First Amendment

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

A broad coalition of groups is asking the Supreme Court to overturn the state's policy.

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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."

Even when such information was not publicly posted, it could be readily discovered, as AFPF showed by hiring a consultant to test the security of California's Registry of Charitable Trusts. "He was readily able to access every confidential document in the registry—more than 350,000 confidential documents—merely by changing a single digit at the end of the website's URL," Ikuta et al. noted. Even after the state was alerted to this vulnerability and supposedly fixed it, "the expert used the exact same method the week before trial to test the registry" and "was able to find 40 more Schedule Bs that should have been confidential."

Controversial organizations like Planned Parenthood and AFPF have good reason to worry about the consequences of the state's incompetence. "People publicly affiliated with the Foundation have often faced harassment, hostility, and violence," the 9th Circuit dissenters noted. "Supporters have received threatening messages and packages, had their addresses and children's school addresses posted online in an effort to intimidate them, and received death threats."

At a rally in Michigan, "several hundred protestors wielding knives and box cutters surrounded the Foundation's tent and sawed at the tent ropes until they were severed. Foundation supporters were caught under the tent when it collapsed, including elderly supporters who could not get out on their own. At least one supporter was punched by the protestors."

In addition to harassment and violence, AFPF supporters have faced economic reprisals. "After an article published by Mother Jones magazine in February 2013 revealed donor information," Ikuta et al. noted, "protesters called for boycotts of the businesses run by six individuals mentioned in the article. Similarly, Art Pope, who served on the Foundation's board of directors, suffered boycotts of his business."

These threats represent exactly the sort of fallout that the Supreme Court understood could have a chilling effect on the First Amendment rights of NAACP members. That is why the Court said disclosure requirements like Alabama's and California's should be subject to heightened scrutiny. In this case, California did not come close to showing that its blanket demand for Schedule B forms was substantially related to a compelling government interest, let alone that it was narrowly tailored.

California says it needs those forms to guard against fraud. But that contention is hard to reconcile with the fact that state officials let the disclosure requirement lie dormant for many years before they began demanding donor information. AFPF itself was allowed to register in California from 2001 to 2010 without submitting the forms that were notionally required.

"The state requires blanket Schedule B disclosure from every registered charity when few are ever investigated," Ikuta et al. noted. They suggested that the Attorney General's Office could instead "obtain an organization's Schedule B through a subpoena or a request in an audit letter once an investigation is underway without any harm to the government's interest in policing charitable fraud." Since "the state failed to provide any example of an investigation obscured by a charity's evasive activity after receipt of an audit letter or subpoena requesting a Schedule B," they said, it is hard to see why that much more narrowly tailored approach is inadequate to satisfy the government's interest in preventing charitable fraud.

In its Supreme Court brief, AFPF argues that the 9th Circuit panel "misread this Court's precedents as permitting compulsion of donor identities without the need for narrow tailoring." It warns that "upholding California's disclosure requirement would effectively abandon this Court's seminal precedents and let law enforcement prevail virtually every time in demanding donor information." The brief notes that preserving supporters' anonymity "protected the NAACP's members from intimidation by State officials in the Jim Crow South" and reassured "large donors to LGBTQ causes" who "feared the consequences" of being publicly identified.

The Thomas More Law Center, which joins AFPF in challenging California's policy, likewise argues that "all Americans should be free to support causes they believe in without fear of harassment." Yet "the California Attorney General's Office demands that all nonprofits fundraising in the State turn over major donors' names and addresses, then leaks that data like a sieve." In fact, "the Office admits it cannot ensure donor confidentiality, though technology makes it easier than ever to harass, threaten, and defame."

The challenge to California's disclosure requirement is supported by a strikingly wide range of organizations, including a long list of socially conservative groups and nonprofits of every description, ranging from the Animal Legal Defense Fund to the Zionist Organization of America. The supporters also include the American Civil Liberties Union, the Electronic Frontier Foundation, the Institute for Justice, the Cato Institute (joined by the Reason Foundation, which publishes this website), the Goldwater Institute, the Pacific Legal Foundation, the National Taxpayers Union, the American Legislative Exchange Council, several gun rights groups, Democracy 21, the Philanthropy Roundtable, the U.S. Chamber of Commerce, the National Association of Manufacturers, the NAACP Legal Defense and Educational Fund, the Hispanic Leadership Fund, and the Council on American-Islamic Relations.

