New York State Law Targets Donor Confidentiality

The names of donors who give $1,000 or more to New York 501(c)(4) charities must be disclosed.

Photo: Shutterstock

The state of New York has a law on the books that targets the confidentiality of donors to 501(c)(4) nonprofits, those focused solely on social welfare. While that definition is broad, and the Tea Party is such a nonprofit, the problem is that the New York law essentially puts up what some refer to as unacceptable cost barriers to free speech.

Basically, the law says that the names of anyone who donates $1,000 or more to a 501(c)(4) organization must be disclosed. The law also requires 501(c)(3) nonprofits to disclose when they make even minimal donations or in-kind donations like office space or supplies to 501(c)(4) organizations.

If a 501(c)(4) nonprofit in New York tries to address or otherwise influence public policy by taking a stance on an issue, the law kicks in. According to the law, if the organization “refers to and advocates for or against a clearly identified elected official or the position of any elected official or administrative or legislative body relating to the outcome of any vote or substance of any legislation, potential legislation, pending legislation, rule, regulation, hearing, or decision by any legislative, executive or administrative body” they face disclosure obligations.

Basically, if a group dedicated to social welfare talks about anything related to social welfare, they have to disclose.

Supporters of the law say they are protecting individual rights by giving the state’s attorney general the discretion to restrict public disclosures when those disclosures “may cause harm, threats, harassment, or reprisals.” Opponents say this does nothing to preserve anonymity from the government and that it doesn’t protect a right of anonymity from the public.

The law is currently being challenged in court, so it may or may not be long for this world, but it is exactly the kind of model that the current federal government might consider applying more broadly across the country. More pressing, though, is that if the trial goes in favor of the State of New York, it becomes precedent, and that will give other states the courage to pursue similar laws in their own legislatures.

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