Laura Abel, senior policy counsel for Lawyers Alliance for New York, discusses the lawsuit her organization and other nonprofits recently brought against the state of New York.
CCBJ: Tell us about Lawyers Alliance and Nonprofit New York, and what the organizations are about. How do you work in collaboration?
Laura Abel: Lawyers Alliance provides business and transactional legal services for nonprofit organizations serving low-income communities in New York City, and we do that work in partnership with law firms and corporate legal departments that donate their time on a pro bono basis. We’re a nonprofit organization ourselves, as well as a 501(c)(3) public charity, which is relevant to the lawsuit we’re about to discuss, and we work closely with Nonprofit New York in a number of ways.
Nonprofit New York is an umbrella organization of nonprofits in New York City. We are a member of the organization, and we also partner with them to advocate on behalf of the nonprofit community. In June of 2016, right around midnight, at the end of the New York State Legislature’s legislative session, Governor Cuomo introduced a bill that would require, for the first time, public charities in New York to publicly release their donor lists if they provide more than a small amount of either cash contributions or in-kind assistance to 501(c)(4) social welfare organizations.
In particular, this applies to social welfare organizations that spend $15,000 or more in a calendar year lobbying in New York state. The bill passed without much discussion in the legislature, because it was right around midnight, so we knew very little about why it was introduced and why it was passed. The messaging around it was that it was going to expose dark money in politics. But we know that the law would also have had a lot of unintended consequences. In particular, for Lawyers Alliance, we provide free or low-cost legal services to nonprofits serving low-income communities in New York, and some of those nonprofits are 501(c)(4) social welfare organizations. We’re not helping those organizations with lobbying work. We’re helping them with their legal compliance and governance. But if we end up doing more than a tiny amount of work for those groups, if we provide legal services worth $2,500 or more, under this law we would have to disclose all of our donors that provide us with $2,500 or more. That certainly wasn’t the intended consequence of the law, but it concerned us, because we wanted Lawyers Alliance to be able to continue serving those organizations. We have some donors that donate anonymously, and others that aren’t anonymous but may not want the amount of their contribution to be publicly disclosed. So for that reason, we decided to sue, and we joined forces with Nonprofit New York, which has a number of other members that would be in the same situation as Lawyers Alliance and be required to disclose their donors if this law took effect.
“The right to associate with our donors and to keep their names confidential is constitutionally recognized.”
Explain the dynamics of working against this bill, and some of the key players who were involved.
It became apparent that there were a number of different organizations that wanted to sue, and we were all affected by the law in slightly different ways. In addition to Lawyers Alliance and Nonprofit New York, Citizens Union also filed its own lawsuit, because it has a (c)(3) and a (c)(4), so it would have been affected by this law. The New York Civil Liberties Union also has a (c)(3) and a (c)(4), and they filed suit as well.
All of the lawsuits were consolidated, so they proceeded in federal court before the same judge, and we filed joint briefs and made joint oral arguments to the court. We ended up with a coalition of good government groups, with Lawyers Alliance as a technical assistance provider and Nonprofit New York as an umbrella organization.
I’ve been thinking about how our corporate legal partners would be affected by this law, if it went into effect. Lawyers Alliance partners with corporate legal departments to provide pro bono assistance to nonprofits, and in a given year we work with roughly 30 different corporate legal departments. Some of those matters involve helping social welfare organizations with their governance or contracts or other legal matters. When we do that work, the corporate attorneys are providing their time pro bono, so they would not be directly affected by the law, but Lawyers Alliance would be affected if our co-counseling requires us to spend time that would add up to $2,500 or more as an in-kind contribution.
We’re often involved as co-counsel to provide expertise on areas of the law that are specific to nonprofits. If we act as co-counsel with a corporate legal department, and because of that get caught up in this law and have to disclose our donors, it would apply to donations we’ve received from any corporation or other funder that provided us with $2,500 or more through our annual gala or any of our other fundraising efforts throughout the year. Essentially, what that would mean is that if a corporation partners with us to provide legal assistance, then makes a donation to Lawyers Alliance, we would have to disclose not only who that corporation is but also the amount that they gave us. It would be public information on the website of the Joint Commission on Public Ethics. That has never come to pass, and we hope it never will, because the law has not taken effect. Shortly after we filed our lawsuit, the state agreed not to enforce the law until the suit had concluded, and we’ve just won our summary judgment motion in the federal district court. Unless the state appeals, they can’t enforce that law.
Do you expect them to appeal? Do you have a sense of their interest in appealing versus revising the scope of the law?
We haven’t heard yet whether they will appeal, and I really don’t have a sense of their interest in doing so. But it’s worth mentioning what our claims were in the lawsuit and why we won. We challenged this law based on our First Amendment and 14th Amendment rights to free expression and free association. The right to associate with our donors and to keep their names confidential is a constitutionally recognized right that was affirmed by the Supreme Court in a series of decisions involving the NAACP during the civil rights era. Ever since, the courts, and in fact, for the most part, the government, have recognized that 501(c)(3) organizations have a strong interest in being able to raise money from donors who don’t have to disclose their identity.
Public charities can only use that money for charitable purposes anyway. There are very narrow situations in which the government may have a law enforcement interest, for instance, and may be able to get donor names, but those are rare circumstances, and the government really made no showing that it needed the names in this instance.
Published November 4, 2019.