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California's Requirement That Nonprofits Disclose Donor Information Poses a Grave Threat to Freedom of Association

Added 03-04-21 04:21:02pm EST - “A broad coalition of groups is asking the Supreme Court to overturn the state's policy.” - Reason.com


Posted By TheNewsCommenter: From Reason.com: “California's Requirement That Nonprofits Disclose Donor Information Poses a Grave Threat to Freedom of Association”. Below is an excerpt from the article.

Sixty-three years ago, in a case challenging Alabama's requirement that the National Association for the Advancement of Colored People (NAACP) disclose its membership lists, the Supreme Court recognized that such demands can pose a grave threat to freedom of association. In that case and subsequent decisions, the Court established a test for compelled disclosure of organizational information that may result in "reprisals against and hostility to the members": The requirement must be "substantially related" to a "compelling" government interest, and it must be "narrowly tailored" to serve that interest.

As a federal judge recognized in 2016, California's requirement that all nonprofit organizations disclose information about their donors plainly fails that test. But two years later, a panel of the U.S. Court of Appeals for the 9th Circuit reversed that decision, concluding that California's policy passed constitutional muster based on a weaker standard that usually applies only in the context of campaign finance regulation. In Americans for Prosperity Foundation v. Becerra, which the Supreme Court will hear later this term, two conservative organizations are asking the justices to overturn the 9th Circuit's decision. They are joined by a remarkably wide range of groups from across the political spectrum, reflecting the significance of the First Amendment threat posed by California's nosiness.

California has long required that charitable organizations registered in the state submit federal tax forms revealing the names and addresses of supporters who have donated more than $5,000. But it did not start aggressively enforcing that requirement until 2010, when the California Attorney General's Office began demanding donor information as a condition of registration. The Americans for Prosperity Foundation (AFPF) objected to that demand, leading to years of litigation that culminated in this Supreme Court case.

The information collected by California, which is listed on an IRS form known as Schedule B, is supposed to be confidential. But in practice, it is not.

As Sandra Segal Ikuta and four other 9th Circuit judges noted in 2018, when they dissented from the appeals court's refusal to rehear the case, the trial evidence "provided overwhelming support" for AFPF's fear that donor data would be publicly revealed, exposing the organization's supporters to harassment for their political views. "State employees were shown to have an established history of disclosing confidential information inadvertently, usually by incorrectly uploading confidential documents to the state website such that they were publicly posted," the dissenting judges said. "Such mistakes resulted in the public posting of around 1,800 confidential Schedule Bs, left clickable for anyone who stumbled upon them." In 2012, for example, "Planned Parenthood become aware that a complete Schedule B for Planned Parenthood Affiliates of California, Inc., for the 2009 fiscal year was publicly posted; the document included the names and addresses of hundreds of donors."


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