Two senators hope to bolster charitable giving with legislation to reinforce donor privacy. The Protecting Charitable Giving Act, sponsored by Sens. Todd Young (R-Ind.) and James Lankford (R-Okla.), would increase penalties and prosecutorial tools available to combat unlawful exposure of charitable givers’ identities.
“Anonymous giving has long been a way for Americans to support philanthropic organizations that rely on generous charitable contributions,” said Young. “In recent years, donor privacy has been threatened on too many occasions.”
While the IRS requires 501(c)(3) nonprofits to identify major donors on Form 990’s Schedule B, that sensitive information is generally not divulged publicly. However, several breaches have shaken confidence in the controls protecting that data. For example, unwarranted disclosures in California served as a backdrop to a key U.S. Supreme Court ruling in 2021 blocking the state’s bulk collection of Schedule B’s based on risks to the constitutional guarantee of free association.
Sens. Young and Lankford aim to deter Schedule B data leaks by boosting maximum penalties for an offender from $5,000 to $250,000, as well as increasing the minimum penalty from zero to $10,000. In addition, their newly introduced bill would enable the prosecution of these exposures to take place in a victim’s local jurisdiction (primary places of residence for individuals and principal places of business for organizations), and it would require the IRS to report on such breaches and offer preventative recommendations for the future.
Calling charitable groups and their supporters “an essential safety net for our communities,” Lankford said individuals shouldn’t need to be worried about public exposure for trying to help with a financial gift.
“Millions of donors want to do something good without being recognized,” he said. “We should honor their privacy as they care for others.”
ECFA will continue to monitor this bill and other deliberations about donor privacy protection and charitable sector transparency.