Ninth Circuit Court Of Appeals Reaffirms CA Attorney General's Demand For Donor List

A three-judge panel of the Ninth Circuit Court of Appeals1 recently upheld the position of the California Attorney General (AG) that charities located or doing business in California must provide a copy of their unredacted Form 990 Schedule B, including the names, addresses and contribution amounts for all donors listed with the annual report filed with the AG.2 While the AG has indicated that the collected information will not be made publicly available, this is unwelcome news for charities that are concerned about protecting their donors' identities.3

Out-of-state charitable organizations that solicit contributions or do business in California should consider the effect of these disclosure requirements on donor relations. All affected charities, including out-of-state charities, should review their donor confidentiality policies and disclosures to ensure that their donors are aware of California's disclosure requirement.

Regulation of Charities Located or Doing Business in California

Most California charities and certain out-of-state charities doing business or holding property in California are required to register and file an annual report (Form RRF-1) with the AG's Registry of Charitable Trusts. Religious organizations, educational institutions, hospitals and health care service plans are exempt from this registration and reporting.

A copy of the charity's annual IRS information return (Form 990 or Form 990-EZ) must be included with the annual report. The AG treats annual reports submitted without Schedule B or with a redacted Schedule B as incomplete. Failure to file a complete report generally results in penalties, fees and the loss of California income tax exemption.

Several states, including New York, have a similar filing requirement. Both the California and New York AGs have stated that it is not their policy to disclose Schedule B to the public. In 2016, the California AG formalized its policy, adopting a regulation that makes Schedule B information confidential and exempts it from public inspection except in a judicial or administrative proceeding or in response to a search warrant.4 Of course, there is no guarantee that their disclosure policies and related regulations will not change in the future.

Schedule B - Donor Disclosure

Schedule B to the Form 990 is used to disclose to the IRS the reporting organization's significant donors (generally those who contribute over $5,000 in cash or property), including their names...

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