A “sham” breast cancer charity had to pay donors nearly $5,800 in restitution following an investigation by the Attorney General’s Office. That investigation also led to a court order prohibiting the founders from creating or working at any breast cancer-related organization for 10 years.
Access to the names of the organization’s leaders and donors was critical to the investigation, Diane Murphy Quinlan, assistant director of the office’s Charitable Trusts Unit, told lawmakers last week.
A bill now before the House Judiciary Committee would limit, and in some cases eliminate, the ability of government agencies to obtain and disclose to the public the names of nonprofit board members. It also would make it burdensome to use donor information when needed to investigate concerns about fraud or potential conflicts of interest.
As a result, Senate Bill 302 would jeopardize the state’s ability to protect the public, Quinlan said. The legislation is also unneeded and harmful, she said: Her unit rarely requests donors’ names, and when it does, it’s to investigate a concern about conflicts of interest or fraud.
“This bill would mean less transparency in the governance of charitable organizations and will make it more difficult for our office to fulfill our oversight responsibilities so that donors can have more confidence that their donations are used for their intended purposes,” Quinlan told the House Judiciary Committee. “When considering this bill, it’s important to note that the ultimate beneficiary of charitable nonprofits is the public, and the public therefore has an interest in them.”
But defeating the bill, which imposes civil and criminal penalties for violators, will be an uphill battle. Few organizations have joined the Attorney General’s Office in publicly opposing it.
Meanwhile, a diverse group of supporters – from ACLU-NH to Americans for Prosperity, a conservative issue advocacy group – have already persuaded the Senate to pass the bill, arguing that it promotes personal privacy. Other supporters include the New Hampshire Coalition for Domestic and Sexual Violence.
SB 302 is needed, they said, to protect donors, members, and volunteers from harassment by those who oppose their affiliations, and it would prevent them from receiving endless solicitations from other organizations. (Nonprofits could still voluntarily identify donors, which many do in their annual reports with an option of allowing them to be anonymous.)
A spokesperson from ACLU-NH said the organization supports the bill but did not testify and referred questions to Greg Moore, state director of Americans for Prosperity in New Hampshire. He cited two concerns to the House Judiciary Committee Thursday.
“When you work for a politically active nonprofit, a lot of your donors ask if their contribution will be kept private, because, while they might believe in (the mission), they don’t want their name associated because they might be in business doing something else that would have a negative impact,” he said. “And frankly, the top reason I think is that they’re afraid of further unwanted solicitations. In other words, if you show up on a list as a donor to one organization, there’ll be a conga line of fundraisers from every other organization that will line right up and start soliciting you as well.”
The bill had found support in the Senate prior to the hearing in the House. Sen. Bill Gannon, a Sandown Republican, told senators to support it for another reason: People “have a fear of the government” and want their charitable activities to remain private, according to the hearing report.
To bolster their position, the bill’s proponents point to court decisions upholding similar prohibitions on releasing donor information, including a 2021 ruling by the U.S. Supreme Court that stopped the California Attorney General’s Office from requiring nonprofits to report the names of donors who gave over $5,000 annually.
They also point to the diverse political positions of the 300 groupsthat publicly supported the 2021 challenge brought by Americans for Prosperity. Those were the only arguments the bill’s prime sponsor, Sen. Regina Birdsell, a Hampstead Republican, made to the House Judiciary Committee Thursday.
The bill’s opponents said citing the California case is off-point because it related only to donor information, not the government’s access to the names of those who register a nonprofit, as SB 302 would.
That point also misses the Charitable Trusts Unit’s most significant concerns: The bill jeopardizes its ability to investigate conflicts of interest when a charity first registers, and preventing the unit from obtaining a donor list without a court fight will hamper its ability to provide victims restitution in cases like the fraudulent breast cancer scheme.
“While the bill was amended in the Senate to allow our office to request the names of board members in annual reports, the bill as amended would not allow our office to request the names of board members in connection with the registration process when charities register with our office,” she said. “This is a time when we’re often able to catch and can address things like conflict of interest transactions, pecuniary benefit transactions, and address issues regarding whether or not the board is composed in accordance with state law.”
Olivia Zink, executive director for Open Democracy Action, raised an additional concern about how the bill would limit access to donations to political campaigns.
The bill would not impact access to information regarding gifts to lawmakers and legislative employees; lobbyists’ names and affiliations; required financial disclosures; or political expenditures and contributions. Zink told the House Judiciary Committee she believes the bill’s wording still leaves a loophole that would allow some political donations to be kept private.
“This legislation would reduce the accountability in our political system, making it easier for wealthy special interests to make funding in our elections and make dark money in New Hampshire politics a little bit darker,” she said. “This moves transparency in the wrong direction.”
The House Judiciary Committee is scheduled to vote on the bill Thursday.
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