On December 11, New York’s attorney general revealed new regulations that would, if adopted, require nonprofit groups doing business in New York to disclose the percentage of total spending devoted to political activities in New York. The rules also would require groups that spend more than $10,000 to identify any donor giving $100 or more.
Under the proposed rules, tax-exempt organizations registered—or required to be registered—under New York’s charitable registration law must include in their annual financial report the amount and percentage of total expenses during the reporting period that are New York “election related expenditures.” “Election related expenditures” include communications calling for the nomination, election or defeat of a clearly identified candidate, political party, or proposition in a New York election. They also include communications made within 180 days of a New York election that refer to one or more clearly identified candidate in that election or depict the image, name, or likeness of a candidate. The term “communication” covers paid broadcast advertisements, placement of content on the internet, print ads, telephone contacts, mailings and other print materials.
Of particular concern to nonprofits, especially 501(c)(4) groups, is the prospect of having to disclose their individual donors. The proposed rules state that a group that has made over $10,000 in New York election related expenditures must disclose the following information about each “covered donation” received within the applicable reporting period: (1) the name and address of each donor who made donations of $100 or more (in the aggregate) during the reporting period, (2) the donor’s employer, and (3) the date and amount of each donation. A “covered donation” is any contribution or thing of value made to a non-501(c)(3) tax-exempt group doing business in New York that is available to be used for a New York election related expenditure. In other words, the donation does not actually have to be used or intended for New York election related expenditures in order to be subject to disclosure.
The proposed rules would, however, exempt from disclosure donations that are restricted in a way that prevents them from being used for electioneering. The proposal also includes a process by which a group can seek a waiver if it can show that public disclosure of a contribution or donor’s identify could cause undue harm, threats, harassment or reprisals.
Written comments on the proposed rules may be submitted until March 6, 2013, with final rules expected to be in place in time for the 2013 local elections.