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Thursday, April 29, 2021

ANALYSIS/OPINION:

California’s donor disclosure requirement is now at the U.S. Supreme Court. It might not sound like some groundbreaking case, but it actually has major implications. In fact, the decision will affect the safety of donors across the country and around the world. There’s a lot at stake.

On Monday, the Supreme Court heard oral arguments in Americans for Prosperity v. Rodriquez, a consolidated case about donor disclosure requirements for charitable nonprofits. The justices were skeptical about California’s practices, leading legal experts to predict that the state will lose. A decision in favor of the petitioners will safeguard charitable giving and protect donors from harassment and intimidation. 


Charities that do business or hold property in California are required to file an annual report with the Attorney General’s Registry of Charitable Trusts. The charity’s Form 990 Schedule B, which is submitted to the IRS, must be included with the report. The Americans for Prosperity Foundation and Thomas More Law Center contend that they should not be required to submit this form because it includes sensitive information: the names and addresses of donors who give more than $5,000 a year or 2% of the organization’s total contributions.

The petitioners’ reluctance stems from a 2009 incident where 1,800 confidential Schedule B filings were mislabeled by the state, making them readily available with a simple Internet search. Officials vaguely promised enhanced security protocols, but as the petitioners rightfully pointed out, these assurances of confidentiality don’t hold water in light of past negligence. 

Doxxing can have severe consequences. Nonprofits that advocate for controversial and divisive causes have every right to solicit and receive donations. But their supporters, in the absence of privacy protections, may be harassed and thereby less likely to contribute. In today’s hyperpolarized political environment, affiliation with an unpopular idea or group can present physical, social and economic dangers. The petitioners refer to this as a “chilling effect” on free expression and association.

Nearly 300 groups of all political stripes support the petitioner’s argument on the basis of freedom of speech and association. Yet, even after they doxxed thousands of donors, Californian officials maintain that their policy is justified. Other states have followed suit.

Although the IRS has eased its Schedule B mandates, many states have sought to expand disclosure requirements. In my home state of New Jersey, a donor disclosure law was enacted but quickly struck down in federal court last year. 

California justifies its disclosure requirement as a transparency tool, a means to trace dark money and fraud. But charitable giving is not dangerous. There is no evidence that the petitioners misused donations. Furthermore, giving empowers people to support causes they believe in, particularly in the context of religion.

Disclosure disproportionately affects religious donors, since many religions strongly promote the idea of generosity and giving. Christianity espouses the concept of biblical stewardship and “tithing” — that is, giving 10% of profits to the church community. Historically, religious groups have received the largest share of charitable contributions, 31% of total U.S. donations in 2016. 

There are serious, even life-threatening, consequences when religious donors are doxxed. “Maintaining privacy is a matter of life and death,” says Kelly Shackelford, CEO and chief counsel of the First Liberty Institute. Ms. Shackelford represents Citizen Power Initiatives for China, an organization that promotes pro-democracy efforts and has had at least one of its donors jailed in China.

In countries like China, Iran and Sudan, faith can be just cause for imprisonment and execution — this has implications for American donors supporting religious humanitarian aid. In an amicus brief, ChinaAid highlighted the human rights implications associated with donor doxxing. The international Christian nonprofit warned that hackers in religious intolerant nations will inevitably exploit the porous registry and target charitable supporters, like China did with the organization’s founder, Bob Fu.

The disclosure requirement affects nearly 100,000 charitable nonprofits in the state, but the impact is far greater. California has already demonstrated its inability to maintain privacy and safety for thousands of donors. We don’t know how many data breaches have occurred in the past or how many people were adversely affected in the 2009 leak. We do know that, contrary to what officials say, California’s negligence wasn’t just a blunder. It was reckless and wholly unconstitutional. The justices will decide what happens next, but Americans should hope that the First Amendment is upheld, for the sake of California — and everywhere else.

• Rachel Chiu is a Young Voices contributor who writes about technology, employment and human rights. Follow her on Twitter: @rachelhchiu.


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