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July 1, 2021 — In its final decision of the term, the Supreme Court determined in a 6-3 vote that nonprofits are not required to submit their Form 990-Schedule B list of donor names and addresses to the State of California.  Chief Justice Roberts wrote the majority opinion.  The full text of the decision is available here.

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The Timeline | Donor Privacy & Schedule B Reporting

2016-2020
A number of affected nonprofits individually sued the state of California over its compelled disclosure of otherwise private donor information. The state was requiring nonprofits to share the information from Schedule B of their Federal Tax Return Form 990 with the state Attorney General.

Note: Prior to this Supreme Court decision, three states – CA, NJ, NY – had mandated filing the Schedule B as a solicitation law registration requirement. 

In two instances, affected nonprofits challenged California in federal district court and were rewarded with injunctions barring the collection of the donor information.  A federal appeals court overturned the lower court rulings leading the nonprofits to petition the U.S. Supreme Court for review. 

January 2021
The Court granted certiorari — meaning it agreed to hear the cases — addressing the issue of mandatory disclosure of donor information to state officials. Those cases were consolidated for briefing and oral argument.

February 2021
The Nonprofit Alliance Foundation (TNPAF), the 501(c)3 supporting organization of TNPA), submitted an amicus brief to the Court supporting the need to maintain donors’ privacy, and opposing the mandatory disclosure of donor information to state officials. The goal of this amicus brief was to present the fundraising perspective of the nonprofit community to the U.S. Supreme Court.

TNPAF reached out to colleague and member organizations to educate them about what was at stake, the history of donor harassment of those supporting particular causes, and the First Amendment.

March 1, 2021
The amicus brief was officially filed with the U.S. Supreme Court with 126 nonprofit organizations signing on.

April 26, 2021
Oral arguments were presented to the U.S. Supreme Court.  Proceedings were livestreamed and recorded and can be viewed here.

July 1, 2021
In its final decision of the term, the Supreme Court determined in a 6-3 vote that nonprofits are not required to submit their unredacted Schedule B list of donor names and addresses to the State of California.  Chief Justice Roberts wrote the majority opinion. The full text of the decision is available here.

Important Nonprofit Context

* Charities are fundamental to American civic life and are stronger in America than in most nations.

* Giving by individuals was an estimated $309.66 billion in 2019 and amounted to approximately 70% of total giving (Giving USA 2020). Preliminary measures suggest a significant increase in numbers of donors and dollars contributed for 2020. Donor privacy is essential for the fundraising success of these charities.

* These funds support an enormous range of voluntary activities from providing health care, shelter, and food to providing public and private education at all levels (this selection of activities is a placeholder only).

* Charities, organizations that rate charities for best practices, and fundraising professionals have developed best practices and rules over decades providing for donor privacy and its protection.

* If donor privacy is violated, this would cause irreparable harm to fundraising and to the nation’s charitable sector.

* California demonstrably failed to protect the confidential Schedule B information in its custody. Since California adopted this practice, two other states have followed. Doubtless more will follow suit. More states gathering such data dramatically increases the risks of a loss of privacy. With hacks of even national security and high-level corporate data becoming increasingly common, how can we expect regulators’ data and websites to remain secure?

* Many individual donors are not comfortable with their personal information being provided by charities to state officials. Regardless of whether they live in the state, they do not trust state officials to keep the information secure or to refrain from misusing it.

* The threat of misuse looms larger when one considers the states have no routine need for information on individual donors in order to enforce their solicitation laws. In preliminary filings in the present case, twelve states with solicitation laws agreed there is no routine need. Should a state find need in the case of an individual organization, the state can seek a subpoena for the donor information (giving both organization and donor an opportunity to resist). A reasonable person might ask, “If they don’t need the information to enforce solicitation laws, why do they want it?”

Outline | Amicus Brief

Read the full text here.

I. An industry perspective on the charitable sector and donor privacy

A. Charitable solicitation and the building of a donor file are critical to the survival of our nation’s nonprofit organizations and the success of their charitable, educational, or religious programs.

B. Charitable solicitation is fully protected speech under the First Amendment.

C. Charitable speech is highly regulated under the many states’ schemes of prior restraint with significant filing burdens and costs.

D. California’s compelled disclosure of confidential donor information is a step too far, violating the First Amendment rights of all charity registrants and their major donors.

II. This Court’s precedents require strict scrutiny to analyze California’s compelled disclosure of its major donors as a precondition to engaging in protected speech.

A. The Ninth Circuit erred in applying the wrong level of scrutiny to protected speech and association.

B. Both the NAACP line of cases and the Riley line of cases in the charitable speech and association contexts require strict scrutiny in this case.

III. California’s compelled disclosure requirement fails strict scrutiny and is overly broad in its application to all charities; therefore, it is facially unconstitutional.

A. The disclosure requirement is overly broad such that in all its applications the statute creates an unnecessary risk of chilling free speech.

B. The compelled disclosure of charities’ confidential donor information fails strict scrutiny and is facially overbroad because it risks the suppression of ideas and association in all possible applications.

C. California’s compelled disclosure of major donors conflicts with industry best practices and a longstanding regulatory framework that protects donor privacy.

1. Charities, organizations that rate charities, and fundraising professionals have established best practices and rules providing for donor privacy and its protection.

2. Federal tax laws protects donor information from disclosure to the public and to the states.

3. States have successfully registered charities to solicit charitable contributions for decades without the need for donor disclosure.

IV. Effects on Industry

A. California demonstrably failed to protect the confidential donor information in its custody.

B. The threat of misuse looms larger when one considers the states have no routine need for information on individual donors in order to enforce their charitable solicitation laws.

C. Since California adopted this practice, two other states have followed; and doubtless more will follow suit, even though there is no need for such information.