Protecting Donor Privacy Philanthropic Freedom, Anonymity and the First Amendment

www.PhilanthropyRoundtable.org www.ACReform.org Contents

1 Executive Summary 3 Introduction 3 A Rich Tradition and History of Anonymous Giving 7 A Constitutionally Protected Right 9 Activists and Attorneys General Threaten Donor Privacy 13 Legislators Seek to Undermine Anonymous Giving 14 Is Anonymity Still Needed? 16 Confusing Politics, Government, and Charity 18 Ideology and Donor Privacy 20 Donor Anonymity is Worth Protecting 22 Endnotes Executive Summary among them for supporters of unpopular causes or organizations is the reality that exposure will lead to harassment or threat The right of charitable donors to remain of retribution. anonymous has long been a hallmark of American philanthropy for donors both large Among the more prominent examples is the and small. Donor privacy allows charitable harassment of brothers Charles and David givers to follow their religious teachings, Koch, who have helped fund a broad range insulate themselves from retribution, avoid of nonprofit organizations ranging from unwanted solicitations, and duck unwelcome Memorial Sloan Kettering Cancer Center publicity. It also upholds and protects important to the libertarian-oriented , as First Amendment rights of free speech and well as organizations that engage in political association. However, recent actions by activity. As a result of their giving, the Koch elected officials, activists, and organizations brothers and their companies routinely face are challenging this right and threatening death threats, cyber-attacks from the hacker to undermine private philanthropy’s ability group “Anonymous,” and boycotts aimed at to effectively address some of society’s most the many consumer products their companies challenging issues. make. Because of this attention, the brothers have to hire armed security to keep them, as Several court cases have established donor well as their families, employees, and business privacy as a constitutionally protected right. operations, safe. The Supreme Court ruled unanimously in NAACP v. Alabama in 1958 that “freedom to Despite the Supreme Court’s unanimous engage in association for the advancement ruling in NAACP v. Alabama, a growing of beliefs and ideas is an inseparable aspect number of political leaders and law of the ‘liberty’ assured by the Due Process enforcement officials are calling for donor Clause of the Fourteenth Amendment.” In information, such as the information listed a landmark judgment written by Justice on the Schedule B of the 990 tax form, to John Marshall Harlan II, the Court held that be made public. In 2006, New York Attorney the State of Alabama could not compel the General Eric Schneiderman demanded that NAACP to reveal the names and addresses of the annual reports of state-registered charities its members because doing so would expose include the names, addresses, and total its supporters “to economic reprisal, loss of contributions of their major donors. Former employment, threat of physical coercion, and California Attorney General (and now U.S. other manifestations of public hostility” and Senator) Kamala Harris began in 2010 to thereby restrain “their right to freedom of demand unredacted Schedule Bs as part of association.” In Buckley v. Valeo in 1976, the the annual reporting requirement for charities Court upheld a disclosure requirement for that solicit contributions in that state. donors to political campaigns, political parties, In 2016, The filed and political action committees, but noted two amicus briefs in support of groups that are this was a narrow exception to the principles fighting to keep their donors private. In both upheld in NAACP v. Alabama. Foundation v. Becerra and While the reasons many philanthropists wish Independence Institute v. FEC, the Roundtable to remain anonymous are numerous, chief argued that the reckless disclosure of donor

Protecting Donor Privacy 1 While the reasons many philanthropists wish to remain anonymous are numerous, chief among them for supporters of unpopular causes or organizations is the reality that exposure will lead to harassment or threat of retribution.

information to the government or the public free speech. The Center for Competitive raises serious constitutional concerns, while Politics, whose work is mainly in the realm also undermining philanthropic freedom. of political campaign spending, has taken on the issue of disclosure of charitable donors There is certainly a place in philanthropy and represented a think tank, Independence for accountability and transparency. Because Institute, in its fight regarding improperly donors are able to deduct charitable applied campaign finance disclosure laws. contributions for tax purposes, safeguards are Other groups that have become active on the in place to ensure the money being given issue include the Foundation for Government away isn’t secretly being used to the benefit Accountability, the Goldwater Institute, and of a donor, such as attempting to avoid tax of course, The Philanthropy Roundtable. obligations. Private foundations must also disclose their donations to the public to ensure Though some today would diminish or that funds are not being used for the personal eliminate the right of charitable donors to benefit of those who give to foundations. remain anonymous, the arguments offered However, aside from these modest safeguards generally range from simple curiosity about to ensure charitable funds are used for who is giving to the desire by some to build charitable purposes, there is little legitimate what amounts to an “enemies list,” allowing reason to violate donor privacy principles. them to know whom to target for harassment, whom to boycott, and whom to ostracize from Many groups are taking a leading role polite society. Neither of these arguments, in defending donor privacy. State Policy nor anything lying between them, such as Network, an association of state-based free- misapplied notions of “accountability” or market think tanks and other organizations “transparency,” justifies eliminating the right favoring limited government, has launched an of philanthropists to keep their giving private. initiative called “People United for Privacy,” Only in the most compelling circumstances, providing information and resources for such as an active criminal investigation citizens to understand the importance of into a specific charity or donor, should this protecting donor privacy. The American important right be open to curtailment. Legislative Exchange Council, an organization of conservative lawmakers, is also active on this issue as part of its larger effort to defend

2 The Philanthropy Roundtable Introduction Like many philanthropists he may not have wanted his support to overshadow the good work of the charities he supported, which at The end of 2016 saw the passing of, among least one recipient of his generosity reported many other notable individuals, pop music to be the case. Perhaps, living in the spotlight icon George Michael. Early media coverage for so many years, he simply wanted to keep of his death focused on his early stardom his giving private because it was one of the as a member of the band Wham!, his two few things he had the ability to keep private. GRAMMYs, and his activism on behalf of gay rights and AIDS prevention, among other Though George Michael’s fame was unusual items. But within a few days, media coverage for a philanthropist, the desire to keep much began to reveal another side to George of his charitable giving private is a common Michael of which only a select few were one among many who share their wealth with previously aware — his incredible generosity organizations devoted to the public’s benefit. through charitable giving, much of which he did anonymously and out of the public eye. Unfortunately this desire, which has generally been respected and protected throughout His anonymous donations included millions our nation’s history, is being challenged and to Childline, a U.K. philanthropy that gives eroded by a number of elected officials, abused children a telephone hotline to call activists, and organizations. But for a variety for help, and Macmillan Cancer Support also of reasons, including religious, cultural, acknowledged after his death the singer’s historical, and practical, these efforts should be generous funding for their programs.1 He also resisted when it comes to charities organized volunteered regularly at a homeless shelter, as 501c3 entities specifically prohibited from under the strict condition that his work there campaign intervention, and instead the long be kept secret.2 tradition of allowing philanthropists to decide for themselves whether to give publicly or It’s difficult to pin down exactly why George privately should be preserved. Michael chose to keep private the charitable side of his life. He was no stranger to the public eye, nor was he afraid of taking a controversial stand, and there were certainly occasions when he could have used some A Rich Tradition and sympathetic publicity when his personal life History of Anonymous led to lurid headlines. Giving In a 1993 MTV interview, he explained that the public had become aggravated “listening For some charitable donors, religious to celebrities patting each other on the back convictions drive their decision to give saying how generous they are being. And they anonymously. For example, Jewish donors may 3 are right to.” This sentiment would certainly be influenced by the teachings of 12th century be consistent with his desire to keep his rabbi and scholar Moses Ben Maimon (better charitable giving private. known as Maimonides), who wrote that the second highest form of giving (of eight

