Yesterday, Washington State Governor Jay Inslee signed into law the DISCLOSE Act, a law that imposes new donor disclosure requirements on politically active nonprofits.
Under the new law, a nonprofit entity—including, but not limited to a charity, educational institution, advocacy group or trade association—may be required to register with the state as an “incidental committee” and disclose the top 10 donors whose contributions aggregate to $10,000 or more in the calendar year if the nonprofit expects to make contributions or expenditures that aggregate to at least $25,000 in any calendar year in Washington state election campaigns, including ballot initiatives. There is an exception for certain foundations that contract with a nonprofit, so long as the contract prohibits the use of the funds on political activities, and the foundation funds less than 25% of the nonprofit’s budget.
Like similar laws in other states, the DISCLOSE Act is an attempt to combat “dark money”—political contributions where the original source of funding may not be fully disclosed. However, like many such laws, the “cure” is not perfectly tailored to address the concern. For example, the law will undoubtedly lead to the disclosure of specific individuals who donated to a nonprofit without any intention that their funds would be used in connection with a Washington state election. The law may also dampen nonprofits’ fundraising by discouraging donations of $10,000 or more.
Would-be donors to nonprofits now have a few additional questions to consider, including the following:
- Will my donation place me among the top ten donors, resulting in the disclosure of my identity in a Washington state campaign finance filing? (Possibly, if a person’s donations to a politically active entity will amount to $10,000 or more.)
- If I live outside the State of Washington, does this law even apply to me? (Yes, if the recipient nonprofit is politically active in the state.)
- Do I now need to monitor the political plans of the nonprofits to which I donate? (Probably.)
The new law goes into effect on January 1, 2019, so active or would-be donors have until the end of the year to assess the impact of the new law on their giving plans.
For fans of legislative acronyms, “DISCLOSE” is an abbreviation of Democracy Is Strengthened by Casting Light On Spending in Elections.
Covington will continue to monitor this and other developments regarding state donor disclosure laws.