Policy Foundation Cites Importance of Exempt Org Donors’ Rights

December 9, 2019

Internal Revenue Service
U.S. Department of the Treasury

RE: Guidance Under Section 6033 Regarding the Reporting Requirements of Exempt Organizations, RIN 1545-BN28

Dear Secretary Mnuchin,

Family Policy Foundation is a national pro-family, Judeo-Christian ministry that partners with a network of state-based family policy groups, churches, state legislators, and more. Together, we train statesmen who share our values, encourage our constituents in their right and responsibility to vote, and educate churches and grassroots networks on family-centered policies across the country.

We, along with our allies, represent millions of Americans who believe that research and education to encourage, strengthen and protect American families is critical for the nation across all generations, political trends, or even cultural popularity. We are entirely donor-supported and understand firsthand the vital importance of donor anonymity.

We have also joined our allies in submitting an amicus brief in support of Petitioners Americans for Prosperity and Thomas More Law Center seeking writ of certiorari before the Supreme Court on the issue of donor disclosure in the state of California.¹

We therefore submit this comment in strong support of RIN 1545-BN28, revising requirements for exempt nonprofit organizations related to disclosure of private donor information on Form 990, Schedule B of their annual returns.

Constitutional and Societal Importance of Donor-Funded Nonprofit Organizations

Providing funding for a cause a donor believes in is a means by which the donor exercises her constitutional rights to freedom of speech and association. Donating to a nonprofit also empowers the donor to effectively identify and meet local needs, utilizing expertise and combined resources greater than what she can provide, and in a manner more expedient than a government organization.

By funding a cause, a donor exercises her constitutional right to associate herself with a group dedicated to the cause. She also exercises her constitutional right to freedom of speech and expression through her donation. In a sense, she gives the nonprofit permission to speak on her behalf and act on her behalf on a cause she cares about at a level amplified beyond any single individual. In other words, even if she only has one dollar to give toward her cause, the nonprofit is able to expertly use her dollar to amplify her voice and take greater action on her behalf with the sum of its donations. The freedoms of association and speech are powerful at the nonprofit level and magnified beyond individual rights to a collective assertion of constitutional freedoms.

As nonprofits assert their constitutional rights, speaking and acting on behalf of their donors, they also work to provide a means by which individuals can give back to their neighbors and communities. Nonprofits have strong community relationships and local knowledge, often making them best suited to understanding their communities' needs and best able to find ways to meet them.² This makes them far more responsive to the needs of those they serve than governmental organizations.³

Further, nonprofits provide economies of scale and scope, consolidating overhead costs to provide goods and services for less than an individual would pay.⁴ They possess institutional knowledge and can employ workers with knowledge and expertise targeted to the goals of the nonprofit.⁵ And nonprofits are able to convert monetary contributions into educational opportunities where it is knowledge, not money, that underlies a community need.⁶

Importance of Donor Privacy

Numerous reasons exist for donors to desire privacy when it comes to their charitable giving. Examples include religious reasons (public acclaim is considered to diminish the value of a spiritually motivated gift), a desire to not create expectations of future giving, lack of desire for any public recognition, fear of disapproval by others, fear of solicitations by numerous others because of a contribution, a desire to not have their various charitable contributions compared, a desire to avoid sparking controversy for the nonprofit recipient, and even concerns about personal and cyber safety for themselves, their families and their businesses.

The structure of nonprofits enables donors to make a societal impact and to even assert constitutional rights without realizing any of their above-mentioned fears related to a lack of privacy. The loss of these constitutional rights for donors is an irreparable harm — for them, as well as the nonprofit with which they associate. This is because government-compelled donor disclosure chills donor speech and association with nonprofits.

When donors' constitutional rights are chilled, the nonprofit is negatively impacted by lack of continued funding for its mission as well — which means the communities they serve ultimately pay the price.

Support for Proposed Rule, RIN 1545-BN28

Thankfully, RIN 1545-BN28 will help ensure that every American has the right to support the causes they believe in without fear of a loss of privacy, or fear of harassment and intimidation.

RIN 1545-BN28 puts the IRS back in step with the long-standing respect for the contributions that non-profit organizations — and the donors who support them — make to society.

We urge the IRS to adopt RIN 1545-BN28 as swiftly as possible.

Sincerely,

Paul Weber, President & CEO
Family Policy Foundation
Colorado Springs, CO

Cole Muzio, President & Executive Director
Family Policy Foundation of Georgia

Blaine Conzatti, Advocacy Director
Family Policy Foundation of Idaho

Shawn Hyland, Advocacy Director
Family Policy Foundation of New Jersey

Vince Torres, President & Executive Director
Family Policy Foundation of New Mexico

Mark Jorritsma, President & Executive Director
Family Policy Foundation of North Dakota

Nathan Winters, Advocacy Director
Family Policy Alliance of Wyoming