Protecting Donor Privacy 3 categories) is to give anonymously in such a Some philanthropists prefer to keep their way that neither donor nor recipient is aware giving out of the spotlight because they fear of each other, while the third highest is for the consumer boycotts, retaliation by public donor to know who received the charity, but officials, and even threats to their safety as a the recipient does not know who gave.4 result of having their support for controversial causes exposed to the public. The Gospel of Matthew in the New Testament includes injunctions to “Take heed This is what has already happened with that you do not do your charitable deeds campaign contributions that are disclosed. before men,” and, “Therefore, when you do For example, individual donors supporting a charitable deed, do not sound a trumpet California’s Proposition 8 campaign to limit before you… But when you do a charitable state recognition of marriage to same-sex deed, do not let your left hand know what couples were later forced from their jobs11 or your right hand is doing, that your charitable experienced picketing outside of their place deed may be in secret.”5 A good many of work. recounted one Christians follow this guidance. One example such story in December 2008, shortly after of this includes a homeless man in Charlotte, Prop 8 passed: North Carolina, who in 2015 anonymously Soon after California’s passage of an gave 18 cents to a local church along with a initiative banning same-sex marriage last note, drawing national attention and offers of month, dozens of gay activists descended help.6 The donor chose to remain anonymous on the El Coyote restaurant with signs to the public, however. “He’s a very humble and placards. They chanted “Shame person, he doesn’t want to be noticed or on you,” cussed at patrons and began a recognized,” a church volunteer who knew boycott of the cafe. the man’s identity told the press.7 According to the church’s pastor, who also knew the The restaurant’s crime: A daughter of the man’s identity, the donor told him “I want this owner donated $100 to support Proposition gift to be between me, God and the church.”8 8, the antigay-marriage initiative approved by voters. Gay activists have refused to lift The Muslim faith similarly favors anonymous the boycott — which restaurant managers giving. Citing the Koran’s injunction, “If you say has slashed revenues by 30%....12 disclose your Sadaqaat [almsgiving], it is well; but if you conceal them and give them to On the other side of this issue, anonymous the poor, that is better for you,” the Zakat contributions have long been a major source Foundation of America explains on its of support for groups focused on expanding website that, “Islam places a great emphasis gay rights. A recent report documenting and reward on giving charity in secret…”9 the history of funding for LGBTQ causes Similarly, the term for charitable giving in identifies the top ten funders on the issue Hinduism is da¯n, and anonymous giving from 1970 through 2010, which includes an is called gupt da¯n, which is considered to extended period of time when giving to gay be “one of the most holy forms of da¯n,” rights causes was far more controversial than according to a leading scholar on giving in today. The single largest giver by far, according different religious traditions.10 to the report? “Anonymous Funders,” who provided over $90 million compared with

4 The Philanthropy Roundtable Anonymous contributions have long been a major source of support for groups focused on expanding gay rights.

the second-place funder, who gave just under most of what they do is to deny the $78 million.13 existence of climate change, and we thought that stood in stark contrast to the Many examples of retribution exacted against image that GM was trying to develop,” donors relate to election campaigns. But there said Souweine. have also been instances that directly involve charitable giving. For example, The Heartland Souweine says his group began flooding Institute is a free-market think tank located GM’s Facebook site with requests to stop in the Chicago area organized as a 501c3 funding Heartland, and that they believed charity that, among other issues, has taken GM would respond because of their respect a skeptical view of what is often described for customer loyalty and because they were as the consensus view on global warming. sensitive to having taken so-called bailout When the organization’s donor list was stolen funds from the federal government.15 and made public in 2011, activists opposed Another example is the case of the corporate to Heartland’s work on global warming foundation for Berkshire Hathaway, the organized significant campaigns demanding conglomerate founded by . its corporate donors cut off funding to the It ceased its support for contraception- and group or face consumer boycotts. As a result, abortion-related causes after boycotts were Heartland lost several donors.14 threatened against one of its many companies, One organization that spearheaded the Pampered Chef.16 While Buffett’s family effort to get donors to end their support foundation continued to make such grants, it of Heartland was Forecast the Facts (now insisted grantees not publicize or in any way ClimateTruth.org). A Los Angeles Times article discuss the gifts. While publicly available tax explained what happened once the group records revealed large-scale giving to the area had Heartland’s donor list in its possession, of contraception- and abortion-related causes, as described by its campaign director, there was little indication of what projects or Dan Souweine: activities were specifically being funded.17

“[GM is] out there very actively pushing It isn’t only religious conviction and concerns a green image with high-mileage cars and about reprisals that compel or inspire many the Chevy Volt… So funding Heartland, to keep their generosity private. Many donors

Protecting Donor Privacy 5 simply prefer to remain anonymous because iconic red collection kettles, with the donors they do not wish to receive unsolicited in nearly all cases managing to maintain their requests for contributions, which can be anonymity.22 For example, in Lake County, voluminous in some cases. George Eastman, Illinois, more than 400 gold coins have been founder of Eastman-Kodak, gave $10 million dropped into Salvation Army kettles over the to the Massachusetts Institute of Technology past 25 years,23 and similar donations are made in 1912 but insisted that his name be kept every year across the country. anonymous, in part to avoid more requests for Keeping the names of some donors anonymous funding. , writing several can also be an effective fundraising strategy. years later about the unmasking of his giving, Edith and Peter O’Donnell donated $135 noted that he “had abundant occasion to million to the University of Texas beginning regret that his identity is no longer a secret… in 1983, nearly all of it anonymously.24 The he has become quite aware of the perils beset gifts typically required matching funds to be the paths of those pursued by the advocates of raised, and because of their anonymity (and endless ‘worthy causes.’”18 with the encouragement of the O’Donnells) Joan Kroc, the widow of McDonald’s founder the university was able to attract new donors Ray Kroc, actually closed down her family with the opportunity to have endowed foundation in order to limit charitable professorships, chairs, and fellowships named requests. The New York Times recently noted after the second donor. that “Secrecy was a hallmark of her giving,” Many donors simply prefer to avoid the and the author of a biography of the Krocs spotlight that their giving might attract. The explained that “anonymity was a way to brief online biography of Pittsburgh banker protect herself from the deluge of formal and philanthropist Charles L. McCune, who requests.”19 In 1972, she gave $50,000 to established the McCune Foundation upon his the South Dakota town in which she had passing in 1979, notes that he “gave generously previously lived after it suffered devastating to charitable organizations… while seeking floods, asking only that her giving be kept no public recognition of his philanthropy.”25 anonymous; and she gave $15 million to His distaste for publicity carried past his the North Dakota communities of Grand death, as grantees today are told “McCune Forks and East Grand Forks following floods Foundation grants are provided anonymously, in 1997, again anonymously.20 Two of her a policy in keeping with Charles McCune’s most notable charitable gifts, $225 million to charitable practice of seeking no publicity” National Public Radio and $1.6 billion to the and instructed “Never put the Foundation’s Salvation Army, came after her death,21 when name in the public press. If you wish to give she would no longer be concerned about publicity to the grant please say that it is from unsolicited requests for donations. a source that wishes to remain anonymous” Though Kroc’s generosity to the Salvation and “Do not list the Foundation’s name in Army was public (if posthumous), that audits. Do not list the Foundation’s name (or organization is no stranger to anonymous as Anonymous) on donor plaques, buildings, giving. South African krugerrands, containing walls, and programs. Do not name scholarship a full ounce of gold, and other gold coins are funds for the Foundation and do not reveal routinely donated through the organization’s the source of the funds to the scholarship

