Supreme Court rejects California nonprofit donation disclosure law: NPR
The U.S. Supreme Court on Thursday sided with wealthy donors and their desire to remain anonymous against state law aimed at controlling the finances of charities and other nonprofits.
In an ideologically-lined 6-3 vote, the court struck down California’s law requiring nonprofits to file a list of their top donors with the state. Court said law subjects donors to potential harassment, cooling their rhetoric in violation of the First Amendment
Under California law, tax-exempt groups were required to attach to their state returns a copy of their IRS form showing the names and addresses of all donors who had given more than $ 5,000 or 2% of the total donations from the organization.
The case was brought by the Americans for Prosperity Foundation, a non-profit tax exempt founded by Charles Koch and his brother David Koch, who died in 2019, as well as the Thomas More Law Center, another conservative group.
In his opinion for the court’s Conservative majority, Chief Justice John Roberts said the court applied rigorous scrutiny, not strict scrutiny, in the analysis of the California measure.
“While careful scrutiny does not require that disclosure regimes are the least restrictive means of achieving their ends, it does require that they be closely tailored to the government’s stated interest,” he said. written.
Historically, state attorneys general have overseen charities, and in California, a state with 115,000 charities, it’s a big job.
Jan Masaoka, CEO of the California Association of Nonprofits, compares the California regime to the Federal Aviation Administration’s regulatory system. Just as the FAA needs information from aircraft manufacturers and airlines to keep air travel safe, California and other states need information from charities to root out fraud and fraud. personal transactions.
âAll of us, nonprofits and donors, want to be sure that the rules are enforced, and we need the [state] attorney general to do so, âMasaoka said.
“This fight is a skirmish in a larger war,” observes Sean Delaney, who has led enforcement of a similar law in New York State. Whether the New York Regime or similar provisions in other states can remain in place remains an open question now that the Supreme Court has struck down California law.
In her dissent, Justice Sotomayor wrote: âToday’s analysis marks the reporting and disclosure requirements with a target. Regulated entities wishing to evade their obligations may do so by leaning vaguely towards the âconfidentiality concernsâ of the First Amendment. … It does not matter if no individual is at risk of retaliation as a result of the disclosure, or whether the vast majority of those affected would comply. All of this is irrelevant to the court’s ruling that California’s Schedule B requirement is prima facie unconstitutional. precedent nor common sense support such a result. “
Even more significant could be the effect on federal and state laws that require public disclosure of the names of campaign contributors. In the political context, the Supreme Court has long held that such a disclosure is constitutional because it serves the important public interest of accountability by revealing who’s in the game to influence government policy. Indeed, public disclosure may be the only remaining control over political contributions, and some political contributors would like it to be removed as well. In fact, it would be the same for some members of the conservative wing of the Supreme Court.
At the same time, tax regulators would like supervisory rules to be tightened to prevent tax-exempt charities from being used for partisan purposes.
Thursday’s decision, however, could put the kibosh on that idea. In fact, the decision is likely to make any agency watchdog’s job much more difficult.