State’s donor disclosure requirements still controversial among nonprofits

As the U.S. Supreme Court agreed to hear arguments in a case brought forward by two conservative nonprofits challenging donor disclosure requirements in California, some nonprofits are pushing back on new nonprofit donor disclosure requirements in New York.

Gov. Andrew Cuomo initially proposed publicly disclosing the donors of nonprofits and tax-exempt political advocacy organizations early last year, but his administration pulled back on those plans.The state instead created a new requirement that certain nonprofits file annual financial disclosure reports through the Department of State in addition to the attorney general’s office. The agency has been given authority to examine the relationship between charities and political advocacy organizations filed as 501(c)(4) groups that share staff, office space and supplies.

But some nonprofits remain concerned that donor confidentiality isn’t ensured under the new rules and have objected to creating a redundant filing requirement. Several groups have backed legislation introduced by Assembly Member Amy Paulin, which would remove the requirement that this information be sent to the Department of State and ensure information about charities’ donors remains confidential. 

Meanwhile, the case before the Supreme Court specifically focuses on California’s requirements that most charities submit tax forms disclosing their major donors to the state attorney general’s office. The Americans for Prosperity Foundation and Thomas More Law Center have argued that the requirement violates the First Amendment and could hurt giving to organizations. A federal appeals court sided with the state, which argued that the provided information is important to ensure nonprofits aren’t engaging in fraud and is not allowed to be publicized.