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Supreme Court Hears Case On Donor-Disclosure Requirement

Written by Sorin Leahu on May 5, 2021 Category: First Amendment, Nonprofits

For many not-for-profit organizations, the primary means of sustaining their operations is through the voluntary donations of their supporters. But can the government require a not-for-profit to disclose the identity of its donors?

In 2010, the California Attorney General’s Office instituted a new policy to demand all non-profits who fundraise in the state to provide all their major supporters’ information every year. However, many organizations across the political spectrum have raised concerns about California’s disclosure requirement. Two of them, the Thomas More Law Center and the Americans for Prosperity Foundation, have brought their cause all the way to the Supreme Court which held oral argument on their consolidated cases on April 26, 2021.

Both the Thomas More Law Center and the Americans for Prosperity Foundation are non-profit organizations who rely on support from donors to fulfill their missions. The Thomas More Law Center is a Michigan-based legal organization that defends and promotes religious freedom, moral and family values, and the sanctity of life. The Americans for Prosperity Foundation educates and trains citizens to be advocates for freedom.

These organizations have argued that being forced to disclose the identity of their donors would subject their donors to harassment and intimidation and have a chilling effect on the freedom of speech and association. In fact, the organizations submitted substantial evidence, and the trial court found, that private donor information had been leaked in the past and that donors had in fact been subjected to harassment, intimidation, and even death threats.

These issues harken back to the 1958 landmark Supreme Court decision in NAACP v. Alabama. In that case, Alabama sought to prevent the NAACP from conducting further business in the state. After the circuit court issued a restraining order, the state issued a subpoena for various records, including the NAACP’s membership lists. The Supreme Court, in a unanimous decision, ruled in favor of the NAACP holding that “[i]mmunity from state scrutiny of petitioner’s membership lists is here so related to the right of petitioner’s members to pursue their lawful private interests privately and to associate freely with others in doing so as to come within the protection of the Fourteenth Amendment” and held that freedom to associate with organizations dedicated to the “advancement of beliefs and ideas” is an inseparable part of the Due Process Clause of the Fourteenth Amendment. The court then concluded that the state obtaining the names of the NAACP’s membership would likely interfere with the free association of its members.

The case presently before the Supreme Court is of utmost importance to not-for-profits seeking to protect the privacy of their donor base. A decision in the case will be expected at the end of the Supreme Court’s current term.

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