Editorial: Protect free association, but don’t hamper oversight of charities

The Supreme Court heard arguments in a case from California on Monday that pits two important interests against each other: state oversight of charitable organizations and the right of donors to associate with causes they support without being threatened or harassed.

Even if the court finds fault with California’s demand that nonprofits turn over the names of major donors, it needs to avoid an overly sweeping ruling that would hamstring the state in investigating possible fraud.

For the last several years, California’s attorney general has demanded that charities soliciting funds in the state turn over copies of an Internal Revenue Service form, including an attachment listing large donors. Two nonprofits — the Americans for Prosperity Foundation, a group supported in part by Charles Koch, and the Thomas More Law Center, a conservative public interest law firm — are challenging that requirement. They are being supported by some nonprofits across the ideological spectrum.

The challengers argue that requiring charities to turn over the names of donors creates a chilling effect, potentially deterring donors because they fear harassment if their contributions to controversial causes are publicized. California doesn’t release the names of donors, but in the past some of those names have leaked out. (Aimee A. Feinberg, California’s deputy solicitor general, said that “the state has bolstered its confidentiality protocols in response to past lapses.”)

In a landmark 1958 decision, the court held that the state of Alabama violated the constitutional protection for freedom of association when it demanded the membership list of the NAACP. The court said that the civil rights group had made an “uncontroverted showing” that the disclosure of its membership list would expose its members to “economic reprisal, loss of employment, threat of physical coercion, and other manifestations of public hostility.”

Derek L. Shaffer, the lawyer for the Americans for Prosperity Foundation, suggested that donors to some nonprofits face similar consequences in “our divisive times.” That’s true, he suggested, even when the donations are to charities such as animal welfare groups. (He noted that People for the Ethical Treatment of Animals was one of the nonprofits supporting his position.)

The court shouldn’t abandon the precedent it set in the NAACP case. But the possibility of a chilling effect from disclosure must be weighed against other interests, including the state’s interest in investigating and prosecuting fraud by registered charities.

The justices could decide that the U.S. 9th Circuit Court of Appeals didn’t properly balance the interests in this case or subject California’s regulation to the required “exacting scrutiny.” Representing the Biden administration, acting Solicitor General Elizabeth Prelogar said that some of the appeals court analysis was incomplete. Prelogar suggested that the justices remand the case to the 9th Circuit to take a closer look at whether the law, as applied to the challengers, created a chilling effect.

The justices must also avoid a pitfall identified by Justice Stephen G. Breyer. He expressed concern that if the court ruled for the nonprofits, it might undermine campaign finance laws that require the disclosure of the names of contributors.

That would be a disaster. Even in its notorious Citizens United ruling allowing corporations to spend money to influence elections, the court has upheld disclosure requirements. The court also has rightly upheld public release of the names of citizens who sign petitions seeking to place a referendum on the ballot.

One can argue that it would be inconsistent to require disclosure for contributions to election campaigns while protecting the anonymity of contributions to nonprofits with a political or ideological agenda. But in the balancing of interests, preserving the integrity of elections carries special weight.

Protecting contributors to charities from threats and harassment is also important, but their privacy must be weighed against the state’s interest in ensuring that nonprofits that collect money from Californians are operating honestly. However it rules, the court must recognize that both interests are important and balance them accordingly.