This week Senators Todd Young and James Lankford introduced the Protecting Charitable Giving Act (PCGA), which strengthens and reinforces the penalties for leaking tax documents of 501(c)(3) and 501(c)(4) organizations and their donors.
Over the past several years nonprofit organizations and individual donors have confronted the threat of their private information being leaked online or to reporters with little reprimand, despite donor privacy being a First Amendment right.
Philanthropy Roundtable supports the PCGA because it provides a much-needed update to laws aimed at protecting donor privacy and the free speech of all Americans. This legislation enforces the constitutional right of donors to support causes they believe in by knowing there are now suitable penalties and increased prosecutorial options should their information be leaked. The U.S. Supreme Court upheld this right in 2021 in the AFPF v. Bonta decision.
There are three specific changes this legislation would implement:
- Increases the maximum penalty for leaks of schedule B donor information from $5,000 to $250,000
- Increases the minimum penalty from zero to $10,000
- Expands the prosecutorial venue to the victim’s (individuals or organizations) primary residence, or organization’s place of business
While 501(c)(4) organizations are no longer required to submit 990 schedule B forms, this legislation would protect previous submissions and organizations that choose to submit by choice.
Additionally, the bill requires the IRS to issue a report of any disclosure of form 990 schedule B information and make recommendations to prevent future leaks. Modernizing current donor privacy laws will not only update penalties that haven’t been changed since 1976, it will reaffirm the importance Americans place on the freedom of association. This signals to states like New York and California, where we have seen a recent erosion of donor privacy, that these rights shall not be infringed.
See the press release from the Roundtable on the introduction of this bill here.
