Mississippi Has Become the Next State to Protect Non-profits and Their Donors

by Matt Miller
March 29, 2019

Mississippi has become the latest state to protect the free-speech and associational rights of non-profit donors by enacting H.B. 1205.  The bill has passed both chambers of the state legislature and was signed into law by Governor Phil Bryant this week.  Predictably, proponents of unlimited donor disclosure opposed the bill, implying that represents a radical departure from established norms.  They want the government to be able to demand any and all information about how non-profit groups are funded, claiming a “right to know” who and what their neighbors are supporting.

In reality, H.B. 1205 simply codifies longstanding practice in the 501(c) community and protects charitable donors from having their names put on a government list, thus exposing them to potential harassment and intimidation by their ideological opponents.

Protecting donor privacy is the default position for—and a responsibility taken seriously by—almost all of America’s non-profit organizations. Charity Navigator is a non-partisan, non-profit organization that provides quality ratings for over 9,000 U.S. charities.  It is an easy—and extremely useful—way for anyone thinking of making a donation to see whether their money is likely to be spent carefully. Charity Navigator uses many metrics in assessing its overall quality ranking, from fiscal responsibility to program effectiveness. One of the most important metrics looks at a charity’s donor privacy policies.  Charities that honor and protect donor privacy receive a higher rating on this metric than those that do not.

The Better Business Bureau also likewise incorporates a group’s donor-protection measures into its charity rankings.  In fact, nonprofit groups typically consider it an ethical obligation to keep their donors’ identities confidential. “Confidentiality is indispensable to the trust relationship that must exist between a nonprofit organization and its constituents,” declares one leading guidebook on non-profit fundraising. “It is extremely important to develop ethical rules and guidelines surrounding information and confidentiality,” declares another, because “donors count on nonprofits to respect their privacy.”

H.B. 1205 codifies these long-standing practices by barring the government from both demanding and publicizing the personal information for 501(c) non-profit donors, including information “that directly or indirectly identifies a person as a member, supporter or volunteer of, or donor of financial or nonfinancial support to, any entity organized under Section 501(c) of the Internal Revenue Code.” 

To be clear: the bill does not protect 501(c) groups from being asked for information about legislation or (in the case for 501(c)(4) groups) candidates that group may have supported or opposed.  The public will still be able to find this information.  But H.B. 1205 prohibits the government from peeking behind the curtain to obtain and/or publicize lists of individual donors. 

The U.S. Supreme Court recognized the importance of these kinds of protections over 60 years ago when it decided NAACP v. Alabama.  In that case, the Court rejected the government’s demand to know the identities of supporters of the NAACP.  The Court rightly understood that there is a “vital relationship between freedom to associate and privacy in one’s associations.” The reason for this is simple: if supporters’ names are made public, those supporters are at increased risk for harassment and intimidation, “particularly where a group espouses dissident beliefs.”

Protecting donor privacy is not radical—it is the default in the non-profit community.  What is radical is demanding that the government collect the personal information of non-profit donors—often including occupations and employers—and publishing that information on the internet for anyone to see.  In our increasingly partisan times, the publication of this information exposes individuals across the political spectrum to harassment and intimidation from people whowant to silence them.  With the enactment of H.B. 1205, Mississippi is supporting its non-profit community, and their donors, by defending free speech and free association.

Matt Miller is a Senior Attorney at the Goldwater Institute.