Senator Todd Young Highlights the Importance of Donor Privacy

Last month IRS Commissioner nominee Daniel Werfel testified before the U.S. Senate Finance Committee. During questions from committee members, Sen. Todd Young (R-IN) raised an important question about the importance of donor privacy and whether, if confirmed, he would assure charitable stakeholders that personal donor information would not be disclosed by the IRS.  

Young noted

“The U.S. Supreme Court has recognized donor privacy as protected under the First Amendment, from NAACP v. Alabama (1958) to Americans for Prosperity Foundation v. Bonta (2021). Donor privacy is essential to philanthropic freedom and allows donors the right to remain anonymous should they wish. Despite this constitutional right, some groups have advocated for mandatory disclosure of donors. I worry that if we acquiesce to such demands, we risk suppressing philanthropy, an important pillar of our society. We should instead focus on preserving and even expanding vital protections for anonymous charitable giving.” 

In his remarks, Young referenced the ProPublica leak of private citizens’ personal information. In 2021, a breach in IRS records resulted in the confidential tax returns of many Americans being made public. This follows a notable breach of donor privacy in 2013, acknowledged by the IRS, when the personal donor information of a nonprofit organization was leaked. More recently, the IRS inadvertently released the private information of around 120,000 taxpayers. This data was visible on the IRS website for a year before it was identified and taken down. 

In response to Young’s question, Werfel responded: 

“The safety and security of taxpayer data is of paramount importance to me and to the mission of the IRS. In order to fulfill its mission, the IRS must safeguard the information of millions of Americans. If confirmed, I would prioritize this across all workstreams that would come across my desk and work with this Committee to ensure the IRS’s activities are transparent.” 

Misguided calls for donor disclosure in the charitable sector represent a threat to philanthropic freedom and the vibrancy of civil society. Another risk to donor privacy comes from the IRS being weaponized against nonprofits to advance political ends. It is always encouraging to hear support for donor privacy, especially from policymakers and committee members with oversight powers.  

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