This broad coalition, representing all sorts of causes and political preferences, is powerful evidence of the constitutional interests at stake in this case. At a time of bitter partisan differences and seemingly unbridgeable cultural divisions, people on different sides of many issues can at least see eye to eye on the necessity of preventing the government from arming their opponents with confidential information that can be used to punish Americans for exercising their First Amendment rights.

"This is not the time or the climate to weaken First Amendment rights to anonymity," AFPF says. "Social and political discord have reached a nationwide fever. Perceived ideological opponents are hunted, vilified, and targeted in ways that were unthinkable before the dawn of the Internet. As partisan pendulums swing back and forth in governmental offices, and as online campaigns rage against perceived ideological foes, donors to causes spanning the spectrum predictably fear that exposure of their identities will trigger harassment and retaliation far surpassing anything reasonable people would choose to bear. Vindicating freedom of association in this context will therefore mean the difference between preserving a robust culture and practice of private association and charitable giving, versus opening the door to chilling governmental intrusion."

NEXT: The 'COVID Relief Bill' Is Mostly an Expensive Bundle of Politically Motivated Giveaways

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  1. “We demand a list of the Jews IN THIS TOWN!”

    1. In HOLLYWOOD????

      1. It might be faster to read the list of people who aren’t.

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    2. Notice one of the black men in the article picture is wearing a hitler mustache.

      NAACP is still around but Black Americans are not to be called “colored” anymore.

      Thank god for civil war 2.0 which will deport all the commies and end the PC nonsense.

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  2. Destroying freedom of association is exactly what the state is trying to do. They don’t like any sort of freedom all that much.

  3. Just leave California. If you have nothing to hide, you have nothing to fear. Those are mostly peaceful protesters that will destroy you.
    You don’t see you elected Washington DC legislators hiding behind razor wire and politically vetted troops do you?

    1. I hear those politically-vetted troops eat nails for breakfast.

    2. Democrats learned a long time ago that constitutional protections for states must be destroyed.

  4. Stop giving to charity (other than Reason of course). Why? Because your time and effort is far better spent advocating directly (if anonymously) on social media. If you believe in a charity, give freely of your time. Learn about what they really do and how they do it. If they ask for cash – run!

    1. First you attack others for not doing your work then you attack charity while supporting social media and their censorship.

      No wonder you keep losing.

      1. It’s Buttplug concern trolling. He’s trying to be a lefty version of OBL.

      2. It’s all our work, and I oppose censorship. (Speaking of which – thank you Reason for not banning me again today.)

        What did I lose? What else would you like to get wrong?

  5. So… who’s the bigger threat to freedom of speech again?

    1. Laryngitits?

    2. Muppets

    3. Winnie the Pooh

    4. Republicans because they only oppose spending at the cost of S230 free speech protections.

  6. “At a time of bitter partisan differences and seemingly unbridgeable cultural divisions, people on different sides of many issues can at least see eye to eye on the necessity of preventing the government from arming their opponents with confidential information that can be used to punish Americans for exercising their First Amendment rights.”

    When one side of the partisan divide largely controls the government, and can use the force of government to repress and eliminate their political adversaries, why would you ever expect restraint?

    This is a complete pipe dream.

    Once a society is at a point where the elimination of political rivals is an express and widely accepted policy objective, restraint is a non-starter. We are in a spiral of collapse and we are not going to get out of it without a serious civil conflict.

  7. Interesting to see a black man sporting the toothbrush, a.k.a. Hitler, ‘stache.

  8. Benzinga
    How GDP Growth Under Trump Compares To Clinton, Obama And Other Presidents

    Here’s a look at annual U.S. GDP growth during Trump’s presidency. The 2020 estimate comes from the Federal Reserve:

    2017: +2.3%

    2018: +3%

    2019: +2.2%

    2020: -3.7%

    Related Link: Historically, Stocks Perform Better When Sitting President Is Reelected

    How Trump Compares: Overall, U.S. GDP growth has averaged about 0.95% during Trump’s first term in office. Here’s a look at how that GDP growth stacks up to his predecessor, President Barack Obama:

    2009: -2.5%

    2010: +2.6%

    2011: +1.6%

    2012: +2.2%

    2013: +1.8%

    2014: +2.5%

    2015: +3.1%

    2016: +1.7%

    In his eight years in office, U.S. GDP growth averaged 1.62% under Obama, about 70% higher than Trump’s growth rate.

