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Lawyers Alliance and Nonprofit New York Successfully Protect Nonprofits From Unnecessary Regulation
October 1, 2019--A federal court
has struck down
an unconstitutional law, finding that a “substantial number” of its applications “are likely to result in interference with the rights to freely associate and speak.” The law would have required a 501(c)(3) nonprofit to publicly disclose its donors if it makes a financial or in-kind contribution to certain other nonprofits that engage in a significant amount of lobbying in New York. While the government claimed the law was intended to shed light on campaign financing, the law would have required donor disclosure even if no campaign financing or lobbying was involved. For instance, it could require donor disclosure by Lawyers Alliance for New York and other technical assistance providers that provide free or reduced-fee legal assistance to nonprofits. It could affect a wide swath of the members of Nonprofit New York, who rely on donations from the public to fund the charitable services they provide.
“This is an important win for the nonprofit sector,” said Sharon Stapel, President & Executive Director of
Nonprofit New York
. “We want nonprofits to be transparent, and accountable, as existing lobbying laws require. This law would have created unnecessary burdens on nonprofits who are already stretched to the limit doing critical work throughout New York.”
“This ruling allows nonprofits to focus on serving their communities,” said Elizabeth Guggenheimer, Executive Director of
Lawyers Alliance for New York
. “As the court recognized, there is simply no reason to require public disclosure of donors by nonprofits that provide technical assistance or make grants to other nonprofits, where the assistance is not aimed at supporting a particular lobbying campaign or political activity.”
The ruling, issued by Judge Denise Cote of the U.S. District Court for the Southern District of New York, came in lawsuits filed in 2017
by Lawyers Alliance and Nonprofit New York
(then called Nonprofit Coordinating Committee), Citizens Union, and the American Civil Liberties Union and the New York Civil Liberties Union (while three separate cases were filed, they were joined administratively by the federal court). All of the parties joined in the successful challenge to NY Executive Law 172-e, concerning disclosure of donors by 501(c)(3) nonprofits. Judge Cote also struck down section Executive Law 172-f, which required donor disclosure by certain 501(c)(4) nonprofits. Lawyers Alliance and Nonprofit New York did not join in the challenge to that provision.
Lawyers Alliance and Nonprofit New York are represented by Lawrence S. Lustberg of Gibbons P.C. The State defendants have not yet indicated whether they will appeal.
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Nonprofit New York exists to strengthen and unite New York’s nonprofits. We’re building a thriving community of extraordinary nonprofits — a relentless, collective force for good. With nearly 1600 member organizations, we’ve been building a powerful nonprofit community in New York for 35 years, driven by the belief that when one nonprofit is stronger, all of us are stronger. Nonprofit New York is a 501(c)3 nonprofit membership organization based in Manhattan. Visit
www.nonprofitnewyork.org
for more information.
Lawyers Alliance for New York is the leading provider of business and transactional legal services for nonprofit organizations that are improving the quality of life in New York City neighborhoods. By connecting lawyers, nonprofits, and communities, Lawyers Alliance for New York helps nonprofits to develop affordable housing, stimulate economic development, promote community arts, strengthen urban health, and operate and advocate for vital programs for children and young people, the elderly, and other low-income New Yorkers. During the past year, Lawyers Alliance’s staff worked with more than 1,600 volunteer attorneys from New York City’s finest law firms and corporate legal departments to represent approximately 700 nonprofit clients on 1,200 matters.
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