Why Donor Privacy is Important for Free Speech

As one of the largest sources of tax deductions, the laws surrounding charitable donations are frequently in the public eye. However, not every donor is equally comfortable submitting their payment history to public scrutiny – either due to introversion or as part of each person’s right to keep their political affiliations private.

For Some, No Form of Giving is “Good Enough”

Over the past two months, the debate around donor privacy was reignited. Novelist and philanthropist MacKenzie Scott, former wife of Amazon’s Jeff Bezos, wrote about her desire to keep her future donations quiet. For two consecutive years, Ms. Scott has ranked as one of the largest private donors in the United States and has built a reputation for disbursing her money quickly and with almost no strings attached.  

Her original intent was to allow organizations to “speak for themselves” without sharing their spotlight with high-profile donors.

However, her initiative was not as well-received as she would have liked. According to Benjamin Soskis from the Center on Nonprofits and Philanthropy at the Urban Institute, this “privacy” would only serve to obscure the power wielded by mega-donors and help them evade responsibility or transparency.

After a few days of heated re-tweeting, Ms. Scott backtracked and announced her intention to post all her gifts in a searchable database hosted on her Foundation’s website.

Why Give Anonymously?

The concept of “doing good without looking at who” is as old as Western Culture. All three major religions describe anonymous giving as the highest form of charity, as it seeks to help for helping’s sake.

In the United States’ legal system, the ability to donate anonymously is closely tied to the rights to free speech and free association. This was first pointed out in 1958, during NAACP versus Alabama: in this landmark case, the Supreme Court ruled that fee-paying members of the NAACP had the right to remain anonymous to protect them from coercion, discrimination, or hostility.

This right was reasserted by the Supreme Court repeatedly throughout the 1990s and up to the new millennium. For private donors, it is crucial to separate these private acts of charity from their public personas or their companies: otherwise, support for a less-than-popular cause can quickly become the source of a boycott, a scathing media campaign, or of being “canceled.”

The Case for Public Donations

On the other side are political analysts such as Benjamin Soskis or Chuck Collins from the Program in Inequality and the Common Good. For them, charitable donations are a form of public money, which makes them subject to public scrutiny.

Registered charities must disclose the names and addresses of any private donations above 5,000 US$ to the IRS. This information is then used to ensure that tax deductions are allocated appropriately and that charitable organizations are run transparently.

According to Chuck Collins, taxes are public money, and therefore, any tax deductions due for charitable donations are also being taken away from everyone’s money. “We’re all chipping in for her tax reduction,” he explained, so these contributions should be publicly reported.

Free Spending is a Form of Free Speech

The arguments expressed by Mr. Soskis and Mr. Collins are too easily extrapolated into other types of tax-promoted private spending. Currently, citizens can access tax benefits due to the size of their families, the type of car they choose, or the technological gadgets they buy. These shopping purchases are all firmly grounded in the private sphere: you may want to advertise your new electric car, but should you be forced to just because it will bring a tax deduction?

Ultimately, both consumers and philanthropists choose where to spend their money based on complex and very personal reasons. Should we, as a society, add to the burden of those who are already going out of their way to help?

Grassroots Pulse covers public policy and political issues aimed at engaging highly-active policy makers, donors, and grassroots leaders at the forefront of the political process in America today.

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