09 August 2017

The Philanthropy Roundtable Defends Donor Privacy In New Mexico

by Marques Chavez, Director of Communications, The Alliance for Charitable Reform

The Philanthropy Roundtable sent a letter to New Mexico Secretary of State Maggie Toulouse Oliver this week highlighting how a proposed rule to the state’s administrative code, 1.10.13 NMAC, would harm charities and erode philanthropic freedom.

“Charitable organizations organized under section 501(c)3 of the federal tax code cannot participate in campaigns for public office, and those that do jeopardize their tax exempt status, yet 1.10.13 NMAC could impose intrusive and burdensome disclosure requirements upon these organizations if they even mention a public official who happens to be a candidate for office while speaking out on issues of public importance or otherwise communicating with clients, vendors, partners, donors, media, and others. This disclosure would inhibit charitable giving, ignore centuries of established religious, cultural, and practical reasons for protecting philanthropic anonymity, and undermine core First Amendment associational rights,” wrote Sean Parnell, vice president of public policy at The Philanthropy Roundtable, in the letter.

The proposed rule could require under certain circumstances that charitable organizations disclose the identity of its donors even if neither the intent nor the effect of the organization’s actions is to influence an election. For example, should a charity seeking to inform its members or the general public about any policy-related issue mention in a newsletter an official who may be a candidate for office, the rule could require the donors to that charity to be revealed. The rule would treat charities little differently than a political campaign committee for engaging in routine speech that has nothing to do with elections. It would also ignore the religious, cultural, and practical reasons philanthropists choose to remain anonymous and undermine core First Amendment rights.

There are already instances of how the disclosure requirements, like those found in 1.10.13 NMAC, would chill public discussion of important public issues. For example, a nonprofit in Colorado decided in 2014 not to run radio ads asking citizens to contact their U.S. Senators and urge them to support criminal justice reform because federal campaign finance law could have forced it to disclose its donors. The nonprofit ultimately sued to protect 501(c)3 charities from the overreaching regulation, which the Roundtable supported in an amicus brief earlier this year.

The Roundtable sees the forced disclosure of donor identity as a violation of philanthropic freedom, a hallmark of charitable giving in the United States. You can read a copy of the letter sent to New Mexico Secretary of State Oliver here.