16 February 2018

Federal Appeals Court Upholds New York Law Requiring Nonprofits to Disclose Privacy of Donors

A three-judge panel of the U.S. Court of Appeals for the 2nd Circuit upheld a New York law on February 15 that requires nonprofit organizations to disclose information such as names, addresses and contributions of certain donors. The lawsuit involved both a 501(c)3 charity and a related 501(c)4 social welfare organization.

“We find that the mere requirement on a tax exempt organization to disclose its donor list to a state’s authority charged with regulating nonprofits does not impermissibly chill (First Amendment) speech or assembly rights,” the three-judge panel wrote in its decision, according to the New York Daily News.

The attorneys general in both New York and California have spearheaded efforts to force nonprofits to disclose donor data under the guise of prosecuting fraud. However, there has yet to be any substantial evidence disclosed that such an effort is justified. In the case of Americans for Prosperity Foundation v. Becerra in California, the district court found that not only did the collection of donor data fail to advance even one investigation, the attorney general’s office had also posted the donor information of more than 1,700 nonprofits on its website.

The Philanthropy Roundtable believes that 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. The Roundtable has filed amicus briefs in cases challenging efforts of government officials that erode the privacy of donors to 501(c)3 charities (see here and here). The Roundtable has also submitted testimony in state legislatures that are considering proposals that would threaten donor privacy to charities (New Mexico, Washington, Idaho).

The Roundtable’s principal focus is protecting donor privacy to 501(c)3 charities while 501(c)4 organizations that engage in politically-related speech remain outside of our purview. However, we will continue to follow the developments in the case in New York closely and take the necessary action to ensure philanthropic freedom and donor privacy are protected.