Two years after a major U.S. Supreme Court ruling underscoring the constitutional importance of nonprofit donor privacy, battles over appropriate disclosure requirements continue in state capitals and Washington, D.C. While some legislators are weighing efforts against “dark money,” others are taking steps to boost giver protections.

Earlier this month, Indiana Governor Eric Holcomb signed a bill into law that generally prevents its state agencies from demanding the “personal information” of a nonprofit organization’s donors. It would also prohibit the public release of such information and include potentially stiff penalties for violators.

“Speaking with our members, it’s clear that donor privacy is one of the basic things they’re asked when consulting with donors,” Claudia Cummings, president of the Indiana Philanthropy Alliance, told Indiana Capital Chronicle about her association’s support for the bill.

“Donors get to choose how they spend their money — these are their private dollars,” she added. 

Protecting givers also appeared to be on the mind of Indiana’s U.S. Senator Todd Young during a Senate Finance Committee hearing considering the nomination of IRS Commissioner Daniel Werfel earlier this year. Young highlighted the 2021 high court ruling Americans for Prosperity Foundation v. Bonta striking down a California bulk donor data collection requirement, which Chief Justice John Roberts said was a “dramatic mismatch” with the state’s interest in preventing fraud in the nonprofit sector. Pointing out risks for the constitutional guarantee of free association, Roberts said, “First Amendment freedoms need breathing space to survive.” In his remarks, Young emphasized that this constitutionally protected privacy is “essential to philanthropic freedom,” and he lamented ongoing calls to mandate donor disclosure. 

Nevertheless, such calls are ongoing — often with sights set on “dark money” groups that weigh in on elections and ballot questions. Philanthropy Roundtable recently highlighted relevant efforts in Alaska and North Dakota and a call for “stronger transparency laws” in Oklahoma Governor Kevin Stitt’s State of the State address in February. The group is wary that “efforts to expand restrictions on political activities often sweep in the non-political speech of nonprofits in a state.”

In an article posted in DC Journal late last year, Philanthropy Roundtable’s government affairs director Elizabeth McGuigan said, “Privacy opponents claim there’s not enough clear division between giving to policy nonprofits versus donating to political parties and candidates. But the truth is, when we conflate politics with policy, it can negatively affect communities that rely on philanthropy.”

“Donations to policy-related activities aren’t political in nature, instead, they support ideas, research, and education that will inform policymakers and policy,” she added. “Charities’ ability to engage in policy debates is at the core of our civil society.”

ECFA will continue to monitor deliberations over appropriate charitable sector transparency mandates and donor protections in capitals around the nation.