Supreme Court to hear California case on privacy rights of donors to nonprofit organizations

(The Center Square) – The U.S. Supreme Court is expected to hear arguments in two California cases on the privacy rights of donors to nonprofit organizations.

Two nonprofit organizations, Americans for Prosperity and the Thomas More Society, in two separate cases, sued California Attorney General Xavier Becerra over a state rule mandating that they provide confidential donor information in order to be able to continue operating in the state. Upon appeal to the Supreme Court, the court announced in January it would hear their consolidated cases.

They are challenging a state mandate requiring tax-exempt 501(c)(3) charitable organizations to disclose the names and addresses of their donors, which they argue is unconstitutional and ignores Supreme Court precedent.

In 1958, the court held in NAACP v. Alabama that laws forcing organizations to disclose their donor information is nearly always unconstitutional. It held that donors have a First Amendment right to give money to organizations they agree with and the right to have their information kept confidential. Any law requiring donors’ information to be put a government list, the court held, would threaten donors from financially giving because of increased risk to violence, known as a “chilling effect.” In NAACP, the court ruled that a government could require donor information to be turned over, and risk the chilling effect, only when it has the most “compelling” reason to do so.

The Ninth Circuit Court of Appeals upheld Becerra’s demand, arguing the need for “efficiency” met the criteria of a “compelling reason” to force groups to turn over their donors’ private information.

The California mandate was first imposed by then-California Attorney General Kamala Harris. She decided that in order for all 115,000 nonprofit organizations to operate in California, they must include the names, addresses and employer information of their donors when filing annual financial reports with the state, “to ensure that these organizations were following state regulations.”

The Goldwater Institute argues the assertion was “odd,” since Harris could have easily gotten this information in another way that could better preserve donor privacy – “through an audit, for example, or a subpoena. But Harris and her successor, Xavier Becerra, insisted that it was more ‘efficient’ to demand the information this way.”

The Goldwater Institute and the Rio Grande Foundation filed an Amicus brief in support of the two plaintiffs.

Although both Harris and Becerra pledged to keep donor information confidential, and after organizations operating in California complied with the order, an investigation was launched and a federal judge found that Harris’s office posted nearly 2,000 confidential documents on a publicly accessible website.

“The Attorney General’s current approach to confidentiality,” the judge wrote, “obviously and profoundly risks disclosure” of personal information.

“That’s dangerous because posting people’s names, addresses, and employer identities on the internet runs the risk of making them targets for attack by people who disagree – sometimes violently – with the political positions of groups people donate to,” the Goldwater Institute argued.

During the campaign for Proposition 8 in California, which prohibited same-sex marriage, numerous donors to the “Yes Campaign” were victims of vandalism, boycotts, and physical violence because their home addresses were made public. One organization used the information to create maps of donors’ homes to encourage retaliation, the institute notes.

Likewise, the Amicus Brief argues that “efficiency” has never been considered as a “compelling” reason to justify violating privacy rights.

In New Mexico, the Rio Grande Foundation is facing a similar case on appeal. A federal trial court ruled that private information could be turned over to the government if it served the “informational interest” to educate voters about an election or public debate. A Santa Fe ordinance required the Rio Grande Foundation to give the city its private donor lists when the foundation announced its opposition to a citywide ballot initiative to impose a two-cent sales tax on soda.

Becerra, who is expected to step down as attorney general soon to become President Joe Biden’s secretary of health, argued another reason for nonprofits to disclose their donor information is “to prevent charitable fraud.”

A broad coalition of civil liberties groups and nonprofits have come together to support the plaintiffs, Reason Magazine notes.

They include the American Civil Liberties Union, the American Legislative Exchange Council, the Animal Legal Defense Fund, Cato Institute, the Council on American-Islamic Relations, Democracy 21, the Educational Fund, the Electronic Frontier Foundation, the Hispanic Leadership Fund, the Institute for Justice, the NAACP Legal Defense, the National Association of Manufacturers, the National Taxpayers Union, the Pacific Legal Foundation, the Philanthropy Roundtable, the Reason Foundation, the U.S. Chamber of Commerce, the Zionist Organization of America, and several gun rights groups.

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