Ninth Circuit Requires Charity to Reveal Donors to California Authorities

In April 2016, Americans for Prosperity Foundation (AFP) won a victory against then-California Attorney General Kamala Harris (D) when it obtained a permanent injunction from a U.S. district court against the state’s demand for the charity’s IRS Form 990 Schedule B. However, the U.S. Ninth Circuit Court of Appeals this week reversed that ruling.

The circuit court said that the state attorney general’s donor list demand “is substantially related to an important state interest in policing charitable fraud.”

While the district court had highlighted a “pervasive, recurring pattern of uncontained Schedule B disclosures,” the circuit court saw things differently. Writing the circuit court’s opinion, Judge Raymond Fisher said, “Even assuming arguendo that the plaintiffs’ contributors would face substantial harassment if Schedule B information became public, the strength of the state’s interest in collecting Schedule B information reflects the actual burden on First Amendment rights because the information is collected solely for nonpublic use, and the risk of inadvertent public disclosure is slight.”

AFP spokesman Bill Riggs noted the danger of a “threat and chill” donors face with disclosure and said, “We are disappointed by the Ninth Circuit’s latest decision and believe it imperils people’s First Amendment right to freedom of speech and of association."

NRB has previously expressed concern with maintaining donor privacy and has supported Rep. Peter Roskam’s (R-Ill.) relevant Preventing IRS Abuse and Protecting Free Speech Act, which passed in the House of Representatives two years ago in the previous Congress.

By Aaron Mercer, Vice President of Government Relations

Published: September 14, 2018

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