Disclosure of Donor on 990—The Supreme Court to Weigh In

There’s an interesting case being heard in the United States Supreme Court. Even though I left law school two decades ago and never practiced, I still love following the nine high justices and their thoughts. In this case, it is an issue dealing with public disclosure of donors on the IRS form 990.

Specifically, the Supreme Court will be hearing a case that involves one of three states, in this case, California, that requires non-profits to list all of their donors above a certain dollar level. The other two states are New York and New Jersey. The states’ argument is that disclosure is good as it provides “light“ into the process of non-profit work. The organizations, who are represented by the Thomas Moore Law Center, comment that this is similar to disclosure requirements shot down in the 1940s and ’50s which attempted to get the donors’ names from the NAACP. Specifically, that these kinds of laws are a violation of the First Amendment.

I find this fascinating because, in its highest altitude, the intent of both sides is noble. Openness for non-profits is a good thing. And donors who want to remain anonymous and not be potentially hassled for their decisions regarding financial support to non-profits is an equally positive thing. In the end, I do fall on the side of anonymity and privacy. If people feel as if their names will be released, even privately to a state agency, that could have a chilling effect on one’s willingness to engage in philanthropy. The IRS has already begun to reduce the listing of these donors, found in section B of the 990, with several subsets of nonprofit organizations. I’ll be interested to hear what the nine wise souls ask and how the responses are crafted. I will give you an update down the road.