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Supreme Court Strikes Down Donor Disclosure Rule

Jul 12, 2021

On July 1, 2021, the Supreme Court ruled that California cannot implement the nonprofit donor disclosure rule, which required charities to file with state regulators the federal form disclosing the names of major donors. 

The ruling refers to Schedule B of the IRS Form 990.  In general, an exempt organization filing Form 990 is required to disclose contributions greater than (1) $5,000; or (2) those that exceed 2% of total contributions from any single contributor, and provide the name and address of such donors. 

California’s policy kept charitable-donor disclosures confidential and was intended to be seen only by the State’s auditors. The Supreme Court declined the State’s confidential access to donor information, which is the same information already provided to the federal government, citing that the policy infringed on the donor’s First Amendment rights.

New York State has similar regulations issued in November 2019 that require organizations registered with the State’s Charities Bureau to file the Form CHAR-500 and provide a complete copy of the IRS Form 990, including Schedule B (which provides the names and addresses of major contributors).  The Supreme Court ruling may impact New York State’s disclosure requirements in the future.

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Nora Xie

Nora Xie is an Audit Senior Manager in the Not-for-Profit Group.

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