Do you donate to the National Rifle Association, the Sierra Club, or your local art museum? If so, you may soon be required to report your name, address, and contribution amounts to the government.
Couched as “transparency” measures, a wave of regulatory action, legislative proposals, and ballot measures are aimed at eliminating, or significantly curtailing, private charitable giving.
The first line of attack on donor privacy has come from partisan regulators. Attorneys General in both New York and California have been notifying nonprofit organizations that they must disclose private tax information, called an IRS Schedule B, to the state. If charities refuse, they will lose their ability to solicit new members in those states.
Late last year, the organization for which I work, the Goldwater Institute, fell within this dragnet, when California Attorney General Kamala Harris demanded that our nonprofit turn over a copy of our Schedule B form that includes “the names and addresses of [Goldwater] contributors.” Although this information is protected from disclosure under both federal tax law and the First Amendment, Ms. Harris has persisted in her demands. New York has done the same thing.
These regulatory actions are part of a broader national effort to force donors to private nonprofit organizations to turn over their sensitive, private information to the government in order for those groups to engage in either charitable solicitations or political dialogue. Legislative proposals and ballot measures in dozens of states are placing similar requirements on nonprofit groups.
This is disturbing for a number of reasons.
First, private giving is a fundamental part of charitable activity. Donors may wish to maintain their privacy for any number of reasons, ranging from selfless modesty to family arrangements to a desire to not receive additional solicitations. Donor disclosure mandates curtail these acts of selflessness.
Second, throughout history, in political discussion, literature, the arts, and news reporting, among many other fields, privacy has been essential for unfettered dialogue.
Take, for example, journalists. Reporters use anonymous sources all the time. The identity of “Deep Throat”—the source of much information regarding the Watergate scandal—for instance, wasn't exposed until 2005, 30 years after President Nixon’s resignation. Editorials are not penned under specific names. Many commentary pieces are submitted under pseudonyms.
Imagine the outrage, however, if a new law prohibited anonymous bylines on newspaper editorials or required the disclosure of the name and address of every subscriber to a for profit media company. The outrage would be swift and severe—and rightly so. Yet newspapers engage in political dialogue all the time. They even endorse candidates, often with significant influence on the electorate. No doubt the press should enjoy freedom from government coercion. But so should nonprofit groups and their donors.
Third, for nonprofits that engage in issue advocacy on political matters, private giving prevents retaliation against speakers by those who disagree, particularly when speaking truth to power. From the Civil Rights era to today’s most contentious political debates, political actors throughout history have sought the identities of those with whom they disagree in order to threaten, harass, and intimidate them into silence. As the U.S. Supreme Court observed in striking down a law that prohibited anonymous leafleting, “Persecuted groups and sects from time to time throughout history have been able to criticize oppressive practices and laws either anonymously or not at all.”
Donor disclosure advocates often advance transparency in politics as the reason for their mandates. But some donor disclosure demands, such as those made by the New York and California Attorneys General, are particularly astounding because they extend to groups that are forbidden by law from engaging in electoral politics.
These mandates extend to entities organized under 501(c)(3) of the federal tax code. Many of these nonprofits can, and do, engage in dialogue about some of our nation’s most pressing policy issues, but they cannot participate in candidate campaigns.
There are nearly one million 501(c)(3) private charities. Such nonprofits include schools, churches, hospitals, art centers, public radio stations, research and education foundations, legal aid clinics, soup kitchens among many others. Nonprofit organizations that engage in issue advocacy range ideologically from the Cato Institute to the Center for American Progress.
To demand donor information in the name of encouraging transparency in politics from groups that are prohibited from engaging in electoral political activity is, therefore, unavailing.
Every American has the right to support the causes she believes in without the fear of harassment and retaliation. Disclosure mandates undermine this basic freedom, dry up donations to charities, and silence political speech.
What do donor disclosure demands mean in practice? A donation to the NRA or Greenpeace is reported to the government. Member dues to the ACLU or the Chamber of Commerce are no longer private and may be disclosed to the public. Under these proposals, how many donations would be withheld? How much speech would be silenced?