Donor Disclosure Arrives at the Supreme Court


The United States Supreme Court in Washington, D.C.



Photo:

will dunham/Reuters

That politics makes strange bedfellows is an old observation, yet Monday’s lineup at the Supreme Court remains a sight to behold. On one side is California, which is demanding that nonprofit groups hand over lists of their major donors.

Arrayed on the other side: The Americans for Prosperity Foundation (AFPF), a project of

Charles Koch

; the NAACP Legal Defense and Educational Fund; a Christian law center named for Thomas More; the Council on American-Islamic Relations; and the Human Rights Campaign. We could go on.

Monday’s paired cases, consolidated under AFPF v.

Rodriquez

, ask an important question at a time when people are keelhauled by tweet for having unpopular political views or making a tasteless joke. Donors to nonprofits that are involved in heated issues—say, abortion, religious liberty or transgenderism—deserve robust protections for their privacy.

Many nonprofits provide the federal government with the names and addresses of major donors, generally those giving $5,000 a year, on an IRS form called a Schedule B. The legal question here is whether California can set a blanket policy of demanding copies of Schedule Bs as a matter of course. The state says in its brief that donor details help regulators “detect whether a charity is misusing charitable assets.” Looking through the Schedule B haystack is “the first step in evaluating a complaint about a charity.”

California could get Schedule B information via subpoenas or audit letters, but it says that’s burdensome, since “more than 100,000 registered charities solicit funds from state residents and 50 to 100 complaints can be received each month.” These are persuasive figures, but not in the direction the state suggests. They multiply to a maximum of 1,200 complaints a year, or 1% of the cited number of total charities.

The state wants to maintain what amounts to a donor database, with possibly hundreds of thousands of names and addresses. “California’s compulsory disclosure regime could not meet any conceivable standard of means-end fit,” AFPF argues. As for the state’s gripe that using subpoenas or audit letters isn’t feasible: “Forty-seven other States rely exclusively on those case-specific mechanisms to obtain donor information for fraud investigations.”

California pledges to keep donor info confidential. Yet during the litigation, 1,778 Schedule Bs were discovered publicly available online. AFPF adds that the state’s flawed system allowed anybody to page through 350,000 confidential files “merely by changing a single digit at the end of the website’s URL.” California says it now has better security. But as AFPF argues, leaks and hacks are a “predictable result of such indiscriminate collection.” Imagine if two dozen states had Schedule B files.

These facts explain why the nonprofits filing amicus briefs are not birds of a feather. “In light of California’s record of inadvertently publicizing these sensitive documents, its demand should be treated as a de facto public-disclosure requirement,” says a coalition that includes the American Civil Liberties Union Foundation and the NAACP legal fund. The latter group’s appearance is particularly noteworthy since it litigated NAACP v. Alabama (1958), the landmark case protecting membership lists in the

Jim Crow

era.

The challenge of the internet age is that, in the blink of an eye, an outed donor could face a

Twitter

mob that posts his address, email address, picture, place of business, kids’ names, and more. After watching the unending harassment of

Jack Phillips,

the Colorado baker who declined to create a cake for a gay wedding, is it any wonder that a donor to a nonprofit legally defending him might fear disclosure? Ditto for causes on the left like Planned Parenthood.

The First Amendment guarantees free association. That includes private association.

Journal Editorial Report: A House packing bill is an act of intimidation. Image: Saul Loeb/AFP via Getty Images

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Appeared in the April 24, 2021, print edition as ‘Donor Disclosure at the Supreme Court.’



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