Earlier this year, the NYS Governor signed into law, Bill No. A10742/S8160 (the “ethics bill”) which, in relevant part, requires that 501(c)(3)s disclose some of their donor identities if that 501(c)(3) makes in kind or monetary donations to any 501(c)(4) that engages in significant lobbying in NY. This requirement went into effect on November 22nd.
Under this new funding disclosure regime, any 501(c)(3) that (1) provides monetary or in kind donations over $2,500; (2) during the six month period Jan 1-June 30; or July 1 to Dec 31 of any particular year; (3) to a 501(c)(4) that needs to file a source of funding report, must now file a funding disclosure report to the Charities Bureau.
In kind donations are defined to include, but limited to, donations of funds, staff, staff time, personnel, offices, supplies, financial support and other resources) of over $2,500.
The funding disclosure report must be filed with the Charities Bureau within thirty days of the close of the applicable six-month reporting period. Thus, the deadline for the report is either January 30 or July 30.
The Charities Bureau has not yet issued regulations on the funding disclosure reports for 501(c)(3) organizations, nor has it issued guidance on how 501(c)(3) organizations may request nondisclosure of donations.
This ethics bill is likely to have many unintended consequences on 501(c)(3)s who may work with those advocacy organizations. For example, a 501(c)(3) organization that provides pro bono legal services, management training, or other non-lobbying support to a 501(c)(4) may have to publically disclose all of its donors as a result of that work. Philanthropic institutions that provide grants to 501(c)(4)s also would have to do the same.
NPCC had sent out a survey to our membership to gauge the impact that some of you could anticipate under this new law. Thank you to all who responded; it is informing our advocacy efforts regarding this law. We are continuing to work with our ally, the Lawyers Alliance of New York and other partners to address these burdensome consequences for 501(c)(3)s.
In the meantime, 501(c)(3)s who work with 501(c)(4)s should ask those organizations if they are required to file source of funding reports. 501(c)(3)s should also familiarize themselves with the new disclosure requirements in anticipation possibly preparing a funding disclosure report in time for the first new reporting deadline of January 1, 2017.
Posted December 7th, 2016