Donor Privacy — and Free Speech — Protected in Supreme Court Victory

July 1, 2021
by Timothy Sandefur

The Supreme Court this morning struck down the California Attorney General’s demand that nonprofit advocacy groups—including the Goldwater Institute—turn over confidential information about their donors as the price of exercising the First Amendment freedom of speech.

The case ends more than a decade of litigation that began when then-Attorney General Kamala Harris abruptly ended the practice that allowed nonprofits to turn in their annual reports with private information redacted, as a security measure. That had been allowed for many years, since if the Attorney General’s office ever actually needed such information, it could easily get it in many other ways—such as a subpoena or audit. But in 2010, Harris ordered any nonprofit that collected money in California to hand over copies of their unredacted IRS paperwork. That information would be placed into a government database that Harris promised would be kept confidential. Of course, it wasn’t—a trial judge later found almost 2,000 instances in which Harris’s office allowed this information to be publicly circulated. (The Goldwater Institute received such a demand, but refused to disclose this information.)

That, of course, is a problem because it exposes donors to retaliation, harassment, and even violence. And that’s not just a mere possibility. In the wake of California’s controversial Proposition 8 (banning same-sex marriage), opponents of the initiative specifically targeted its supporters for retribution, leading to cases of stalking, vandalism, and even physical attacks.

Some seventy years ago, the Supreme Court acknowledged this danger, and held in a case called NAACP v. Alabama that states can’t force such organizations to turn over their supporters’ identities except if there was an extremely important reason, and as long as the demand was carefully designed to prevent inadvertent disclosure. But Kamala Harris’s office claimed it didn’t have to follow that rule, thanks to later court decisions that seemed to water down the requirements of the NAACP case.

That idea isn’t just a threat to free speech in California, of course. In our friend-of-the-court brief, we pointed to a similar case that we’re currently litigating in New Mexico, where officials in Santa Fe punished a small nonprofit called the Rio Grande Foundation for not disclosing the names of its donors when it posted a video on its Facebook page opposing an initiative to impose a tax on large sodas. Santa Fe claimed that it could force the Foundation to place its donors’ names, addresses, and employment information on a government list simply because the Foundation asked voters to say “no” to a two-cent sales tax. But such demands expose the organization and its donors to potential retaliation into the indefinite future—which, of course, discourages people from exercising their free speech rights by donating to think tanks like the Rio Grande Foundation. In fact, some politicians support donor disclosure requirements precisely because they want to intimidate and silence their opponents.

That’s why Goldwater is defending Rio Grande today, and why we drafted free-speech legislation such as the 2018 Arizona law that protects the right of nonprofit groups and their donors to express their beliefs without having their privacy taken away. That law was later replicated in Utah, West Virginia, and Iowa.

In today’s decision, Chief Justice John Roberts rejected that notion. Forcing advocacy groups—whether it be the NAACP or Americans for Prosperity—to place their donors’ identities on a publicly accessible government list, scares people away from contributing to organizations that speak for their values. While California officials can investigate organizations to ensure they comply with the law, they cannot “cast a dragnet for sensitive donor information from tens of thousands of charities each year, even though that information will become relevant in only a small number of cases.” To do so is likely to intimidate people into not exercising their free speech rights—something the Constitution cannot tolerate. In fact, Roberts noted, “disclosure requirements can chill association even if there is no disclosure to the general public,” because the mere potential for disclosure can “pressure” people into censoring themselves. Thus the Court will rarely allow government to mandate disclosure that “may have the effect of curtailing the freedom [of speech].” California’s demand for private donor information “creates an unnecessary risk of chilling [people’s freedom of speech] in violation of the First Amendment,” by “indiscriminately sweeping up the information of every major donor with reason to remain anonymous.”

That decision vindicates the privacy rights of millions of Americans who choose to contribute to nonprofit organizations that articulate the political, cultural, or religious values they hold dear. That choice is guaranteed by the First Amendment—yet many federal, state, and local officials continue to devote their powers to stripping donors of their privacy rights whenever they exercise that constitutional freedom. This is often done under the guise of “transparency,” but transparency is for government—privacy is for people. Today’s decision is a victory for the free speech rights of all Americans, whatever their ideological background—and we look forward to continuing the fight for freedom of speech and privacy at the federal, state, and local levels.