6 The Philanthropy Roundtable recipients.”26 However, since McCune is a a platform for a wide range of charitable private foundation, its giving is reported on purposes, and anonymous giving is common its publicly available 990-PF tax filing. at all levels. One Summit Inc. is a charity dedicated to helping pediatric cancer patients, Philanthropists may also prefer not to have and individuals have launched multiple their giving in the public domain because campaign pages on CrowdRise to support it would allow nonprofits to see what the the organization. Donors to the campaigns donor is giving to other organizations. are listed, and among the hundreds of gifts Fundraising consultant Robert Sharpe noted are numerous donations of $25, $50, $75, and in an article on anonymous giving that, “In $100 identified only as “Anonymous.”32 some instances, donors don’t want their gifts to one organization compared to their gifts The ability of donors to nonprofit groups and to another. After making relatively modest causes to remain anonymous if they wish has gifts or reducing their gifts to some charitable long been an important part of philanthropy, interests, donors may wish to conceal larger one that is deeply ingrained among donors gifts and/or make a decision to increase their large and small. It not only allows charitable giving to other organizations.”27 givers to follow their religious teachings, insulate themselves from retribution, avoid Reports listing major donors to a wide variety unwanted solicitations, and duck unwelcome of organizations and causes often list multiple publicity, it also upholds and protects contributors simply as “Anonymous,” and important First Amendment rights of free anonymous giving is common throughout speech and association. the charitable sector as well. The 2015 report for New York’s prominent cancer treatment center Memorial Sloan Kettering lists donors of $100,000 or more, and includes multiple anonymous donors of between $100,000 A Constitutionally and $25 million.28 The annual report of the Protected Right Chicago Symphony Orchestra for 2015 singles out six “generous donors” for “extraordinary Because the rights to associate privately and 29 support,” two of which are anonymous. contribute anonymously to organizations Other recent examples of anonymous giving are intrinsic to effective exercise of the First include a new homeless shelter in Florence Amendment, the Supreme Court has long County, South Carolina, made possible by a recognized that compelled disclosure of donors single anonymous gift of $350,000 given in is only acceptable under narrow circumstances. 30 late 2016 to two local nonprofits. When In 1956, the attorney general of Alabama Mitchell Elementary School in Racine, was locked in a dispute with the National Wisconsin, suffered a fire in 2014, an Association for the Advancement of Colored anonymous local resident gave $2,500 to the People (NAACP) over whether the group 31 PTA to help it recover. had to register with the Secretary of State in Anonymous giving isn’t just for those order to conduct business in the state. At the capable of writing large checks. For example, same time, of course, the state was resisting the crowdfunding site CrowdRise offers the NAACP’s efforts to end segregation.

Protecting Donor Privacy 7 “It is hardly a novel perception that compelled disclosure of affiliation with groups engaged in advocacy may constitute [an] effective restrain on freedom of association…”

~U.S. Supreme Court ruling on NAACP v. Alabama

As part of the dispute over state registration, induce members to withdraw from the the attorney general demanded that the Association and dissuade others from joining NAACP turn over its membership list to it because of fear of exposure of their beliefs the state. The NAACP refused, and the case shown through their associations and of the wound up in front of the U.S. Supreme consequences of this exposure.”34 Court. The June 1958 decision remains the Several other cases help further define the cornerstone of jurisprudence on donor and constitutionally-protected right of Americans member privacy, with the Court ruling that to keep their donations to charitable entities the attorney general’s demand violated the private in most cases, three of which stand out. freedom of association guaranteed under the First Amendment and applied to the The first case, Buckley v. Valeo in 1976, state under the due process clause of the upheld a disclosure requirement for donors Fourteenth Amendment. to political campaigns, political parties, and political action committees, but indicated “It is hardly a novel perception that compelled that this was a narrow exception to the disclosure of affiliation with groups engaged principles upheld in NAACP v. Alabama. in advocacy may constitute [an] effective The Court noted concerns about disclosure restraint on freedom of association…This deterring the exercise of First Amendment Court has recognized the vital relationship rights but ruled that disclosure of campaign between freedom to associate and privacy contributions provided the public with in one’s associations,” Justice John Marshall valuable information about candidates, helped Harlan II wrote in the court’s unanimous to deter both real and perceived corruption, opinion upholding the right of the NAACP and aided in enforcement of contribution to keep its membership private.33 limits, all of which it characterized as He also noted that “on past occasions, “substantial governmental interests” sufficient revelation of the identity of its rank-and- to “outweigh the possibility of infringement” file members has exposed these members to of First Amendment rights.35 economic reprisal, loss of employment, threat Shortly after the Buckley decision, the of physical coercion, and other manifestations Court affirmed just how narrow the ruling of public hostility… [C]ompelled disclosure was regarding disclosure. Citing threats of of petitioner’s Alabama membership… may

8 The Philanthropy Roundtable harassment and reprisal, the Socialist Workers Activists and Attorneys ’74 Campaign Committee sued to avoid having to reveal its contributors under Ohio’s General Threaten Donor campaign finance law. Writing for the court Privacy in 1982, Justice Thurgood Marshall began his majority opinion by noting that, “The Constitution protects against the compelled There have always been efforts to unmask disclosure of political associations and the donors behind some large gifts to charity. beliefs.”36 He further wrote of “substantial Joan Kroc was identified as the source of evidence of both governmental and contributions to support flood-ravaged private hostility toward and harassment of communities in North Dakota after a reporter SWP members and supporters” including traced the tail numbers of her private jet “threatening phone calls and hate mail, the to determine she had been in town shortly burning of SWP literature, the destruction of before the announcement of the gift and was 39 SWP members’ property, police harassment likely the donor. Chuck Feeney, a founder of a party candidate, and the firing of shots of a duty-free shopping chain who succeeded at an SWP office. There was also evidence in giving away hundreds of millions of dollars that in the 12-month period before trial, 22 anonymously, only revealed his generosity SWP members, including four in Ohio, were publicly when unrelated court proceedings fired because of their party membership.”37 As concerning his business would have exposed a minor party with little chance of electoral his giving to the public. George Eastman’s success, the court ruled that the Socialist anonymous support for the Massachusetts Workers Party was exempt from having to Institute of Technology in the 1910s, identified reveal its members and donors. only as a gift from “Mr. Smith,” prompted a great deal of guessing about the real name of In 1995, the Supreme Court further expanded the donor and even inspired a song by students its defense of the right to remain anonymous, about their mysterious benefactor.40 He went observing that “the interest in having public with his giving in part because it anonymous works enter the marketplace involved the transfer of a large amount of his of ideas unquestionably outweighs any stock and he assumed it would be discovered public interest in requiring disclosure as a that he was the benefactor.41 condition of entry” in a case concerning unsigned handbills opposing a local school In more recent years there has been a tax measure.38 clamor by some to erode or even eliminate protections for anonymous giving to 501c3 Taken together, these and other Supreme nonprofit organizations. David Callahan at Court rulings protect the freedom of donors Inside Philanthropy, a leading critic of donor to remain anonymous consistent with their privacy, recently wrote the following: own preferences and convictions in all but a narrow category of election-related giving. Recent years have seen the rapid growth of a shadow giving system that funnels Yet today, the freedom for philanthropists billions of dollars in gifts in ways that leave to decide whether to remain anonymous is no fingerprints… Even today’s biggest under assault. philanthropists only have to disclose their

Protecting Donor Privacy 9 identities if they so choose, and more are any given controversial cause, you’ll find opting to remain behind a veil of secrecy nonprofit leaders and staff who are public- — including many who are pushing for facing and visible. If they can take the heat, public policy changes that affect all of us… the donors backing them should be able to do the same. And if the donors can’t, When wealthy donors speak loudly in they can choose not to give. A little less the public square, using nonprofit proxies, philanthropic money flowing into today’s citizens deserve to know who they are, polarized policy and advocacy battles along with what motives they may have probably wouldn’t be a bad thing.44 — and all the more so when donors are using tax-subsidized dollars. There is a For Callahan, the simplest way to get at the compelling public interest at stake here, one names of donors is to mandate that Schedule that trumps the ideal of donor privacy. Too B of the 990 tax form filed by most nonprofits often, it has turned out that such privacy is with the IRS be made public. This document desired for the wrong reasons…42 lists the name, address, and amount given by each major donor to each charity. These are Callahan states that he isn’t interested in considered confidential tax documents,45 and removing donor privacy for “traditional the IRS has stiff penalties for unauthorized charitable organizations such as hospitals and release of this sensitive information and museums,” but that’s an almost meaningless a generally good track record of keeping assertion. For example, nearly every nonprofit it confidential (though this didn’t stop an hospital lobbies at the local and state level, IRS employee from leaking the Schedule B and most are members of national trade of the National Organization for Marriage associations that engage in the sort of public in 2012).46 policy advocacy and debate that he finds so problematic. Museums and most other It appears that at least a couple of state “traditional” charities would be in the attorneys general have gotten similar ideas same situation. The American Alliance of to Callahan’s in recent years. In 2006, New Museums, for example, has more than 35,000 York Attorney General Eric Schneiderman members and says on its web site that it began to demand that the annual reports of “has been bringing museums together since state-registered charities include the names, 1906, helping to develop standards and best addresses, and total contributions of their practices, gathering and sharing knowledge, major donors (in other words, the Schedule and providing advocacy on issues of concern B). Prior to 2006, it was common for charities to the entire museum community.”43 to submit a redacted Schedule B with the names and addresses of donors blacked out He also admits that he finds reduced charitable (or exclude it entirely) with their state filings, giving a desirable outcome, at least regarding and a number of charities continued that organizations that engage in some public practice. By 2013, organizations that were not policy advocacy: including complete Schedule Bs with their As for disclosure-related fears of donors, I New York annual reports began to receive don’t see a clear solution here, except to notices of filing deficiencies from that state’s ask them to live with it on those occasions Charities Bureau. that arise. Or perhaps allow waivers. On

