11 January 2018

The Philanthropy Roundtable Defends Donor Privacy in Washington

The Philanthropy Roundtable expressed concerns that the privacy for donors to 501(c)3 charities in Washington could be compromised under legislation being considered by state lawmakers. The Roundtable submitted testimony to the Washington State Senate for yesterday’s hearing on SB 5991, the Washington State Disclose Act of 2018.

“The proposed legislation would require, among other things, that campaign finance laws apply to charitable organizations and force them to disclose donors under certain circumstances even if neither the intent nor the effect of their speech is to influence an election. It should be noted that we are talking here about charities organized as corporations under section 501(c)3 of the federal tax code, which are prohibited from intervening in ‘any political campaign on behalf of (or in opposition to) any candidate for public office,’” wrote Sean Parnell, vice president of public policy at The Philanthropy Roundtable, in his testimony.

SB 5991 would require the disclosure of contributions and expenditures by nonprofit organizations that participate significantly in Washington state elections. However, charities organized under section 501(c)3 of the federal tax code are already prohibited from engaging in political campaign intervention. SB 5991 would in many circumstances treat charities the same as a political campaign committee for engaging in routine speech that has nothing to do with elections, even with language in the legislation exempting some types of speech by organizations from the definition of an “electioneering communication.” At a minimum, it will cause confusion among charities that would chill public discussion of important public issues.

Parnell’s testimony explained the cultural, religious, and practical reasons that drive many philanthropists to give anonymously. “The Bible instructs Christians to ‘Take heed that you do not do your charitable deeds before men… But when you do a charitable deed, do not let your left hand know what your right hand is doing, that your charitable deed may be in secret,’” the testimony noted, as well as citing traditions of anonymous giving in Judaism, Islam, and Buddhism. Other philanthropists wish to avoid unwanted solicitations for further donations, such as George Eastman who gave $10 million to MIT in 1912 and was later revealed as the donor, causing him “abundant occasion to regret that his identity is no longer a secret” as he was pursued for additional giving, according to The New York Times. Many charitable givers, such as the late British pop star George Michael, give anonymously to avoid detracting from the good work of the causes they support.

“Another reason donors to charitable organizations sometimes prefer anonymity is because they are concerned that their giving to controversial causes might trigger retribution, economic reprisals, and even violence,” Parnell’s testimony stated. “It was because of concern over these sorts of retribution that in 1958 the U.S. Supreme Court ruled that the State of Alabama could not force the National Association for the Advancement of Colored People to reveal its members and donors because doing so would infringe on core First Amendment rights by exposing them to ‘economic reprisal, loss of employment, threat of physical coercion, and other manifestations of public hostility… [C]ompelled disclosure of petitioner’s Alabama membership… may induce members to withdraw from the Association and dissuade others from joining it because of fear of exposure of their beliefs shown through their associations and of the consequences of this exposure.’”

A copy of Parnell’s testimony can be found here.