Early last month, the U.S. Supreme Court agreed to hear a case addressing the mandatory disclosure of donor giving information to state officials. Their ruling on donor disclosure laws may affect nonprofit fundraising.
What mandatory disclosure means for donors and nonprofits
Currently, three states – California, New Jersey and New York – mandate that donor information (including donor name, address and gift amount) be shared with the State Attorney General’s Office. If the charity doesn’t comply, then the charity will not have the authority to solicit gifts.
Many Many other states are considering similar donor disclosure laws that affect nonprofit fundraising.
Most individual donors expect the nonprofit community to maintain their donor confidentiality – they’re not comfortable at the prospect of their personal information being handed over to state officials.
Further, organizations that rate best practices for charities require that a charity apply governance and systems designed to protect the donors’ privacy.
There’s no question that these donor disclosure law have consequences that may affect nonprofit fundraising, including:
- Infringing on the donor’s privacy
- Increasing the charities’ governance obligations
- Introducing data security issues
Most importantly for nonprofits across the country, these new regulations may cause many donors to reconsider their philanthropy. That has tremendous consequences for charities that rely on donor support to fund important programs and services in healthcare, social services, international relief, environmental, educational, animal care and the fine arts.
How nonprofits can respond to donor disclosure laws that affect fundraising
The Nonprofit Alliance, of which BDI is a member, is filing a bipartisan amicus brief to the Supreme Court that supports the critical importance of maintaining a donor’s philanthropic privacy and opposing a mandatory disclosure of donor information to state officials.
We’re hopeful the Court will understand, embrace and rule in favor of a donor’s privacy. Within the next few weeks, a copy of the brief will be available for review along with an opportunity to join the nonprofit community encouraging the Supreme Court to rule in favor of donor privacy.
We’ll keep you updated on any new developments regarding these donor disclosure laws that affect nonprofit fundraising.
In the meantime, learn about 4 big policy changes likely to impact philanthropy in 2021. Or, read more of the latest nonprofit fundraising news and tips here.