10 The Philanthropy Roundtable Similarly, former California Attorney General of life,” and is “fundamental not only to (and now U.S. Senator) Kamala Harris began our civil society but also to our republican in 2010 to demand unredacted Schedule Bs form of government. Through charitable as part of the annual reporting requirement contributions Americans exercise some for charities that solicit contributions in that of their most cherished constitutionally state. This new mandate did not result from protected rights…freedom of speech, freedom any change in law or regulation, and Harris’ of association, and freedom of religion.” The office stated only that donor disclosure “helps brief concluded that, without a clear and protect the public against fraud.” compelling reason, “no government agency should compel a charity to identify its donors Both of these actions have been controversial, where, as here, the risk of public disclosure… and several lawsuits have been filed is grave.”48 challenging them. In 2014, Citizens United and the Citizens United Foundation brought Though CCP lost in the district and appeals suit against the New York Attorney General’s courts, and the U.S. Supreme Court declined office on the grounds that mandatory donor to hear an appeal, the U.S. Court of Appeals disclosure by New York State violated for the Ninth Circuit did allow in its ruling First Amendment rights of free speech that an “as applied” challenge might succeed and association and conflicted with federal if a plaintiff could demonstrate concrete law ensuring the confidentiality of donor harms to itself as a result of the donor information. The challenge lost at the district disclosure policy. court level and was recently appealed.47 A later “as-applied” challenge by the Challengers in California have fared Americans for Prosperity Foundation somewhat better than their counterparts in (AFPF) had more success. In February the Empire State. A March 2014 complaint 2015, a temporary injunction was granted from the Center for Competitive Politics by U.S. District Court Judge Manuel Real, (CCP) filed in the federal court argued that who noted that AFPF had presented clear mandatory donor disclosure violated the First evidence of donor harassment and that the Amendment. This suit was a facial challenge, stated policy of the attorney general’s office which meant CCP argued the policy should to keep donor information confidential be struck down entirely. was insufficient. That policy, he noted, “is not binding and might not withstand legal A number of nonprofit organizations filed challenge under California’s charity act amicus briefs in support of CCP’s petition public inspection law.”49 to the Supreme Court, among them The Philanthropy Roundtable. The Roundtable’s That decision was appealed, and the decision reflected its core belief that Ninth Circuit reversed the lower court philanthropic freedom — the right of decision prohibiting the collection of Americans to choose how and where to donor information, stating that no actual spend their charitable assets — and donor burden on First Amendment rights had privacy are essential to a vibrant and diverse been demonstrated. It did, however, issue a civil society. The brief noted that “charitable preliminary injunction prohibiting public giving is not just a ‘sweetener’ of our quality disclosure of Schedule B. AFPF had lost on

Protecting Donor Privacy 11 Philanthropist Art Pope testified that his giving “caused my family great concern for their safety. It’s led to a threat of assassination about me, it’s led to boycotts of my business.”

the preliminary injunction, but the case would He rejected the claim that the attorney general’s return to District Court for a full bench trial. use for donor data was compelling, noting that “over the course of trial, the Attorney General At that trial, a much more complete picture of was hard pressed to find a single witness who how the attorney general’s office treated donor could corroborate the necessity of Schedule privacy was revealed. Depositions that had B forms in conjunction with their office’s been taken earlier demonstrated that despite investigations.” Judge Real also distinguished the attorney general’s claims of confidentiality, between the election context, where he wrote more than 1,700 unredacted Schedule Bs had that “substantial governmental interests” recently appeared on her office’s website.50 warrant disclosure requirements, and activity Equally damaging was testimony from her not connected to an election where the chief auditor that the Schedule B had never government’s legitimate ends “can be more triggered an investigation and that his team narrowly achieved.” Third, Judge Real cited had consulted Schedule B only five times in the “threats, protests, boycotts, reprisals, and hundreds of investigations over ten years.51 harassment directed at those individuals One of the more disturbing elements of publically associated with AFP.” And finally, he the trial was the testimony of Art Pope, a dismissed the idea that the attorney general philanthropist from North Carolina who would maintain the confidentiality of donor has given to policy-oriented organizations data, citing the 1,778 Schedule Bs that had over the years through his family foundation. been posted on the attorney general’s public He testified that public knowledge of his website, among them the Schedule B for giving “caused my family great concern for Planned Parenthood Affiliates of California. their safety, my safety. It’s led to a threat of “Once…donor information is disclosed,” he assassination about me, it’s led to boycotts of remarked, “it cannot be clawed back.”53 The my business.”52 California attorney general appealed Judge Real’s decision to the Ninth Circuit, and the In April 2016, Judge Real ruled the Schedule case is currently pending. B disclosure requirement unconstitutional as applied to AFPF and granted its motion for a permanent injunction to enjoin the collection of donor data by the attorney general’s office.

12 The Philanthropy Roundtable Legislators Seek to legally intervene in election campaigns, but in February 2017, the U.S. Supreme Court Undermine Anonymous upheld a lower-court ruling applying the Giving disclosure requirement to the Independence Institute’s proposed ads.56

Federal lawmakers have also targeted Meanwhile, politicians, activists, and Schedule B for public disclosure. In February bureaucrats in other places are trying to force 2017, Senator Jon Tester filed legislation that disclosure of the identities of donors to a broad would require the IRS make available upon range of organization types, including 501c3 request and put online the Schedule B of groups, through legislation, ballot measures, or any organization that “has or plans to spend administrative rules. A state referendum that money attempting to influence the selection, passed in South Dakota in 2016 could have nomination, election, or appointment of any forced charities to reveal their donors for such person to a public office” or that is judged acts as hosting a forum on agricultural issues to have engaged in either an independent where elected officials are invited speakers, or expenditure or electioneering communication notifying supporters that an elected official in support of or opposition to a candidate.54 has introduced legislation relevant to their interests.57 A state judge enjoined the law as On its face, this would seem to exempt unconstitutional shortly after it was passed,58 charities organized as 501c3 entities, which however, and in February 2017, South are not allowed to intervene in campaigns Dakota’s governor signed legislation repealing for public office. Unfortunately, the way the law.59 campaign finance laws are written, they often encompass speech by charities related Other states have also considered legislation to issues, not candidates or elections. This is that would strip away donor privacy for exactly what happened to the Independence charitable giving this year. Far-reaching Institute, a Colorado-based think tank legislation in New Mexico could, for example, organized under section 501c3 of the federal require a church to report its donors if its tax code and thus prohibited from intervening pastor references elected officials in a sermon, in elections. In 2014, it wanted to pay for radio even just to ask congregants to pray for them advertisements encouraging Coloradoans to as they carry out their official duties.60 contact their two senators and urge them to A bill filed in South Carolina at the beginning support criminal justice reforms, something of 2017 could likewise force charities to well within the scope of proper activity for disclose their donors publicly if they were to a charity. urge the state’s residents to contact their state But because one of the state’s two senators legislators on any issue.61 In Connecticut, was running for re-election at the time, the legislation was introduced that would require Independence Institute would have been a handful of charities that operate charter forced to reveal its major donors if it had run schools to reveal their donors;62 and a bill the ads.55 It decided not to run the ads and in Oklahoma would require disclosure of sued to challenge the application of campaign donors to organizations that simply offered finance law to organizations that cannot

