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.

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Insurance Advocacy for Policyholders

Kevin Glandon has helped policyholders recover over $1 billion for first party losses and third-party liabilities. Kevin has extensive experience with complex, multimillion-dollar property damage and business interruption claims arising out of catastrophic events, including damage to or destruction…

Insurance Advocacy for Policyholders

Kevin Glandon has helped policyholders recover over $1 billion for first party losses and third-party liabilities. Kevin has extensive experience with complex, multimillion-dollar property damage and business interruption claims arising out of catastrophic events, including damage to or destruction of commercial real estate, hotels, and manufacturing plants caused by hurricanes, floods, and fires–prominent risks potentially impacted by climate change. Kevin also has significant experience litigating and advising on coverage for environmental and products liability claims.

Kevin also assists clients with insurance recovery under cyber, fidelity and crime insurance, builder’s risk, and product recall policies, and has advised on impacts due to communicable disease and insurance-related due diligence in connection with major acquisitions. He advises clients regarding efficient and practical insurance strategies to prepare for and respond to first-party losses and third-party claims, and has worked extensively with forensic accountants, insurance brokers, and subject matter experts to achieve an effective, multidisciplinary approach to claim resolution. Kevin’s insurance-related experience spans the fields of commercial real estate, hospitality, manufacturing, government contracting, energy production, and professional sports.

Political Law

He also has experience advising clients in compliance and defense matters regarding political and election law, including the Foreign Agents Registration Act, the Securities and Exchange Commission’s pay-to-play rules, the Federal Election Campaign Act, Senate and House ethics rules, and numerous state and local political and election laws and regulations.