May 06, 2013

Donation disclosures could impact fundraising for tax-exempt orgs

1 min

Larry Norton tells Los Angeles Times that regulations forcing 501(c)4s to reveal campaign contributions could “have an impact on their fundraising”

Venable partner Larry Norton was quoted in a May 2, 2013 Los Angeles Times article on state level efforts to force tax-exempt advocacy organizations and trade associations to disclose donors. Currently, organizations set up under section 501(c)4 of the tax code can spend unlimited amounts of money in elections as long as politics is not their primary purpose. Several states, including New York and Maryland, are trying to pass regulations to force these organizations to reveal the identities of their donors if they participate in state and local elections.

Advocates on both sides of the issue acknowledge the state regulations will likely trigger litigation. The moves are also causing anxiety among several organizations and their donors. “There's deep concern,” Norton said. “It probably has a chilling effect on organizations themselves, and I think will likely have an impact on their fundraising.”