Protecting Donor Privacy 13 educational material regarding any state But there are more than enough modern cases ballot initiative.63 in which charitable supporters of unpopular causes, or those seen as being affiliated with These are only a few of the more recent efforts them, have faced the wrath of others once to curb or eliminate the right of individual that support has become public. That wrath donors to retain their privacy when making can often be directed, or at least inspired, by charitable contributions. Proponents of these government officials. efforts often suggest this right is no longer needed, and that the concerns of donors are Probably the most obvious example of this outdated or overblown, or at least outweighed is the case of brothers Charles and David by some asserted public interest. But a closer Koch, who have helped fund a broad range look at the current world of philanthropic of nonprofit organizations ranging from giving and our polarized society demonstrate Memorial Sloan Kettering Cancer Center just the opposite. to the libertarian-oriented Cato Institute, as well as organizations that engage in political activity. Although their general ideological perspective has long been known — David Is Anonymity Still Koch was the Libertarian Party’s candidate for vice president in 1980 — in recent years Needed? they have come under withering assault from officeholders, individuals, and organizations Some might wonder if donor anonymity that oppose their agenda. Both President is still necessary. After all, it is not 1956 any Obama and then-Senate Minority Leader longer, when the Alabama attorney general’s Harry Reid singled the brothers out for efforts to get the NAACP’s membership attention, with the latter making more than list posed obvious and imminent dangers to 130 documented references to them in citizens exercising their First Amendment Senate floor speeches, interviews, and other right to freely associate. Nor is it 1835 again, public comments.65 when President Andrew Jackson, angered by the attempts of northern abolitionists to As a result of their prominence, the Kochs circulate their antislavery newsletters among and their companies routinely face death community leaders in the South, urged threats, cyber attacks from the hacker group Postmaster General Amos Kendall to take “Anonymous,” and boycotts aimed at the down the names of subscribers and make them many consumer products their companies public so that “every moral and good citizen make. In order to facilitate boycotts, there is will unite to put them in coventry, and avoid even an app people can use to identify the their society” (in those days, “subscribers” products made by Koch-owned companies as 66 was often analogous to “donors”).64 Although well as other major corporations. few, if any, southerners had actually ordered Because of this attention, the brothers have the abolitionist tracts they were receiving, to hire armed security to keep them, as well Jackson’s intentions were clear: donors to an as their families, employees, and business unpopular cause were to be identified and operations, safe. While they seem willing and then ostracized, or worse. able to bear the costs and endure the vitriol

14 The Philanthropy Roundtable “Any time a donor appears and is public with us that donor gets attacked.”

~Atlanta, Georgia homeless shelter director

directed at them for their charitable and other nearly $580,000, several anonymous donors giving, not all philanthropists are so capable contributed enough to allow them to pay off and resolute. the bill. The shelter’s director explained to local media the reason the donors wished to remain Retaliation from elected officials is a serious anonymous: “Any time a donor appears and is concern for many philanthropists as well. A public with us that donor gets attacked.”67 popular restaurant chain was targeted by local government officials over the owner’s family’s On occasion it can be private entities giving to organizations seen as hostile to gay collaborating with or pressuring elected rights. In Boston, Chicago, and Denver, city officials to take action against donors to council members and mayors all threatened to causes and organizations they find troubling. forbid the company from opening restaurants For example, the American Federation of in the city over the issue. Teachers pieced together information on the personal philanthropic donations of And it isn’t only on obviously contentious several dozen hedge fund managers who had issues like gay rights that philanthropists may given support to charter schools or public want to avoid the wrath of public officials. The policy think tanks favoring pension reform, Peachtree-Pine homeless shelter in Atlanta, and then threatened to use its influence to Georgia, would not seem at first glance to have state-run pension plans stop investing be a controversial cause. Located in the city’s in their funds.68 According to news reports, business district and housing an average of several of the donors did end their support as 500-700 men, women, and children each a result, and the Rhode Island state pension night, the charity provides a wide range of fund pulled out of one fund whose manager services to those in need, including finding refused to end his giving. According to The more permanent shelter for homeless Wall Street Journal, “Roger Boudreau, a individuals and families. member of the teachers union and an elected But city officials have long targeted the adviser of the Rhode Island fund at the time, shelter for closure and sought to claim the says the donations played a role.”69 land it sits on via eminent domain in order The point is not to argue that philanthropy to build a combined fire and police station on should be completely opaque to all but the the site. In 2014, behind on its water bill by donors, or that there is no reasonable level

Protecting Donor Privacy 15 of transparency that can be expected from the left-wing publication Mother Jones as the charitable sector. But it’s important to “The ATM of the Conservative acknowledge and understand that while Movement;”70 and an article singling out some level of transparency is appropriate, this the Democracy Alliance and the Tides concept can go too far and inflict real and Foundation for criticism in the conservative lasting damage on America’s vibrant culture Washington Free Beacon referring to of giving. “Progressive billionaires and the dark money philanthropies they have endowed.”71

Additional examples include the book Dark Money by Jane Mayer, which focuses Confusing Politics, extensively on the “interlocking network Government, and Charity of think tanks, academic programs and news media outlets” funded by libertarian 72 It’s worth noting that efforts to curtail philanthropists Charles and philanthropic donor privacy are occurring (primarily 501c3 entities). Even the charitable at the same time as an energetic campaign to arm of the Super Bowl 50 Host Committee bring greater disclosure of spending connected for the 2016 game played in to election campaigns, as well as a growing was accused of accepting “dark money” 73 movement to increase accountability and because it didn’t disclose all of its donors. transparency in government. In many cases, Intentional or not, these and countless it seems these issues have become conflated similar examples blur what should be a in some people’s minds, where language and clear distinction between organizations that concepts perhaps properly applied to election intervene in political campaigns and those campaigns or government are inappropriately that serve charitable purposes and are barred being applied to the philanthropic sector. from political campaign intervention.

Consider the term “dark money,” referring At the same time the line is blurred between to undisclosed donations to nonprofit political campaigns and charity, the distinction organizations that engage in some election- between charitable organizations and the related spending and coined in the years after government is similarly confused in some the U.S. Supreme Court ruled in Citizens minds. There are serious and often reasonable United v. FEC that corporations, unions, and efforts to bring greater accountability and other organized groups of persons could spend transparency to the operations of government. unlimited amounts of money independently Democracy Web, a project run by the supporting or opposing candidates for office. foundation of former American Federation of Teachers president Albert Shanker, explains Within just a few years, that same term that accountability and transparency in began to be applied to donations made to government is important because, “In a charitable nonprofits. A few examples include democracy, the principle of accountability , a donor-advised fund that holds that government officials — whether typically makes grants to conservative- and elected or appointed by those who have been libertarian-oriented think tanks and other elected — are responsible to the citizenry 501c3 nonprofits, which was described by for their decisions and actions. In order that

