29 April 2016

Donor Privacy Court Ruling in California

You may recall that last September, The Philanthropy Roundtable filed an amicus briefsupporting a petition to the Supreme Court for a writ of certiorari to review the judgment of the U. S. Court of Appeals for the Ninth Circuit in a California donor privacy case. Center for Competitive Politics v. Harris (CCP v. Harris), focused on the demand of that state’s Attorney General, Kamala Harris, that all Form 990 submissions made to satisfy the filing requirements of California’s charitable solicitation rules include an unredacted Schedule B. Schedule B includes the names, addresses, and contribution amounts of all major donors. The Schedule B is submitted to the IRS on a confidential basis, and federal law prohibits the agency from releasing this information to anyone. Similar privacy protections do not exist in California. Unfortunately, the Supreme Court declined to hear the CCP case.

The decision was disappointing, but we were encouraged by other cases in progress in both California and New York, where state Attorney General, Eric Schneiderman, also insists on the inclusion of Schedule B in all nonprofit solicitation filings. Late last week we learned that the U. S. District Court for the Central District of California had ruled in favor of the plaintiff in Americans for Prosperity Foundation v. Harris (AFP v. Harris). Noting that “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 ruled the disclosure requirement an unconstitutional burden on First Amendment rights and granted AFP’s motion for a permanent injunction.

Citing the Ninth Circuit’s ruling for Attorney General Harris in the CCP case, Judge Real pointed out that the decision had left open the possibility for a plaintiff to bring evidence of “a reasonable probability that the compelled disclosure of [its] contributors’ names will subject them to threats, harassment, or reprisal from either Government officials or private parties.” In AFP v. Harris, he noted, “This Court is more than satisfied that such a showing was made at trial.” Testimony included incidents of harassment against AFP staff members and event guests, as well as threats – including death threats – directed at major AFP donors. The California Attorney General’s office has already announced that it will appeal the District Court’s decision to the United States Court of Appeals for the Ninth Circuit. We will be watching to see if the evidence which persuaded Judge Real that genuine harm had been done by mandatory donor disclosure also convinces the judges of the Ninth Circuit.

The Philanthropy Roundtable’s 2015 amicus brief in CCP v. Harris reflected our core belief in philanthropic freedom – the right of Americans to choose how and where to spend their charitable assets – and our commitment to safeguard the freedom of donors and private foundations to carry out their diverse charitable goals and missions.¬†Donor privacy and confidentiality are essential to a vibrant civil society, and unwarranted state incursions into private charitable giving will chill the exercise of First Amendment freedoms which insure that donors may give even to controversial philanthropic causes without fear of harassment and reprisal. Consider how breaches of confidentiality might have affected the civil rights movement in the 1950s and 1960s. Donor privacy also protects those who choose to give anonymously for a variety of good reasons, including deeply held moral or religious beliefs, a sense of humility, a wish to lead a more private life, and the desire to minimize solicitations from other organizations. Judge Manuel Real’s decision in AFP v. Harris has dealt an important blow to those who would deny charitable donors their freedom to give.