Donor Disclosure Requirements for NY Nonprofits
Under NY State law, issue-oriented charitable organizations who engage in lobbying activities must disclose the names of persons and organizations who donate more than $2,500. N.Y. Executive Law § 172-e.
In addition, any 501(c)(3) nonprofit organization that donates “staff, staff time, personnel, offices, office supplies, financial support of any kind or any other resources” totaling $2,500 or more in a six-month period to a nonprofit lobbying organization in New York to file a report with the Attorney General. That report must include the identity of any donor to the 501(c)(3) of $2,500 or more, and will be posted to a public website within 30 days of filing.
There is plenty of action in agency tribunals and courts surrounding these disclosure rules. The potential for disclosure of the identities of valuable charitable donors makes this a sensitive issue for nonprofits. Organizations challenging the rules have argued that they intend to chill nonprofits' speech in violation of the First Amendment.
An exemption in the legislative law allows groups, including those operating "in the area of civil rights and civil liberties," to shield the identity of donors if doing so would "lead to harm, threats, harassment or reprisals to a source of funding." The New York Civil Liberties Union (NYCLU) applied for such an exemption in 2014. That was granted after an initial agency ruling denying the exemption to NYCLU was overturned as clearly erroneous.
Last week, the NY JCOPE (Joint Commission on Public Ethics) rejected NYCLU's application to extend the exemption. (NYLJ (subscription).) Litigation will continue.
***Mullen PC has advised donors to charitable organizations on the privacy implications of New York state laws, and has advised 501(c)(3) and (c)(4) organizations on compliance with New York donor disclosure requirements.