South Dakota is one of those states that we think of when we think of freedom. Its strong economy, low–or no–taxes, and natural resources have earned it a #1 ranking for starting a business by CNN. South Dakota is also friendly to philanthropy and with Governor Kristi Noem’s extra support, it may get a bit friendlier.
The legislature will soon consider two measures pertaining to private giving. One measure would prevent state agencies from publically releasing personal information about the people who donate to nonprofit organizations. The other measure would prevent state authorities, commissions, or agencies from adding any new disclosure mandates beyond what state law requires. Other states would do well to ensure that the legislature has the ultimate say on what happens in the state, not partisan bureaucrats who are unaccountable to the citizens.
Critics are out to paint these efforts inaccurately, prompting Governor Noem to explain: “The bill you’re specifically referencing has absolutely nothing on campaign finance. All it does is say that the state government has to follow the state law. And what it does is make sure the state government can’t be compelled to release information and violate state law.”
These measures are important, especially right now.
First, in the midst of a pandemic when demands for direct services are still high, nonprofit organizations depend on foundations for funding. Every dollar that a foundation spends on compliance costs for new requirements, is a dollar that won’t go to charities to help the people who need it most.
Second, there is legitimate concern about the harms of exposing the names and contact information of donors. Individuals are “canceled” today for no other reason than who they support politically or what causes they have given their money to. There is real fear among the populace about retribution, harassment, or financial consequences. In a New Hampshire poll last fall, 68 percent of Trump supporters said they would not place a “MAGA” or “Trump 2020” sign in their yards out of fear that their homes would be vandalized. About the same wouldn’t place a bumper sticker on their cars either.
Last summer, Cato found that nearly two out of three people (62 percent) believe the political climate prevents them from voicing their opinions freely. We can surmise why. An astonishing 50 percent of strong liberals would support firing a business executive from his or her job if they donated to the Trump campaign. A much smaller, though still significant, 36 percent of strong conservatives would support firing an executive who was a Biden donor.
Efforts to bully customers and cancel high-profile individuals such as the Goya CEO and SoulCycle founder are why many other high-profile people or regular Joe’s may want to keep their donations to causes, including public-policy organizations, quiet.
We want to encourage private giving in America. There are many good reasons why a donor desires to give anonymously. For example, a conservative donor might not want her financial support of an LGBTQ organization made public. In demanding that organizations turn over donor lists to state authorities and that information gets published online, state authorities could, at best, embarrass donors and, at worse, place donors in danger.
The Supreme Court held a similar concern decades ago when it affirmed the NAACP’s argument that it should not turn over its membership list to the state of Alabama for fear that they could suffer violence or economic reprisal. The Court will soon decide whether donations to an organization deserve the same protection in a case that our sister organization’s legal arm, the Independent Women’s Law Center, has weighed in on.
These measures are a common-sense approach. The legislature should follow through in advancing these protections for charitable giving and the charitable community.