On a recent episode of the Cato Daily Podcast, produced by our friends at the Cato Institute, host Caleb Brown brought on Peter Lipsett, as well as People United for Privacy’s Luke Wachob, for a discussion about ongoing threats to donor privacy.
In recent history, state governments have compelled nonprofits to report the names of their donors to the state, a flagrant violation of First Amendment rights. Thankfully, Luke and Peter point out, the U.S. Supreme Court affirmed in the 2021 Americans for Prosperity Foundation v. Bonta decision that Americans have a right to support charitable causes anonymously.
Back in 1958, Luke notes, the Supreme Court ruled that the state government of Alabama could not require the NAACP to disclose its donor and member lists, rightly perceiving that such disclosures would chill free speech and open donors to targeting if their names were leaked by individuals in the Alabama state government.
But since that 2021 decision, Peter cautions, Arizona has tested the limits of protections on donor privacy by requiring nonprofits that engage in public policy communications to disclose their donor lists. This law broadens the scope of campaign finance regulations, treating charitable groups that seek to educate the public on issues related to policy as political groups.
Treating nonprofits as suspicious, shadowy organizations also discourages charitable giving, Peter points out. Noting the decline in small-dollar donations, Peter argues that this trend harms small, local nonprofits most of all.
A more hopeful sign, and a direction for other states to follow, comes from Colorado. Republicans and Democrats alike were able to come together around a common interest in protecting donor privacy.
To learn more about the threats to donor privacy and philanthropy more broadly, check out the recent Giving Ventures episode, “Taxes, Philanthropy, and Donor Intent in the Next Administration.”
