July 1, 2021
The Supreme Court batted down a California policy that required nonprofits to disclose the names and addresses of big donors.
In a consolidated action, Americans for Prosperity Foundation, a nonprofit group linked to the conservative billionaire Charles Koch, and the Thomas More Law Center, a conservative public-interest law firm, brought the challenge to California’s disclosure policy.
The policy required nonprofits who raise money in California to disclose their Schedule B information from their IRS 990 Forms, which reveal the names and addresses of top donors. Although California promised to keep the information confidential, the state has already leaked (allegedly without intent) thousands of Schedule B forms since the state Attorney General first attempted to enforce the requirement in 2010.
The conservative groups argued California’s policy was unconstitutional under the First Amendment because it will discourage donors from contributing due to the fear that their names and addresses will be publicly disclosed.
Since 2014, the America’s for Prosperity has been locked in a legal battle with the California Justice Department – which was led by then-Attorney General Kamala Harris when the case was first brought.
A federal judge ruled in 2016 that AFPF donors can remain anonymous, but the San Francisco-based Ninth Circuit reversed in 2018, finding the nonprofit must reveal the names of its largest donors to the California attorney general. That decision prompted the appeal to the Supreme Court.
Citing California’s history of failing to keep personal information secure, the U.S. Supreme Court o overturned the state’s nonprofit donor disclosure policy, finding it violated the First Amendment to the United States constitution.
Writing to the majority, Chief Justice Roberts wrote that California’s policy “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.”
“We are left to conclude that the Attorney General’s disclosure requirement imposes a widespread burden on donors’ associational rights. And this burden cannot be justified on the ground that the regime is narrowly tailored to investigating charitable wrongdoing, or that the State’s interest in administrative convenience is sufficiently important. We therefore hold that the up-front collection of Schedule Bs is facially unconstitutional, because it fails exacting scrutiny in “a substantial number of its applications . . . judged in relation to [its] plainly legitimate sweep.'” Roberts wrote.
Read the opinion: