As many nonprofits are aware, California is one of two states requiring the filing of the IRS Form 990 unredacted Schedule B at the time of charity registration and renewal required to be eligible to solicit funds in California.  In early May, the 9^th Circuit denied the Center for Competitive Politics (CCP) an injunction that would have restricted the California Attorney General’s office from making the fully complete Schedule B a filing requirement.

The Schedule B lists the name, address, and amount of donors contributing over $5,000 in a year.  CCP, along with other nonprofits, claimed that donors may be harassed if their name is associated with potentially controversial nonprofit organizations. The IRS keeps the Schedule B confidential and only one other state, New York, requires the unredacted Schedule B.

California Attorney General, Kamala Harris, is responsible for overseeing charities that solicit contributions in the state of California – a state where CCP raises money.  Kamala Harris asserts California law requires charities that wish to solicit in California to file an un-redacted copy of its IRS Form 990 Schedule B with the state under Cal. Code Regs. tit.11, § 301 (2014).  She also states that the Schedule B will be kept confidential by California and not released.

Interested in more detail?  See LLoyd Mayer’s article from the Nonprofit Law Prof Blog, http://lawprofessors.typepad.com/nonprofit/2015/05/9th-circuit-supports-disclosure-to-ag-of-501c3s-donors.html

Update:

More recently the Supreme Court denied the emergency appeal from the CCP.  CCP filed the appeal with Justice Kennedy, who denied it without prejudice. David Keating, President of the CCP, has stated that the center will continue injunction efforts in the event Harris attempts to collect donor information. Interesting, Justice Kennedy is a proponent of free speech and free spending in terms of politics, two aims the CCP promotes; however, he is also in favor of disclosure laws.

This issue continues to evolve as more nonprofits have stepped up to file cases in California.  Clearly Compliant will continue to track the issue and keep you posted.

Comments?  Send me a note at sarah@clearlycompliant.com