address transparency for all types of nonprofits. We just don’t know if it’s actually an issue."
What comes next
Cuomo has not indicated publicly whether he intends to sign S4817 into law.
In the event that Cuomo vetoes the bill, lawmakers can override the veto by a two-thirds vote in both chambers of the state legislature.
Relevant litigation
On April 26, the U.S. Supreme Court heard oral arguments in Americans for Prosperity Foundation v. Bonta, a case involving a California law that requires nonprofits to file copies of their IRS 990 forms with the state. This includes Schedule B, which contains the names and addresses of all individuals who donated more than $5,000 to the nonprofit in a given tax year. Although the law does not allow the public access to Schedule B information, court documents show that inadvertent disclosures have occurred.
In 2014, Americans for Prosperity challenged the law in U.S. district court, triggering a series of legal developments spanning several years. The U.S. Supreme Court is expected to make its ruling in the case this week. We will give you a full update on the ruling in our next edition. |
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The big picture
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Number of relevant bills by state: We're currently tracking 39 pieces of legislation dealing with donor disclosure. On the map below, a darker shade of green indicates a greater number of relevant bills. Click here for a complete list of all the bills we're tracking.
Number of relevant bills by current legislative status:
Number of relevant bills by partisan status of sponsor(s):
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Recent legislative actions
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For complete information on all of the bills we are tracking, click here.
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California SB686: This bill would require a limited liability company that qualifies as a committee or a sponsor of a committee under the state's campaign finance laws to file a statement of members with the secretary of state. The statement of members must include a list of all persons who have a membership interest in the limited liability company of at least 10% or who made a cumulative capital contribution of at least $1,000 to the company after it qualified as a committee or sponsor of a committee, or within the 2 calendar years before it qualified.
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Democratic sponsorship.
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The bill is scheduled to be considered at an Assembly Elections Committee hearing scheduled for June 30.
Thank you for reading! Let us know what you think! Reply to this email with any feedback or recommendations. |
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