In a decision delivered on July 1, the United States Supreme Court struck down a California law requiring not for profit entities to disclose larger donors to the State Attorney General. Chief Justice Roberts delivered the opinion for the 6-3 majority, largely split along ideological lines. The more liberal leaning Justices Breyer, Sotomayor, and Kagan dissented. The intent of the California law was to assist in the policing of NFP fraud by requiring these organizations to report all donors of $5,000 or more. A broad coalition of NFP groups banded together to oppose the law.
In his majority opinion, Roberts said such laws had a chilling effect on right of association provided by the First Amendment. In a not so subtle swipe at the State of California, Roberts also wrote the promises of confidentiality the State provided were worthless. He noted donors to the particular charities had received serious threats. The long term implications to this decision are unclear. Many legal pundits are claiming this decision will be the wedge in the door to challenge future campaign finance disclosures. What is for certain now is larger donors to unpopular causes can breathe a sigh of relief as they maintain at least some semblance of anonymity.
The text of the decision can be found here.
Mark Koscinski CPA D.Litt. 