Donors to charitable organizations have a reasonable expectation that their contributions won’t result in protesters marching at their place of business, vandalizing their property, and/or demanding they be fired. The State of California says it has an important interest in making sure that such organizations are indeed formed for legitimate purposes and must see who the major donors are as part of that oversight.
But the state government of California has a poor track record of keeping those donor lists private, and a couple charities have questioned whether the state really needs those lists. Lawsuits seeking to protect the donors of two such organizations, the Thomas More Law Center and Americans for Prosperity, have reached the U.S Supreme Court, which has agreed to hear the cases.
The dispute centers around the federal tax form known as “Schedule B” attached to a charitable organizations informational tax return, called a “Form 990.” While the IRS requires a list of major donors be included in Schedule B for federal purposes, that schedule must remain undisclosed, while the rest of the Form 990 is available to the public.
California has long required charities soliciting in the state to file their Form 990s with the Attorney General, but no law or regulation has ever required that Schedule B also be filed. But in 2010, then-Attorney General Kamala Harris’ office began informally requiring them. The practice was continued under Attorney General Xavier Becerra, currently President-elect Joe Biden’s pick for Secretary of Health and Human Services.
When the Attorney General’s office began threatening to deny the ability of the two organizations to solicit donations in California if they didn’t furnish their Schedule B’s, the two organizations sued.
The U.S. federal district heard the cases first, and held in favor of the charities, finding that the Attorney General’s office had a history of disclosing those donor lists, and that harassment of donors by third parties was a foreseeable result.
On appeal to the 9th U.S. Circuit Court of Appeals, the lower court decisions were reversed. The Supreme Court has consolidated the two cases into one for oral argument, which will be set for some time this spring. A final decision can be expected before the Court adjourns in late June.
Why is this case important?
Remember Brendan Eich? He was the co-founder of Mozilla, the corporation that invented the web browser Firefox. When his donations to California’s Prop 8 – the ballot initiative seeking to define marriage as one man and one woman and place that definition in the state constitution – were uncovered, his own employees and board of directors hounded him into resigning from his own company. That’s just one example of the lengths activists will go to in today’s climate of personal destruction over cultural issues.
The fear of retaliation for giving to conservative causes is justified, based on the history of Prop 8. The Thomas More Law Center is a public interest law firm that specializes in defending religious freedom. Americans for Prosperity is a libertarian/conservative political advocacy group founded in 2004 by David and Charles Koch.
In 1958, the U.S. Supreme Court upheld the right of the NAACP not to disclose its list of members to the state of Alabama, in the first important case concerning the freedom of association. The fears of retaliation and potential chilling of future members joining the civil rights organization were enough to justify the protection of the First Amendment then, and in the case of California’s quest for donor lists, justifies it now.
The cases are Thomas More Law Center v. Becerra and Americans for Prosperity Foundation v. Becerra.
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