16 The Philanthropy Roundtable officials may be held accountable, the principle at one high school who would be attending of transparency requires that the decisions and a specific college. Based on the information actions of those in government are open to required by the would-be foundation as part public scrutiny and the public has a right to of the determination process, it turned out access government information.”74 that only a single student qualified for the scholarship — the son of the couple who There is certainly a place in philanthropy established the foundation.75 for accountability and transparency. Boards of directors hold staff accountable for the But accountability and transparency in work of charities; donors hold grantees philanthropy are substantially different from accountable for executing the programs those concepts when applied to election that have been funded; organizations like campaigns and government. As the Democracy Charity Navigator, the National Committee Web definition indicates, accountability is a for Responsive Philanthropy (on the left), vital and explicit component of democracy, and the Capital Research Center (on the and transparency is a requirement for that right) provide the nonprofit community and accountability. Philanthropy is a private public with information and analysis aimed and voluntary activity, however, and as at fostering what they view as more effective the extensive history of charitable donor and just philanthropy; and the government anonymity demonstrates, forcing giving to establishes and enforces minimum standards be more public is likely to damage the sector to ensure charitable dollars are used for and result in less giving, not to mention charitable purposes. infringements on the First Amendment rights to speak and associate freely. And because donors in most circumstances are able to deduct charitable contributions It should also be noted that in the context for tax purposes, it isn’t too much to ask that of charitable donor privacy, the term there be some safeguards such as a modest accountability is often little more than a degrees of transparency to ensure the money euphemism for boycotts and public pressure being given away isn’t secretly being used to campaigns, at a minimum, aimed at forcing the benefit of a donor attempting to skirt his donors to controversial and unpopular causes or her tax obligations. For example, nonprofits to cease their support; transparency is simply a must provide information to the IRS on how tool for facilitating such accountability. But a they spend their money and who their leading basic understanding of the First Amendment donors are. should recognize that the whole point of free speech and free association is that the Private foundations must also disclose their government generally should not hold people donations to the public, in large part to help accountable for what they say or believe, or ensure that funds are not being misused with whom they choose to associate. It might for the personal benefit of those who give even be argued that one of the key attributes to foundations. It was the prohibition on of a free society such as ours is that there are private benefit that in late 2016 caused the a great many things for which Americans IRS to reject the application for tax-exempt generally cannot and should not be held status of a foundation established to provide accountable by our government, such as how college scholarships to graduating students we vote, with whom we socialize, what faith

Protecting Donor Privacy 17 Philanthropy is a private and voluntary activity, however, and as the extensive history of charitable donor anonymity demonstrates, forcing giving to be more public is likely to damage the sector and result in less giving, not to mention infringements on the First Amendment rights to speak and associate freely.

we profess (or decline to profess), and where While many Americans, and perhaps most, we choose to direct our philanthropy. are willing to tolerate such behavior in the rough-and-tumble world of politics, it needs Calls for greater accountability and to be asked: Are Americans similarly willing transparency in philanthropy also ignore to embrace it in the world of philanthropy the fact that philanthropy must be largely and charity? (though not entirely) unaccountable to the government if it is to be anything more than an appendage of the state, unable to challenge the status quo. Should donors to environmental groups challenging the Trump Ideology and Donor Administration on climate change policy be Privacy accountable to that very same administration? Should contributors to the cause of same-sex Concern over the dangers of forced disclosure marriage be accountable to the officeholders for charitable giving should be non-partisan they are fighting in court and the legislature? and non-ideological, but it often gets caught up Should the NAACP have been accountable to in arguments connected to campaign finance the State of Alabama while it was attempting regulation and disclosure of donors to groups to end segregation? To ask these questions is, working to either elect or defeat candidates for most, to know and understand the answer. for office. As a result, most calls for forced Boycotting businesses and urging donors disclosure of charitable contributions tend to cease support for controversial causes is to come from Democrats and the progressive wholly protected by the First Amendment, side of the ideological divide, for whom of course, and should be. The question here undoing the Supreme Court’s Citizens United isn’t whether a citizen has the right to decide decision and curbing the amount of money with whom they will and will not do business spent in the political process has become or otherwise interact. Instead, the question a core principle. And the groups taking a is whether the government should force leading role in defending donor privacy are individuals and organizations to reveal their more often associated with conservative and beliefs and associations to the public so that, limited-government causes. simply put, “enemies lists” can be created.

18 The Philanthropy Roundtable (SPN) is an association in its challenge to the ruling that campaign of state-based free-market think tanks, as finance disclosure laws could be applied to well as other organizations generally favoring the Colorado think tank.78 limited government. SPN has launched an Other groups that have become active on this initiative called “People United for Privacy” issue that are typically considered right-leaning that provides information and resources for include the Foundation for Government citizens to understand the importance of Accountability, the Goldwater Institute, and protecting donor privacy, including a series of of course, The Philanthropy Roundtable. videos that help illustrate the issue. Assaults on donor privacy come from political “It is our right to support charities and leaders of both parties. For example, it was interest groups without the government Republican U.S. Senator John McCain who standing over our shoulder and sharing the teamed up with Democrat Russ Feingold to information with the wider world,” the pass the law that muzzled the Independence group states on its website, unitedforprivacy. Institute’s ads calling for criminal justice com, noting as well that, “Just as the right reform, and the legislation described earlier in to pull the curtain closed behind us as we New Mexico, Oklahoma, and South Carolina vote for our chosen candidates is sacrosanct, all have Republican sponsors. so too is our right to support charities and interest groups without the government There are also groups typically seen as either standing over our shoulder and sharing the progressive-leaning or neutral in ideological information with the wider world.”76 alignment that support donor privacy. The American Civil Liberties Union and its state The American Legislative Exchange Council, affiliates have in the past weighed in on the an organization of conservative lawmakers, is side of protecting donor anonymity,79 as has also active on this issue as part of its larger the Alliance for Justice, an organization that effort to defend free speech. In a recently bills itself as “representing a broad array of adopted resolution, the group advises state groups committed to progressive values and legislatures to exempt 501c3 organizations the creation of an equitable, just, and free from campaign finance laws and prohibit society.”80 Independent Sector, an association any state officer or agency from demanding of charities and philanthropic funders, has charities submit their Schedule B forms, as also voiced strong support in the past for well as ensure information about donors is donor privacy. not subject to state public records laws.77 Most notably on the left, the NAACP Legal A third group working to defend donor Defense Fund recently submitted an amicus privacy is the Center for Competitive Politics, brief in the case AFPF v. Becerra. Its brief an organization whose mission is to “promote declares that, “In an increasingly polarized and defend the First Amendment political country, where threats and harassment over rights of speech, assembly, and petition.” the internet and social media have become Though much of its work is in the realm of commonplace, speaking out on contentious political campaign spending, it has also taken issues creates a very real risk of harassment on the issue of disclosure of charitable donors and intimidation by private citizens and and represented the Independence Institute by the government itself… Thus, now, as

Protecting Donor Privacy 19 much as any time in our nation’s history, it is quarters of all charitable giving in the U.S. is necessary for individuals to be able to express done by individuals, most of whom do not have and promote their viewpoints through spare money to hire lawyers, public relations associational affiliations without personally professionals, and personal bodyguards. The exposing themselves to a legal, personal, or same is true for many corporations, at least political firestorm.”81 those that aren’t Fortune 500-sized and do have products to boycott. And even if they did And even David Callahan, a leading proponent — is this really the price we want to impose of limiting charitable donor privacy, recognizes on Americans for contributing money to the very real likelihood that once made charitable causes? public, many contributors will be exposed to harassment, threats, and retribution. He wrote the following in early December 2016: With all branches of the federal government Donor Anonymity is in conservative hands, progressive civil society will be a central locus of resistance Worth Protecting to the Trump agenda…. There are numerous reasons why individuals Who’ll be footing the bill for much of prefer to keep their charitable contributions this work? Places like Ford and the private. Some of the more obvious reasons Open Society Foundations, as well as have been recounted in this piece, such as top progressive philanthropists like Tom religious conviction, a desire for privacy, and Steyer and the partners of the Democracy concern about retribution from either citizens Alliance… An obvious strategy of the or public officials who find the work of some Trumpist right might be to try to intimidate charities objectionable. funders into not backing the kind of hard- hitting opposition work that this moment An episode of the television series “Gilmore requires…. Girls” provided one humorous illustration of a less obvious reason why some might The federal government could join that prefer anonymity. In the show, the wealthy attack, too… It’s not a stretch to imagine grandparents of Rory Gilmore announce to that the right’s newly bolstered inquisitorial her, with great enthusiasm, that they will be state apparatus will come to fix its attention donating a sizeable amount of money to Yale on the philanthropic left…82 University in her name, with the intention of getting a building named for her. Rory, Callahan notes that for foundations, the risks still an undergraduate at Yale, is horrified at are modest: the prospect that her classmates might take They have plenty of money to lawyer up, classes in the Rory Gilmore Political Science hire PR firms, and even pay for private Building or attend performances at the security if it comes to that…They don’t Rory Gilmore Auditorium. Acknowledging have products to boycott.83 the notion that much of philanthropy is controversial to someone, the idea of the But only a small percentage of donors to Rory Gilmore Medical Research Center is charity are foundations. More than three- offered by the grandfather only to be swiftly

