US Supreme Court invalidates California rule requiring nonprofits to disclose major donors News
© WikiMedia (Gage Skidmore)
US Supreme Court invalidates California rule requiring nonprofits to disclose major donors

The US Supreme Court on Thursday ruled 6-3 in Americans for Prosperity Foundation v. Bonta that California can not require nonprofit organizations to disclose the names and addresses of their largest donors.

California requires nonprofits to disclose their Service Form 990 to the state attorney general (AG). Service Form 990 is the primary tool for gathering information about tax-exempt nonprofit organizations, and its Schedule B requires the organizations to disclose the names of their largest donors to the Internal Revenue Service.

The Supreme Court held that this disclosure violated the First Amendment because it made donors less likely to contribute and afraid of potential reprisals for having donated to those organizations, although the California AG did not publicly disclose the organizations’ Form 990s.

The appellants are Americans for Prosperity and the Thomas More Law Center. Americans for Prosperity is a libertarian political advocacy group funded by Charles and David Koch and is credited for transforming the Tea Party movement into a political force. The Thomas More Law Center is a conservative Christian legal defense organization that focuses on social issues like same-sex marriage and abortion.

The Supreme Court found that the AG’s investigators did not actually rely on Form 990s for detecting or preventing charitable fraud, and that it burdened the associational rights of donors. Moreover, the court found that California would not be able to keep the organizations’ forms confidential.

The court ruled under an “exacting scrutiny” standard, which requires that the law be narrowly tailored to the state’s interest, but it need not be the most narrowly-tailored method of achieving that end.

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