Tuesday, July 6, 2021
I have written a detailed analysis of last week's Supreme Court donor disclosure decision, Americans for Prosperity Foundation v. Bonta. It is available at Law360. Here are the first several paragraphs:
On July 1, the U.S. Supreme Court issued its opinion in Americans for Prosperity Foundation v. Bonta, striking down as unconstitutional California's requirement that charities registered in that state submit Schedule B to Form 990/990-EZ/990-PF, the federal tax schedule with identifying information for major donors, to the state on a confidential basis.
The decision not only prevents California from requiring all charities registered in that state to provide this information but also has implications for other donor disclosure requirements. Such requirements include ones imposed by a handful of other states as part of their regulation of charities, the federal tax law requirement that charities exempt under Internal Revenue Code Section 501(c)(3) and political organizations exempt under Section 527 disclose their donors to the Internal Revenue Service and, for private foundations and political organizations, also to the public, and federal and state donor disclosure laws relating to elections.
My read of the opinion is that it contains two significant holdings that will both encourage future constitutional challenges to these requirements and give those challenges a better chance of succeeding than they had under prior rulings.