Will the Supreme Court Protect Charitable Donors From the Prying Eyes of Public Officials?
COMMENTARY: The legal challenge before the Supreme Court — upheld by a federal district court, then dismissed by the 9th Circuit Court of Appeals — touches on one of the basic freedoms of U.S. citizens.
On Monday the Supreme Court heard oral argument in two consolidated cases that deal with the sensitive subject of who gives money to charities and nonprofit organizations: Americans for Prosperity v. Rodriguez and Thomas More Law Center v. Rodriguez.
The state of California — thanks to a rule put in place by its former attorney general, Vice President Kamala Harris — forces charities to hand over their federal tax returns, including a copy of Schedule B, a form containing the names and addresses of major donors nationwide. And that’s a big deal, because such information can easily find its way into the public domain, where anyone who gives a significant amount of money to an organization that’s not approved by America’s rampant “cancel culture” can find themselves targeted. It’s particularly worrying for politically conservative and traditional religious groups whose agendas aren’t exactly “flavor of the month” these days.
In 2014, two groups objected to California’s donor-disclosure requirement: the Americans for Prosperity Foundation, a political advocacy group, and the Thomas More Law Center, a Catholic nonprofit law firm that defends and promotes religious freedom, moral and family values, and the sanctity of life. They argue that the disclosure rule violates the First Amendment’s guarantee of free association by discouraging their donors from making donations. In other words, this legal challenge — upheld by a federal district court and then dismissed by the 9th Circuit Court of Appeals — touches on one of the basic freedoms of citizens of the United States; all citizens, not just conservatives and religious believers who hold unfashionable views.
This isn’t a typical standoff between progressives and conservatives, even if it looks that way at first glance. Sure, the lawsuit was filed by two “conservative” groups against then-California Attorney General Harris and later her successor, Xavier Becerra, who was confirmed last month as President Joe Biden’s secretary of Health and Human Services. But liberal and progressive organizations such as the American Civil Liberties Union, the National Association for the Advancement of Colored People (NAACP) Legal Defense and Educational Fund, and the Human Rights Campaign — groups that normally rally behind Harris and Becerra — understand that the rule threatens advocacy across all ideologies. They, too, fear the potential for retaliation against donors whose names are disclosed, even if by accident.
Back in 1958, the Supreme Court struck down an Alabama rule requiring the disclosure of the names of the NAACP’s supporters. The Supreme Court said the measure would expose them “to economic reprisal, loss of employment, threat of physical coercion, and other manifestations of public hostility.” If Alabama’s true purpose was to determine whether the NAACP was conducting business in the state, it had other, less intrusive ways to do so. Two years later, in another case, this time in Arkansas, the court explained that the names of donors were protected by its prior decision. These NAACP cases were key legal victories of the civil-rights movement.
This, of course, is very well known to the only African American on the Supreme Court, Justice Clarence Thomas. During Monday’s argument, he raised similar concerns that donor identities becoming publicly known would deter people from donating to groups with unpopular or contentious views. As he put it: “In this era there seems to be quite a bit of loose accusations about organizations. For example, an organization that has certain views might be accused of being a white supremacist organization or racist or homophobic, something like that, and as a result become quite controversial.” Note that he said “accused of.” In woke America, you don’t have to actually hold nasty opinions to be treated as extremists who must be silenced.
This is especially true in California, which once again is behaving as a law unto itself. Most nonprofits are required to disclose donors of more than $5,000 to the Internal Revenue Service. Federal employees, or anyone who accesses the information illegally, face civil and criminal charges if they expose confidential information in these notices.
State employees in California, in contrast, aren’t held to such a high standard. In fact, they previously posted more than 1,800 Schedule B forms listing the names and addresses of charitable donors on a public website. Sure, the state has since put in place additional protections to ensure that confidential documents are not made accessible to the public. But even California’s lawyer, responding to a question raised by Chief Justice John Roberts, said “no organization can guarantee perfection” to donors hoping their identities would not be made public by the state.
Given the danger to donors, what could possibly be super-liberal California’s reason for defending the disclosure rules? It’s interesting to speculate, but the official reason is efficiency. That doesn’t ring true. Surely, instead of presuming that all nonprofits are guilty of wrongdoing, a better approach would be to request donor information only if the state begins an official audit or investigation.
So, who supports California’s rule? A group of U.S. senators, led by Sen. Sheldon Whitehouse, D-R.I., filed an amicus brief to the court. Whitehouse and friends assert that the effort to strike down the disclosure rule is part of a broader strategy of “powerful influencers” to control “our politics and policymaking, possibly forever.” Whitehouse, joined by Sen. Richard Blumenthal, D-Conn., and Rep. Hank Johnson, D-Ga., also demanded the recusal of Justice Amy Coney Barrett from the case. Barrett sensibly ignored this request.
Now let’s consider the question of First Amendment rights. Becket Law, a religious freedom law firm that has defended the Little Sisters of the Poor, EWTN, Jewish synagogues, Sikhs and Muslims, among many others, filed an amicus brief that explained how California’s rule “threatens the freedom of assembly protected by the First Amendment, and the freedom of religious assembly in particular.”
The group points to the text, history and tradition of the First Amendment’s Assembly Clause as the appropriate “constitutional mooring” for the Supreme Court. “The assembly right has always included the ability of a group’s members to not reveal their identities to outsiders, particularly the government,” they add. “Cancel culture, fueled by technological developments,” explains Becket, “has significant negative effects for minority dissenting groups, and religious assemblies and institutions in particular.”
Is this case just another example of California as an outlier? I’m afraid it’s not. The Napa Legal Institute, an organization providing corporate, tax, philanthropic, and other non-litigation legal and financial education to faith-based nonprofits, points out that Florida, New Jersey, Hawaii and New York also currently require Schedule B donor information.
The Americans for Prosperity Foundation and Thomas More Law Center have fought a long, hard battle against overreach by California’s attorneys general. Although Harris and Becerra are now in positions of tremendous power in a liberal administration, anxiety about their donor-disclosure rule is by no means confined to Republicans in Washington.
Without making any predictions on how the Supreme Court will decide this case, one thing was clear on Monday: Just as groups across the ideological spectrum have filed briefs against the disclosure rule, the justices on the Supreme Court — well, at least a hefty majority — appear to be worried by its implications. As they should be.