SCOTUS to take up donor disclosure appealOn Jan. 8, the U.S. Supreme Court announced it would hear an appeal involving a California law requiring nonprofits to disclose their donors' identities to the state's attorney general. What's at issue, and how lower courts have ruled California law requires nonprofits to file copies of their IRS 990 forms with the state. Schedule B of this form includes the names and addresses of all individuals who donated more than $5,000 to the nonprofit in a given tax year. The California law requires nonprofits to give the state copies of their Schedule B forms. Although the law does not allow the public access to Schedule B information, court documents indicate inadvertent disclosures have occurred. In 2014, Americans for Prosperity Foundation (AFPF), a 501(c)(3) nonprofit, filed suit in U.S. district court, alleging the California law violated its First Amendment rights. In 2016, Judge Manuel Real of the U.S. District Court for the Central District of California found in favor of AFPF and barred the state from collecting the group's Schedule B information. Real was appointed to the court by Lyndon Johnson (D). In 2015, the Thomas More Law Center (TMLC), also a 501(c)(3) nonprofit, filed a similar suit in the same U.S. district court. In a separate 2016 ruling, Real also found in favor of TMLC and prevented the state from collecting the group's Schedule B information. The two suits were combined on appeal. A three-judge panel of the U.S. Court of Appeals for the Ninth Circuit unanimously overturned Real's rulings in 2018. Judges Raymond Fisher, Richard Paez, and Jacqueline Nguyen issued the ruling. Fisher and Paez are Bill Clinton (D) appointees. Barack Obama (D) appointed Nguyen. Writing for the court, Fisher said: It is clear that the disclosure requirement serves an important governmental interest. In Center for Competitive Politics, we recognized the [California] Attorney General's argument that 'there is a compelling law enforcement interest in the disclosure of the names of significant donors.' The Attorney General observed that 'such information is necessary to determine whether a charity is actually engaged in a charitable purpose, or is instead violating California law by engaging in self-dealing, improper loans, or other unfair business practices,' and we agreed[.] The plaintiffs petitioned the Ninth Circuit for en banc review. That petition was rejected March 29, 2019. On Aug. 26, 2019, the plaintiffs appealed to the Supreme Court. Reactions Emily Seidel, CEO of Americans for Prosperity Foundation, praised the court's decision to hear the case: Tens of thousands of Americans each year participate in AFPF’s educational programs, which inspire them to make a greater impact in their community and our country. Their rights — as well as the rights of every person who participates in organizations that seek to reform our justice system, protect the rights of our veterans, or make progress on other issues as diverse as Americans themselves — are at stake. The Court’s decision to hear the case signals the importance of these foundational civil liberties. Xavier Becerra (D), California's attorney general and Joe Biden's (D) nominee for secretary of health and human services, defended the law in question: California’s donor reporting rules simply require charities to provide the state, on a confidential basis, the same information about major donors that they already provide to the federal government. This information helps the state protect consumers from fraud and the misuse of their charitable contributions. We look forward to defending our rules before the Supreme Court. What comes next The Supreme Court has not yet scheduled oral arguments. The case name and docket number are Americans for Prosperity Foundation v. Becerra (19-251). The Big PictureNumber of relevant bills by state: We're currently tracking eight pieces of legislation dealing with donor disclosure. On the map below, a darker shade of green indicates a greater number of relevant bills. Click here for a complete list of all the bills we're tracking.
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