    Here’s a look at average GDP growth rates under the last six U.S. presidents:

    Jimmy Carter (D): 3.25%

    Ronald Reagan (R): 3.48%

    George H.W. Bush (R): 2.25%

    Bill Clinton (D): 3.88%

    George W. Bush (R): 2.2%

    Barack Obama (D): 1.62%

    Donald Trump (R): 0.95%

    In his first four years in office, Trump has had by far the lowest average U.S. GDP growth rate of any of the last seven U.S. presidents.

    https://www.yahoo.com/now/gdp-growth-under-trump-compares-121008953.html

    No comment

    1. Remember. Trump caused the global pandemic according to a random sampling of pedophiles.

      Ignore the root cause. Bathe in ignorance. The pedo way.

      https://fee.org/articles/study-lockdowns-had-largest-impact-in-destroying-economic-activity/

      1. Look, moron, the 2020 flu has been mild compared to the 2008 financial collapse. US net wealth fell $24 trillion in 2008-09. There are no asterisks in the stats even though 2020 got trillions in deficit spending stimulus.

        1. And the primary contributor to the 2008 crisis was serial bubble blower Alan Greenspan.

          The only president that really contributed to it was Clinton, by encouraging and signing the repeal of Glass-Steagall. Wouldn’t wanna put any restrictions on the big banks. Lol.

          1. Glass Steagall was meaningless by the 1990s.

            1. Glass Steagall might have kept the banks from spreading those worthless derivative securities to unsophisticated investors all over the globe.

        2. Lol. The moron is lashing put because he doesn’t understand basic economics. Lol. What happened to your insurrection today?

          1. Only postponed till we-don’t-know-when. Therefore the fences and troops need to stay until the political winds shift.

          2. The left keeps warning us about insUrrEction but the right keeps refusing to cooperate.
            It’s all very frustrating for Buttplug and CNN.

      2. Of note, Obama has a relatively unexplainable -2.9% growth rate in his first year (Were the World Trade Centers blown up? No. Did half-a-million Americans die ‘of COVID’? No.) and, if you take out his 2020 number, he averaged 2.5% growth which puts him in fourth ahead of both Bushes and Obama.

        1. The 2008 financial collapse was probably the most notable economic event since the Great Depression.

          Net wealth fell for the only time since the 30s

          https://fred.stlouisfed.org/series/BOGZ1FL192090005Q

          1. So Obama WAS worse than Trump.

    2. Holy shit buttplug, your post has absolutely nothing to do with the subject here. Your obsession is beginning to overwhelm you where you can’t talk about anything else. Trump is gone. Get help. Seriously.

      1. Okay, I’ll repost it in the morning links. Thanks for the advice.

        1. dont get banned again

        2. So you can prove you’re ignorant about both the government and how bills are passed? Or understand who issued lockdown orders?

          I mean, it is fine. We all know your only knowledgeable subject is child porn.

      2. The pedo claims he isnt a demlcrat shill though. Lol.

    3. What happened to that brigade of mechanized infantry that was supposed to storm the capitol?

    4. So you’ve proven that after Democrats ruin the economics of the US, voters finally wise up and put Republicans in office to fix those mistakes. Since those mistakes are vast and deep, it takes time and usually doesn’t directly effect GDP immediately. By the time it starts working, voters get conned by liberal media to vote for Democrats again who live under Republican economics while doing their best to destroy them.

      Idiot.

  9. “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.”

    Who was elected Attorney General of California in 2010?

    1. The next Biden cabinet pick who will not have a successful appointment.

  10. It’s almost as if our elected officials, all of whom have sworn to uphold the constitution, are instead roving the land looking for more creative ways to shit on it.

    Get rid of these power crazed chuckleheads.

    1. I was called to jury duty in California and jury selection was today. We were asked a question by the DA about our willingness to vote guilty in any instance in which we determined guilt beyond a reasonable doubt. Due to how the voir dire had been going this was not a throw-away question. It was relevant to the case. I raised my hand and said it would depend on whether I thought the relevant law was constitutional. When the DA asked what I would do if the judge instructed us to follow the law, even if we felt it was unconstitutional, I said I would not follow the instructions. The judge didn’t look happy. Needless to say I was dismissed.

    2. Preaching to the choir, Bevis. How do you propose we do it, given voting doesn’t seem to work anymore?

  11. Tax-exempt money should be publicly disclosed money.

    1. You, sir are cattle.
      Livestock. Go enjoy your barn

  12. If donors were required to disclose their donations, everybody would know Mark Zuckerberg donated 350 million dollars to support election efforts in heavily Democrat districts.

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  14. HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

    What does Chuckie Koch have to hide?

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