Supreme Court Case Shows the Need for Donor Privacy Laws

• The U.S. Supreme Court has long recognized that forced disclosure of nonprofit and charitable organizations’ donor information threatens freedom of association and can chill public debate
• Donor privacy protections have broad and bipartisan support, touching on various subject areas
• The General Assembly should override Gov. Stein’s veto of nonprofit donor privacy legislation

The General Assembly recently passed Senate Bill (SB) 416, the “Personal Privacy Protection Act,” which contains important measures to protect the privacy of those who donate to nonprofit organizations. Gov. Josh Stein vetoed that bill, claiming the law would create “more opportunity for dark money in our politics.”

That is nonsense.

Senate Bill 416 is commonsense legislation that would protect the privacy of those who donate to nonprofits. This isn’t about stopping dark money; it’s about preventing government-run witch hunts.

Donor privacy has a complex constitutional history rooted in First Amendment protections of the freedoms of association and speech. Evolving from the civil rights era to today, however, many state and federal officials seek to expose and harass the supporters of organizations that criticize their agendas or take contrary positions on public policy issues.

Early foundations for protecting donor privacy (1950s–1960s)

The U.S. Supreme Court first established constitutional protections for donor privacy in NAACP v. Alabama (1958). During the civil rights movement, the state of Alabama tried to force the NAACP to identify its supporters to the government. The NAACP knew that if its membership list were made public, those people would be targeted for harassment, intimidation, and even violence. So they fought back, eventually bringing the matter to the Supreme Court and winning.

In a unanimous decision, the Supreme Court said that donations to organizations like the NAACP can remain private even if they take a position on political issues. “It is hardly a novel perception that compelled disclosure of affiliation with groups engaged in advocacy may constitute as effective a restraint on freedom of association as [other] forms of governmental action,” the Court wrote.

This principle was reinforced in Bates v. Little Rock (1960), where the Court struck down local ordinances requiring organizations to disclose membership information, emphasizing that privacy in group association fosters the “vital relationship between freedom to associate and privacy in one’s associations.”

Modern tensions and developments

The constitutional landscape became more complex with cases like Citizens United v. FEC (2010), which emphasized disclosure as an important safeguard in campaign finance while maintaining that it shouldn’t unduly burden speech rights. One consideration would be “if a group could show a ‘reasonable probability’ that disclosure of its contributors’ names would ‘subject them to threats, harassment, or reprisals from either Government officials or private parties.’”

More recently, Americans for Prosperity Foundation v. Bonta (2021) significantly strengthened donor privacy protections. The Court struck down California’s requirement that charities disclose their major donors to state regulators, ruling that even confidential disclosure requirements must meet “exacting scrutiny” — meaning they must be substantially related to sufficiently important governmental interests and be narrowly tailored to the government’s asserted interest.

Recognizing that donor privacy concerns are not limited to select issues or certain philosophies, the Court wrote: “The gravity of the privacy concerns in this context is further underscored by the filings of hundreds of organizations as amici curiae in support of the petitioners. Far from representing uniquely sensitive causes, these organizations span the ideological spectrum, and indeed the full range of human endeavors: from the American Civil Liberties Union to the Proposition 8 Legal Defense Fund; from the Council on American-Islamic Relations to the Zionist Organization of America; from Feeding America—Eastern Wisconsin to PBS Reno. The deterrent effect feared by these organizations is real and pervasive.”

The U.S. Supreme Court will hear arguments next term in a case arising from New Jersey’s attempt to investigate a group of faith-based pregnancy centers. In First Choice Women’s Resource Centers v. Platkin, the Court agreed to decide whether a group of faith-based pregnancy centers can go to federal court to challenge the constitutionality of a subpoena from a state attorney general or whether they must pursue those claims in state court. The case is focused on technical procedural issues, but its facts are an important example of the risks donor privacy continues to face.

This case arose from an investigation by the state’s Division of Consumer Affairs into whether First Choice Women’s Resource Centers was misleading donors by, for example, not cautioning that the pregnancy centers do not provide abortions.

The division issued a subpoena seeking information, including donor information, for nearly 5,000 contributions. First Choice went to federal court to block the subpoena, arguing that it violated the First Amendment by chilling the group’s rights to free speech and its associations with donors, who were scared off by the prospect that their identities would be revealed.

Threats to donor privacy are real. The court filings in the First Choice case list dozens of laws from around the nation that give state officials sweeping investigative powers. A North Carolina statute (G.S. § 75-10) is on that list.

Officials in several states have used those investigative powers to pursue donor and contributor information to further political and policy agendas. North Carolina needs donor privacy protections before either side of the political aisle can misuse their power to issue demands against their ideological and political opponents.

Colorado, Georgia, and Nebraska passed laws protecting donor privacy in 2024. Nevada passed such a law this year. Donor privacy protection in North Carolina now needs only a veto override.

Just as we fiercely protect the privacy of the voting booth, we must also defend the right to support the causes we believe in, free from government oversight and the fear of being exposed to the world.

The post Supreme Court Case Shows the Need for Donor Privacy Laws first appeared on John Locke Foundation.