Supreme Court rules for conservative charities in challenge to donor disclosure
keep their largest donors anonymous.
Chief Justice John Roberts wrote the opinion for a 6-3 majority. Associate Justice Sonia Sotomayor wrote a dissent joined by the court’s liberal wing.
“The upshot is that California casts a dragnet for sensitive donor information from tens of thousands of charities each year, even though that information will become relevant in only a small number of cases involving filed complaints,” Roberts wrote.
California requires nonprofits to disclose their largest donors to state regulators. Two conservative groups, the Americans for Prosperity Foundation and the Thomas More Law Center, sued and asserted the mandate violates their donors’ First Amendment right “peaceably to assemble.”
The groups told the court that donors, fearing retribution, might be hesitant to give if their identities were revealed.
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The charities told the court about a rash of incidents they said demonstrated their donors’ safety would be jeopardized by the disclosure. During a 2012 rally in Michigan, for instance, protesters tore down an Americans for Prosperity event tent, trapping several elderly attendees inside, the group said. Others affiliated with the charities have received death threats, the charities said.
Republican megadonor Charles Koch, the suit drew support from progressive and conservative charities who said people should be able to give to causes without being identified. California countered that the need to investigate groups that receive tax benefits outweighs those privacy concerns.
The case turned in part on a landmark 1958 civil rights decision in which the Supreme Court struck down a request by Alabama that the NAACP reveal its membership – a decision that required the state to show its need for information outweighed the potentially chilling effect on associating with the civil rights group that was protected by the First Amendment.
Opponents of the suit scoffed at comparing the potential backlash against large donors with what African Americans endured in the Jim Crow South in the 1950s.
In subsequent Supreme Court cases, the justices ruled that governments must show a “substantial relation” between the information they seek and an “overriding and compelling state interest.” But the charities want the court to embrace a higher standard for disclosure requirements: If a state is going to abridge the freedom of association, they said, then the requirement should be “narrowly tailored” to accomplish the state’s goal.
That means the government would have to demonstrate its regulation functions as narrowly as possible to achieve its interest – a more difficult threshold to meet.
Most charities – including the groups involved in the case – are already required to disclose their donors to the Internal Revenue Service for federal tax purposes. California says the information it seeks is used for investigations and is not released to the public.
But the groups noted past slip-ups that inadvertently made donors’ names public. And they challenged the state’s need for the information in the first place: If California opens an investigation into their fundraising, they said, it can subpoena the donor list at that time rather than demanding the information preemptively.
A federal district court in California sided with the groups in 2016 but the San Francisco-based U.S. Court of Appeals for the 9th Circuit reversed the lower court’s decision, finding that the charities never demonstrated that a would-be donor decided against giving money because of their potential outing. Without a concrete incident of harm, the appeals court ruled, the case collapses.
During oral arguments in April, Associate Justice Stephen Breyer raised a concern echoed by good government groups who feared the decision would have broader implications for political campaigns. Why, Breyer asked, isn’t the California case a “stalking horse” for campaign disclosure laws, which also require donor disclosure?
“Can we distinguish campaign finance laws, where the interest is even stronger in people being able to give anonymously?” Breyer asked in April.
Attorneys for the charities responded that California’s interest in having donor lists was less compelling than the public having insight into who is contributing to a campaign. The groups also noted that campaign finance disclosures are required by a federal statute but that the California requirement is an agency-approved regulation.