20 The Philanthropy Roundtable rejected by the grandmother, who notes, generally range from simple curiosity about “No, that sounds like monkey research, who is giving to the desire by some to build people will picket!” what amounts to an “enemies list,” allowing them to know whom to target for harassment, As fundraising consultant Robert Sharpe whom to boycott, and whom to ostracize from wrote in a 2009 article on anonymous polite society. Neither of these arguments, charitable giving, “a donor may wish to nor anything lying between them such as remain anonymous out of concern that a misapplied notions of “accountability” or gift could bring unwelcome attention to a “transparency,” justifies eliminating the right child or other loved one who is a student.”84 of philanthropists to keep their giving private. Though in this fictional and fanciful case it’s Only in the most compelling circumstances, Rory’s grandparents’ money that would be such as an active criminal investigation funding the edifice, it does illustrate one of into a specific charity or donor, should this many reasons a person might rather her name important right be open to curtailment. not be associated with a charitable gift. It also makes a key point regarding donor privacy: So we don’t have to know why George everyone has reasons for wanting to keep Michael opted to keep his charitable giving philanthropic giving out of the public eye (or anonymous — it is enough to know he in it, if that is the decision), some of which preferred to do it that way, that it was his right may seem compelling, others less so. to do so, and that it is a right that should not be lightly considered or tossed aside. Just as the right to free speech covers both finely written manifestos on matters of great national import and hastily composed Facebook posts musing on whether Sammy Hagar or David Lee Roth was the superior vocalist for the rock band Van Halen, so too the right to donor privacy protects Americans who have a wide range of motivations in keeping their giving private. Whether it is a concern about loss of employment, fear of angry politicians and citizens exacting retribution, trying to fulfil religious convictions, a reluctance to overshadow the organization’s work, or simply trying to avoid the embarrassment of walking by the eponymous Rory Gilmore Astronomy Building with the name in 30-foot lettering (which appears to be what the grandparents in settled on), the First Amendment requires us to respect this right.

Though some today would diminish or eliminate the right of charitable donors to remain anonymous, the arguments offered

Protecting Donor Privacy 21 Endnotes 17 Ibid 18 William Chenery; “Philanthropy Under a Bushel: George Eastman, Kodak Manufacturer and Music 1 Keely Lockhart, “George Michael’s incredible acts Lover, Long Kept Big Gifts Secret,” March 21, 1920, of kindness revealed following his untimely death,” The New York Times December 26, 2016, The Telegraph 19 Paul Sullivan, “Kroc’s Giving, Like McDonald’s 2 Maya Oppenheim, “George Michael worked at Meals, Was Fast and Super-Sized,” January 20, 2017, a ‘homeless shelter’ but asked people to keep it The New York Times secret,” December 27, 2016, The Independent 20 Ibid 3 Jim White, “Selling his soul, with good cause,” April 21, 1993, The Independent 21 Lisa Napoli, “Meet the Woman Who Gave Away the McDonald’s Founder’s Fortune,” December 22, 4 “Maimonides Eight Levels of Charity: Mishneh 2016, Time Torah, Laws of Charity, 10:7–14” available at Chabad.org, http://www.chabad.org/library/ 22 Jack Zavada, “Salvation Army’s red kettles turns coin article_cdo/aid/45907/jewish/Eight-Levels-of- into compassion,” February 6, 2017, ThoughtCo.com, Charity.htm available at https://www.thoughtco.com/salvation- armys-red-kettles-700094 5 Matthew 6:1 and 6:3, New King James Version of the Holy Bible 23 Kelly Kane, “7 gold coins dropped in suburban Salvation Army kettle,” December 17, 2014, NBC 5 6 Michelle Boudin, “Homeless Person Donates 18 Chicago Cents to a Church, Leaves Touching Note,” April 30, 2015, People 24 “Credit where it’s due,” July 2, 2013, University of Texas, available at https://giving.utexas. 7 Michelle Boudin, “Homeless Man Who Donated edu/2013/07/02/credit-where-its-due/ 18 Cents to Church Wants to Remain Anonymous,” May 1, 2015, People 25 McCune Foundation, available at http://www. mccune.org/ 8 Ibid 26 McCune Foundation, “policies” page, 9 “Giving Charity in Secret & Publicly” available at available at http://www.mccune.org/ Zakat Foundation of America, https://www.zakat. foundation:Website,mccune,policies org/en/giving-charity-secret-publicly/ 27 “Behind Closed Doors: The Rise of Anonymous 10 Michael Barnett, Janice Gross Stein; Sacred Aid: Faith and Private Giving,” August 1, 2009, The Sharpe & Humanitarianism, Oxford University Press, 2012, p. Group, available at http://sharpenet.com/give-take/ 144 behind-closed-doors-rise-anonymous-private- 11 “Mozilla CEO resignation raises free-speech issues,” giving/ April 4, 2004, Associated Press, available at http:// 28 2015 Annual Report of Memorial Sloan Kettering www.bostonherald.com/business/technology/ Cancer Center, pp. 72–79, available at https:// technology_news/2014/04/mozilla_ceo_ www.mskcc.org/sites/default/files/node/125230/ resignation_raises_free_speech_issues document/2015-annual-report_0.pdf 12 Jim Carleton, “Gay Activists Boycott Backers of 29 2015 Annual Report of the Chicago Symphony Prop 8,” December 27, 2008, The Wall Street Journal Orchestra Association, p. 9, available at https://cso. 13 Anthony Bowen, “Forty Years of LGBTQ org/globalassets/about/annualreport_14-15.pdf Philanthropy: 1970 – 2010,” January 2012, Funders 30 Jamarlo Philips, “Florence homeless shelter gets for LGBTQ Issues, p. 4 $350k from anonymous donor, but still seeks 14 Conversation with Joe Bast, president and CEO of donations,” January 1, 2016, WBTW News 13 The , December 21, 2016 31 Denise Lockwood, “Anonymous Donor Gives 15 Dean Kuipers, “GM pulls support for Heartland $2,500 After Mitchell Elementary Fire,” February Institute,” March 30, 2012, Los Angeles Times 27, 2014, Racine County Eye 16 Karen Weise, “Warren Buffett’s Family Secretly 32 Page for One Summit, Inc. located at CrowdRise Funded a Birth Control Revolution,” July 30, 2015, site, available at https://www.crowdrise.com/ Bloomberg OneSummit2017Boston/fundraiser/onesummitinc

