New Disclosure Requirements Proposed For Nonprofits Engaging In Electioneering In NY

Proposed Regulations Would Require Nonprofits To Disclose Extent Of Their Political Spending, Identify Donors And Expenditures Related To New York Elections

Attorney General Eric T. Schneiderman announced new regulations requiring nonprofit groups, including 501(c)(4) social welfare organizations that are registered with the state, to report the percentage of their expenditures that go to federal, state and local electioneering.  Those groups that spend at least $10,000 to influence state and local elections in New York will be required to file itemized schedules of expenses and contributions.  Under the proposed new rules, those disclosures will be released to the public. Read the text of the proposed regulation here.

The new regulations would apply to all registered organizations exempt from taxation under section 501(c) of the Internal Revenue Code, except for 501(c)(3) organizations, which are already strictly prohibited from intervention in political campaigns.  The regulations define “electioneering activities” to include express advocacy (advertisements and other communications that call specifically for the election or defeat of a particular candidate, referendum, or party) and issue advocacy (communications made within 180 days of an election that identify or depict particular candidates, referenda, or parties by name but that do not explicitly call for their election or defeat). The regulations apply to communications through television, radio, print advertisement, telephone and over the internet.

The new disclosure regulations would also require registered nonprofits that spend $10,000 or more in a year in connection with New York state and local elections to file an itemized schedule with its annual financial report disclosing: (1) each expenditure it made in connection with a New York state or local election, including the expenditure’s recipient, date, amount and purpose; and (2) each contribution of $100 or more it received, including the contributor’s name, employer and address, and the amount and date of the contribution, subject to certain limitations and exceptions to protect donor privacy. This information will be made available to the public.

The regulations exempt any nonprofit from having to file information with the Attorney General that the organization discloses to another agency that makes it available to the public.

The proposed regulations contain two key exceptions to the disclosure requirements. First, the regulations do not require the schedule to include information about donors whose donations are restricted so that funds cannot be used for electioneering. So long as organizations keep earmarked funds in separate bank accounts from funds that are used for electioneering, information on that donor need not be disclosed.  Second, if public disclosure of a contribution or a donor’s identity could cause undue harm, threats, harassment or reprisals, the organization or the donor can apply to the Attorney General’s office for a waiver from disclosure of information concerning that donor.

 

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