October 31, 2023

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Donor privacy is essential for nonprofit organizations because many donors expect privacy when they make donations, and a lack of privacy could very well affect your organization’s ability to attract and retain donors. Unfortunately, states and localities across the country have engaged new legal regimes to force nonprofits to identify their donors. This is nothing new. But the methods through which states are trying to make this information public is new, and perhaps even more troubling than previous attempts. Perhaps most concerningly, some states have enacted laws and regulations that require nonprofits to disclose some of their donors if the nonprofit engages in election activity–including speaking out against ballot propositions.¹ 

Beyond the administrative hassle of reporting donors publicly, these new laws are potentially dangerous for religious organizations that may want to speak out about moral issues such as abortion, transgender surgical procedures, or nondiscrimination laws if those issues are on the ballot in an upcoming election. 

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Best Practices:

1) Every nonprofit organization should have a donor privacy/donor confidentiality policy. This policy should answer questions like:

• Do you plan to sell your donor list for commercial purposes?
• Do you plan to rent your donor list to like-minded organizations?
• Do you plan to make your list available on a one-time basis to other similar organizations?

Here is some sample language addressing this:

[Organization Name] respects the privacy of our donors (both online and offline) and their choices not to have personal information shared with others. We do not and will not sell or rent donor information; however, occasionally we make donor mailing lists available to select reputable nonprofits in return for donor lists from those organizations. This helps [Organization Name] continue to grow. In addition, we may provide donor information to companies that help [Organization Name] improve our fundraising efforts, such as mail service providers, online donation processing vendors, donor data management systems, and other services.  We also disclose donor information as required by law.

OR

[Organization Name] respects the privacy of our donors and their choice not to have personal information shared with others.  [Organization Name] does not and will not sell, rent, or trade donor information (collected online or offline, on any platform, as well as any electronic, written, or oral communications) to organizations that use such information for commercial purposes. Occasionally we make donor mailing lists available for one-time use by selected nonprofits in return for donor lists from those organizations.

OR

[Organization Name] respects the privacy of our donors and their choice not to have personal information shared with others.  [Organization Name] does not and will not sell, rent, or trade donor information (collected online or offline, on any platform, as well as any electronic, written, or oral communications) except as required by law.

Template language can be changed to match your organization's donors and the mission of your organization. 

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2) Every organization should consider whether it would like to provide donors the ability to opt out of the organization’s communication list or any list shared with third parties. 

Here are some sample options for allowing donors to opt out generally. 

Donors may instruct that we exclude their information from any lists that we share. All such requests — directed to the [name and contact info of a contact person/department where requests should be sent] — will be promptly implemented.

OR

Our donors may instruct that we exclude their information from any lists that we share. All such requests—directed to the [name and contact info, of contact person/department where requests should be sent]—will be implemented as soon as possible. Donors with additional questions may call [individual at organization responsible for donor policy].

OR

Our donors may instruct that we exclude them from our own communications and/or exclude their information from the lists that we share with others for use in their fundraising or marketing purposes. All such requests will be implemented as soon as possible. Please direct these requests to [name and contact info of contact person/department where requests should be sent].

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3) Some of the emerging problematic donor disclosure laws that apply to organizations engaging in campaign activity will not apply to 501(c)(3) organizations, because these organizations are prohibited from any involvement in political campaigns. Some laws, however, have expanded beyond involvement in campaigns for political candidates to campaigns involving issue-specific ballot initiatives. Since some ballot initiatives can involve policy issues on which faith-based nonprofits might speak out, it is good to be aware of the existence of these laws. Some states have begun requiring the disclosure of donors not just for activity promoting or opposing a candidate, but for activity promoting or opposing a ballot initiative. So if your organization has a desire to speak on issues that will be on a ballot for election, such as abortion, it will be important to look into the laws of the particular state or locality. For example, Arizona, Washington, Rhode Island, San Francisco, and Santa Fe are jurisdictions with donor disclosure laws that may impact nonprofits engaged in activity related to ballot initiatives.²

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¹ For example, in Rhode Island an organization must disclose donors who gave over $1,000 once an organization spends over $1,000 independent expenditure that “expressly advocates the election or defeat of a clearly identified candidate, or the passage or defeat of a referendum.” R.I. Gen. Laws § 17-25-3(17). In Arizona, an organization must disclose donors who gave more than $5,000 over a two-year period when then organization spends $50,000 on campaign media spending, including on public communications that promote, support, attack, or oppose the qualification or approval of any state or local initiative or referendum. A.R.S. § 16-971.

² Ariz. Rev. Stat. Ann. § 16-972; Wash. Rev. Code § 42.17.100(1); R.I. Gen. Laws § 17-25.3-1; SF Code § 1.161(a)(1), (5); Santa Fe City Code § 9-2.6.