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Welcome to Disclosure Digest
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May 18, 2021
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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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North Carolina Senate approves bill barring release of nonprofit donor information
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On May 11, the North Carolina Senate approved S636, which would prohibit the release of identifying information about a nonprofit's donors without the consent of its board of directors.
What the bill would do
S636 would amend North Carolina's nonprofit corporation laws to bar the disclosure of "the identity of any person giving monies or other tangible goods to [a] nonprofit corporation for furthering a charitable purpose of the nonprofit organization" without the consent of the organization's board of directors. This prohibition would apply to any identifying information reported to the Internal Revenue Service on Form 990.
S636 would also amend the state's public records laws, making nonprofit donor information confidential, "except as specifically required by State or federal law." The bill would take effect Oct. 1.
Legislative history
On April 6, Sens. Joyce Krawiec (R), Norman Sanderson (R), Bob Steinburg (R), Deanna Ballard (R), Dan Blue (D), Warren Daniel (R), Carl Ford (R), Kathy Harrington (R), Ralph Hise (R), and Paul Newton (R) introduced S636. The Senate approved the bill 28-21 on May 11. All Republicans present voted in favor of the bill, and all Democrats present voted against it (including Blue).
It is currently pending in the House Rules, Calendar, and Operations Committee.
Reactions
Writing for the John Locke Foundation, a North Carolina think tank that supports the legislation, Jon Guze said, "Laws and administrative orders that impose donor disclosure requirements on nonprofit organizations make people afraid to exercise their expressive rights, which is why the fight for donor privacy is so important."
Sen. Jeff Jackson (D), who voted against the bill, said, "Are we all exactly sure what the consequences of this bill will be? No, we’re talking about tax law and people who are trying to purposefully evade campaign law ... safe to say it’s a very dark cloud."
Political context: North Carolina has divided government. Gov. Roy Cooper is a Democrat, but Republicans control majorities in both chambers of the North Carolina General Assembly. Cooper has not indicated publicly whether he will sign or veto the legislation if it passes the House. If Cooper vetoes the bill, the General Assembly could override that veto by a three-fifths vote in both chambers. Republicans do not have veto-proof majorities in either chamber of the General Assembly.
Other relevant bills in North Carolina
S685 would prohibit any state or local government entity from enacting any "rule, regulation, or policy" requiring:
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An individual to disclose his or her donation to a nonprofit.
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A nonprofit to disclose its membership or donors.
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"Any list, record, register, registry, role, roster, or other compilation of data of any kind that directly or indirectly identifies a person as a member, supporter, or volunteer of, or donor of financial or nonfinancial support to a nonprofit corporation."
S685 would not apply to criminal investigations, court orders, or income tax reviews conducted under state law. The bill would take effect Oct. 1.
Sens. Jim Burgin (R), Kevin Corbin (R), Chuck Edwards (R), Lisa Barnes (R), Steven Jarvis (R), Tom McInnis (R), Blue, and Newton introduced S685 in the Senate on April 7. It passed its first reading and was referred to the Senate Rules and Operations Committee on April 8, where it is pending.
What other states are doing
State lawmakers in Iowa, Nebraska, West Virginia, and Wyoming have considered similar legislation this year. All four states are Republican trifectas, meaning that Republicans control the governorships and both chambers of the state legislatures in each.
Arkansas and South Dakota, both Republican trifectas, have enacted similar legislation this year. |
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The big picture
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Number of relevant bills by state: We're currently tracking 38 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 everyone with 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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Senate Appropriations Committee hearing scheduled for May 20.
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Nebraska LB8: This bill would change the statutory definition of an "independent expenditure." It would also alter reporting requirements for independent expenditures and electioneering communications.
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Democratic sponsorship.
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Patty Pansing Brooks (D) added as a co-sponsor on May 13.
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North Carolina S636: This bill would provide that, except as specifically required by state or federal law, the identity of any person giving money or other tangible goods to a nonprofit corporation or furthering any charitable purpose of that nonprofit corporation is confidential.
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Bipartisan sponsorship.
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Referred to the House Rules, Calendar, and Operations Committee on May 13.
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Tennessee HB0159: This bill would prohibit a public agency from disclosing identifying information about a nonprofit's donors.
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Republican sponsorship.
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Sent to the governor on May 13.
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