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Court Dismisses Challenge to New York Donor Disclosure Requirement

On August 29, 2016, the United States District Court for the Southern District of New York dismissed in its entirety a complaint against the New York Attorney General filed by Citizens United and Citizens United Foundation, challenging the Attorney General’s policy of requiring charities to disclose the names, addresses, and total contributions of their donors in connection with registration to solicit funds in New York.  The plaintiffs maintained, among other arguments, that this disclosure requirement was unconstitutional under the First Amendment.  The district court rejected all of the plaintiffs’ claims.

The court’s determination concludes litigation initiated several years ago by Citizens United and Citizens United Foundation, which included a motion (denied in 2015) to preliminarily enjoin the Attorney General from enforcing the donor disclosure requirements.  More significantly, the decision falls in line with a decision in the Ninth Circuit, which in May of 2015 upheld a similar requirement by California’s Attorney General in a suit brought by the Center for Competitive Politics.

The decision affirms existing regulations under the New York Executive Law.  These regulations require any charity registering to fundraise within New York State to provide the Attorney General’s Charities Bureau with an unredacted copy of its Form 990 or Form 990-EZ, including Schedule B, which sets forth the name, address, and amounts contributed to the charity by each donor who has given $5,000 or more in money or property during the tax year (subject to certain special rules).  Charities should therefore continue to include Schedule B with their Forms 990 when registering to solicit and when filing annual reports with the Charities Bureau.  The Charities Bureau does not make Schedule B available for public review on its website, but the Charities Bureau has inadvertently posted these schedules in the past (which led, in part, to prior challenges to this filing requirement), so registered charities should periodically check to confirm that Schedule B has not been posted to the Charities Bureau registry site.

We will keep you updated on any further developments.