U.S. Supreme Court Amicus Brief: Background
The Amici Brief with 126 signers has been filed with the U.S. Supreme Court for the March 1 deadline. Thank you to everyone who did the work to get your nonprofit signed on!
The list of signers includes AHC Inc., American Leadership Forum – Great Valley Chapter, America’s Promise Alliance, Amyloidosis Foundation, Animal Legal Defense Fund, Animal Welfare League of Arlington, Association of Fundraising Professionals (AFP) – NYC Chapter, AFP – Westchester NY, AFP – NW Ohio Chapter, AFP – Hampton VA Chapter Association of the Miraculous Medal, Aura Home Women Vets, Avenidas Bashor Children’s Home, Best Friends Animal Society, Bethesda Lutheran Communities Inc., Brothers of the Christian Schools – Dist. of Eastern North America, Busted Halo, Catholic Charities of La Crosse, Catholic Medical Mission Board Central Florida Council, BSA, Central West Ballet, Charity Navigator, Chesapeake Bay Foundation, Children to Love International, Children’s Museum of Evansville, Christian Appalachian Project, Chronic Disease Fund, Community Foundation of South Lake County Inc., Concordia University – Nebraska, Concordia University – St. Paul, Congregation of the Mission – Western Province, Congregation of the Sacred Hearts – US Province, Connecticut Humane Society, Council for Advancement and Support of Education (CASE), Defenders of Wildlife, Disabled American Veterans, Divine Word College, Doctors Without Borders/Medecins Sans Frontieres, Early Learning Focus, Edmundite Missions, Empower Hope, Farm Sanctuary, Feeding America – Eastern Wisconsin, Food for the Poor, Franciscan Sisters OLPH, Fuller Center for Housing of Greater New York City, Global Outreach International, Global Wildlife Conservation, Good Days, Heritage University, Historic Districts Council, Humane Society of Charlotte, Humane Society of Utah, Immaculate Heart Retreat Center, Inprint, Institute for Community Living, Institute of the Blessed Virgin Mary – US Province, International Rescue Committee, International Society for Animal Rights, Kappa Alpha Educational Foundation, KUAC Friends Group – NPR, Legionaries of Christ, Loaves & Fishes, Inc., Lowville Food Pantry, Inc., Marketing EDGE, Mercy For Animals, Messianic Vision, Inc., Miracle Flights, Missionary Sisters of the Most Sacred Heart of Jesus, Montgomery County Family YMCA, NARAL Pro-Choice North Carolina, National Cancer Assistance Foundation, National Tuberous Sclerosis Association, Inc., National Wildlife Federation, Nonprofit Connect, Nonprofit Financial Sustainability Foundation, Nonprofit Leadership Alliance, Operation Food Search, Ourganda, Pacific Crest Trail Association, Paralyzed Veterans of America, Pathfinder International, PBS Reno, PETA Foundation, Pi Kappa Alpha Foundation, Pioneers – USA, Potomac Conservancy, Rising Ground, Inc., Salesian Missions, Sigma Nu Educational Foundation, Society of the Divine Word – Chicago Province, Society of the Little Flower, Southern Poverty Law Center, Southfield School, Southwest Chicago Christian School Association, St. Benedict’s Prep, St. Labre Indian School, Students for Live of America, Support Our Aging Religious (SOAR!), Switch 4 Good, Syria Shriners, The Animal Defense Partnership, The Good Food Institute, Inc., The Haven of Transylvania County, The Marist Brothers, The National Children’s Cancer Society, The Nature Conservancy, The Nonprofit Alliance, The Workers Circle, Tri Delta Foundation, Trinity Missions, United States Catholic Mission Association, University of Illinois, UrbanPromise Wilmington, Virginia Museum of Natural History Foundation, Western Tidewater Free Clinic, Inc., Winona Community Foundation, Wisconsin Right to Life, Women’s Sports Foundation, YMCA of Rock River Valley, Zeta Psi Educational Foundation, and Zionist Organization of America.
Background: DONOR PRIVACY and Sched B
Five or so years ago, a number of affected nonprofits individually sued the state of California over its compelled disclosure of otherwise private donor information (that which appears on Schedule B of Form 990). A federal appellate court ruled against them. Three appealed to the U.S. Supreme Court.
The second week of January, the U.S. Supreme Court granted certiorari to two of them (meaning it has agreed to hear the cases) addressing the issue of mandatory disclosure of donor information to state officials. Those cases have been consolidated for briefing and oral argument.
So far, three states (CA, NJ, NY) have mandated filing the Schedule B as a solicitation law registration requirement. More states, perhaps many more, can be expected to follow suit.
Schedule B requires listing sensitive information, including name, address, and gift amounts for all donors giving $5,000 or more in the reporting year. NOTE: organizations with substantial income may only have to report those donors who make gifts equal to or greater than 2% of contributed income (Line 1(h) of Part VIII, Form 990).
The Nonprofit Alliance is filing 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 is to present the fundraising perspective of the nonprofit community to the U.S. Supreme Court.
The more individual nonprofits sign onto the brief, the stronger the brief and the more likely to get the attention of the Court.
Outline of the Amicus Brief
(see 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.
- Charities, organizations that rate charities, and fundraising professionals have established best practices and rules providing for donor privacy and its protection.
- Federal tax laws protects donor information from disclosure to the public and to the states.
- 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.
Key Points to make in this case
While the full draft of the amicus brief is above, below is an outline of key points used in the drafting:
* 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?”
Watch the Virtual Town Hall (60 minutes) from Feb 11, 2021, with the lawyers discussing the case and the amicus brief.
Or reach out to…
General Counsel, The Nonprofit Alliance
Important terms defined:
An amicus curiae brief is a persuasive legal document filed by a person or entity in a case, usually while the case is on appeal, in which it is not a party to the litigation but has an interest in the outcome, since the outcome decision typically establishes the rule of law.
Amicus briefs serve multiple purposes, including to address policy issues; provide a more sympathetic advocate; supplement or bolster a litigant’s case; provide historical perspective or technical assistance; endorse a party to the case; or seek to mitigate or expand the effects of a potentially important prior court opinion.
Schedule B is a Federal Tax Form (part of a nonprofit organization’s annual tax return filing 990) that requires listing sensitive information, including name, address, and amount of gifts for all donors giving $5,000 or more in the reporting year.