Donor privacy is back in the headlines in a big way. Nikki Haley, former South Carolina governor and U.S. Ambassador to the United Nations, is filing a lawsuit against New York State Attorney General Letitia James for allegedly leaking to the press a list of donors to Haley’s conservative nonprofit, Stand for America.
Haley said the materials, which were leaked to Politico, had the official stamp of the state attorney general office on them. Haley has called the leak “a federal tax crime” and has also asked U.S. Attorney General Merrick Garland to investigate. On the issue of whether the leak is a legitimate mistake or has nefarious purposes, The Wall Street Journal points out that Haley’s nonprofit has criticized controversial policies passed in New York in recent history, including the no-bail law. The leak to Politico is an example of cancel culture in action — a blatant attempt to shame the donors to Haley’s nonprofit.
The case highlights yet again the threats donor privacy faces in our tumultuous political environment. In June, California Attorney General Rob Bonta released the personal information of state residents who applied for concealed carry weapon permits. The leak included sensitive information like home addresses, driver’s license numbers, dates of birth and criminal histories. Bonta claims the information leak was accidental, but even so, the breach is another demonstration of highly sensitive information falling through the cracks in California on a politically charged topic.
The privacy breaches are not confined to the state level, either. Also in 2021, an unexplained breach in IRS records security resulted in the publication of confidential tax returns for a number of wealthy Americans by ProPublica. The IRS has also acknowledged a 2013 leak of donor information for those giving to the National Organization for Marriage, a nonprofit that supported laws defining marriage as between one man and one woman. More recently, the IRS on September 2 admitted to inadvertently releasing the private information of around 120,000 taxpayers. The data was visible on the IRS website for a year before it was identified and taken down.
Examples like these continue to mount, as some state attorneys general and government agencies continue to disregard donor privacy. The good news is at least 14 states have passed donor privacy protections in recent years. What’s more, recent court precedent further reaffirms the right to donor privacy. In July 2021, the U.S. Supreme Court handed down its landmark decision in favor of donor privacy, Americans for Prosperity v. Bonta. A majority of justices ruled that California’s dragnet collection of personal information on donors to nonprofit organizations violated the First Amendment.
America has a long-standing tradition of donor privacy, which is essential to a thriving, vibrant and free charitable sector. It is important for a multitude of reasons. Some donors seek anonymity due to moral or religious traditions of humility, or to avoid distracting from the mission of the charities they are supporting. Others seek to avoid unwanted solicitations from other nonprofits. Another common reason for donor privacy is to avoid being potentially targeted for threats, harassment or retaliation.
The bottom line is every American should be able to give freely and privately to tax-exempt organizations without fear of reprisal. That is true regardless of which causes a donor supports or where their political, moral or religious affinities lie. When donor privacy is compromised, all of society suffers. It creates a chilling effect on donors who might otherwise give to worthy causes.