22 The Philanthropy Roundtable 33 NAACP v. Alabama, 357 U.S. 462 (1958) 51 Ibid 34 Ibid 52 Bonnie Eslinger, “Koch Bros. Group Donor Testifies He Got Death Threats,” February 26, 2016, 35 Buckley v. Valeo, 424 U.S. 64 (1976) Law360.com, available at https://www.law360.com/ 36 Brown v. Socialist Workers Party Campaign ’74 trials/articles/763367/koch-bros-group-donor- Committee, 459 U.S. 91 (1982) testifies-he-got-death-threats 37 Ibid at 459 U.S. 99 53 Ruling of Judge Manuel Real, 182 F.Supp.3d 1049 (2016), available at http://www.leagle. 38 McIntyre v. Ohio Elections Commission, 514 U.S. 342 com/decision/In%20FDCO%2020160421E36/ (1995) AMERICANS%20FOR%20PROSPERITY%20 39 “McDonald’s Heiress Named Flood Victims’ FOUNDATION%20v.%20HARRIS Benefactor,” May 20, 1997, Associated Press 54 Text of S. 300, “Sunlight for Unaccountable 40 Biography of George Eastman on the web site of Nonprofits Act,” available at https://www.congress. Kodak, available at http://www.kodak.com/corp/ gov/bill/115th-congress/senate-bill/300/text aboutus/heritage/georgeeastman/default.htm 55 Case information available at: http://www.fec.gov/ 41 “MIT’s most famous donor, “Mr. Smith” — George pages/fecrecord/2016/december/indinstvfecdct. Eastman,” MIT Museum, available at http:// shtml museum.mit.edu/150/72 56 Kenneth Doyle, “Supreme Court backs FEC 42 David Callahan, “The Price of Privacy: Four disclosure rules,” February 28, Bloomberg BNA Problems With Anonymous Giving — and a Case 57 Eric Wang, “Analysis of the South Dakota for Reform,” November 17, 2016, Inside Philanthropy Government Accountability and Anti-Corruption 43 American Alliance of Museums, available at http:// Act,” August 25, 2016, Center for Competitive www.aam-us.org/about-us Politics, available at http://www.campaignfreedom. org/wp-content/uploads/2016/08/2016-08-23_ 44 Ibid at note 41 Wang-Analysis_SD_IM-22_South-Dakota- Governmen-Accountability-and-Anti-Corruption- 45 “Public Disclosure and Availability of Exempt Organizations Returns and Applications: Act.pdf Contributors’ Identities Not Subject to Disclosure,” 58 “Court: Measure on ethics, campaign finance, IRS web site, information obtained April 18, unconstitutional,” December 21, 2016, KNBN 2017, available at https://www.irs.gov/charities- NewsCenter1 non-profits/public-disclosure-and-availability-of- 59 exempt-organizations-returns-and-applications- “Gov. Daugaard signs bill to repeal Initiated contributors-identities-not-subject-to-disclosure Measure 22,” February 2, 2017, KSFY News

60 46 Mackenzie Weinger, “IRS pays $50K in Brad Smith, “Constitutional and Practical Issues confidentiality suit,” June 24, 2014, Politico with New Mexico Senate Bill 96,” March 14, 2017, Center for Competitive Politics, available at 47 Chauncey Alcorn, “Citizens United Fails to Make http://www.campaignfreedom.org/2017/03/14/ Its Case For Donor Privacy,” August 30, 2013, constitutional-and-practical-issues-with-new- Fortune mexico-senate-bill-96/ 48 Brief of The Philanthropy Roundtable, pp. 11, 61 Eric Wang, “Analysis of South Carolina S. 255: An 14 available at http://www.scotusblog.com/ Unconstitutional Bill Seeking to Reshuffle the wp-content/uploads/2015/09/Philanthropy- Titanic’s Deck Chairs – After the Ship Has Sunk Roundtable-Amicus-Harris.pdf Already,” February 9, 2017, Center for Competitive Politics, available at http://www.campaignfreedom. 49 Steven Greenhut, “Court ruling reinforces rub against Harris,” Feb. 23, 2015, San Diego Union- org/2017/02/09/analysis-of-south-carolina-s- Tribune 255-an-unconstitutional-bill-seeking-to-reshuffle- the-titanics-deck-chairs-after-the-ship-has-sunk- 50 “California Enjoined From Requiring Schedule already/ B with Registration,” May 2016, Don Kramer’s 62 Nonprofit Issues, available at http://www. Text of HB 7206, available at https://www.cga. nonprofitissues.com/article/california-enjoined- ct.gov/2017/TOB/h/2017HB-07206-R00-HB. requiring-schedule-b-registration htm

Protecting Donor Privacy 23 63 Matt Nese, “Significant Constitutional and Practical 74 Democracy Web, available at http://democracyweb. Issues with Oklahoma Senate Bill 579,” April 4, org/accountability-principles 2017, Center for Competitive Politics, available at 75 Peter J. Reilly, “IRS Denies Exempt Status To http://www.campaignfreedom.org/2017/04/04/ Scholarship Fund Targeted To Founder’s Child,” significant-constitutional-and-practical-issues-with- January 1, 2017, Forbes oklahoma-senate-bill-579/ 76 People United for Privacy, available at http:// 64 Jennifer Rose Mercieca, “The Culture of Honor: unitedforprivacy.com/learn-more/ How Slaveholders Responded to the Abolitionist Mail Crisis of 1835,” Spring 2007, Rhetoric & Public 77 American Legislative Exchange Council, available at Affairs, Vol. 10, No. 1, p. 66 https://www.alec.org/model-policy/resolution-in- support-of-nonprofit-donor-privacy/ 65 “134 Times Harry Reid’s Railed Against the Koch Brothers,” YouTube video produced by the 78 Center for Competitive Politics, available at http:// Washington Free Beacon, available at https://www. www.campaignfreedom.org/external-relations/ .com/watch?v=vP7V0hrt1aw disclosure/ 66 Clare O’Connor, “New App Lets You Boycott Koch 79 “ACLU Letter to the House Urging a ‘No’ Vote Brothers, Monsanto And More By Scanning Your on the DISCLOSE Act,” June 17, 2010, available Shopping Cart,” May 14, 2013, Forbes at https://www.aclu.org/letter/aclu-letter-house- urging-no-vote-disclose-act 67 “Anonymous donors help pay water bill for homeless shelter,” September 26, 2014, WSB TV12 80 Alliance for Justice, available at http://www.afj.org/ about-afj 68 “Brody Mullins, Teachers Union and Hedge Funds War Over Pension Billions,” June 28, 2016, The Wall 81 Amicus brief of the NAACP Legal Defense and Street Journal Education Fund, Americans for Prosperity Foundation v. Becerra, filed in the Unites States Court of Appeals 69 Ibid for the Ninth Circuit on January 27, 2017, pp. 4-5 70 Andy Kroll, “Exposed: The Dark-Money ATM of 82 David Callahan, “Prime Target: Will Foundations the Conservative Movement,” February 5, 2013, Come Under Attack in the Age of Trump?” Mother Jones December 4, 2016, Inside Philanthropy 71 Joe Schoffstall, “The People and Groups Behind 83 Ibid the ‘Climate Justice’ Push,” December 8, 2015, Washington Free Beacon 84 “Behind Closed Doors: The Rise of Anonymous and Private Giving,” August 1, 2009, The Sharpe 72 Alan Ehrenholt, “‘Dark Money’ by Jane Meyer,” Group, available at http://sharpenet.com/give-take/ January 19, 2016, The New York Times behind-closed-doors-rise-anonymous-private- 73 Joe Garafoli, “Super Bowl committee raising giving/ millions, with little transparency,” January 2, 2016, San Francisco Chronicle

24 The Philanthropy Roundtable The Philanthropy Roundtable is America’s leading network of charitable donors working to strengthen our free society, uphold donor intent, and protect the freedom to give. Our members include individual philanthropists, families, and private foundations.

About the Author

Sean Parnell is vice president of public policy at The Philanthropy Roundtable. He joined the Roundtable staff in October of 2016. He is responsible for directing legislative, coalition, and communications efforts on policy issues related to charitable giving and philanthropic freedom at the federal and state levels, working with the Alliance for Charitable Reform.

Sean has more than 20 years of experience advocating for causes and candidates, most recently as an independent public policy consultant working primarily for think tanks and advocacy organizations. He previously was president of the Center for Competitive Politics, an advocacy organization focused on the First Amendment’s political rights of speech, assembly, and petition. Parnell also served as vice president for external affairs at The Heartland Institute and as campaign manager and fundraiser for former Congressman Greg Ganske of Iowa. He has written two books, Unbound: The Conscience of a Republican Delegate and The Self-Pay Patient: Affordable Healthcare in the Age of Obamacare.

An Oregon native, Sean lives in Alexandria, Virginia with his wife and son. He is a 1996 graduate of Drake University in Des Moines, Iowa, where he received a bachelor of arts in economics. www.PhilanthropyRoundtable.org www.ACReform.org