Donor Disclosure

The problem with it is that controversial nonprofit organizations could see revealed donors subject to political or public intimidation as a result, and that is not a good thing.

As important as is the need for transparency in public policy, donor privacy must be protected, and this article from the Chronicle of Philanthropy reports on an attempt to open donor records.

An excerpt.

“The National Alliance on Mental Illness includes something on its Web site that is highly unusual in the nonprofit world: detailed, up-to-date information about its donors.

“Each quarter it posts the names of all corporations and foundations that gave the charity more than $5,000, the specific amount they contributed, and how the money was spent.

“Visitors can see, for example, that in the second quarter of 2010, Pfizer paid $35,000 for a corporate membership; Ortho-McNneil-Janssen Pharmaceuticals $60,000 to NAMI Beginnings, the group’s quarterly magazine; and Eli Lilly $250,000 to the Campaign for a Better Tomorrow, a program to help the charity carry out its educational, advocacy, and training programs.

“The alliance, a prominent advocacy group in Arlington, Va., started posting such details last year after Sen. Charles E. Grassley, of Iowa, began to investigate its financial ties to the pharmaceutical industry.

“Now Mr. Grassley— the senior Republican on the Senate Finance Committee—is turning an eye to 33 additional nonprofit medical groups. And he has made it clear he would like them to follow the mental-illness alliance’s lead.

“These organizations have a lot of influence over public policy, and people rely on their leadership,” he says. “There’s a strong case for disclosure and the accountability that results.”

“Confidentiality of Donors

“While the investigation is focused on medical issues, it could have implications for all charities that receive donations from businesses in areas that overlap with their nonprofit missions.

“The Nature Conservancy, for example, recently came under fire from some supporters who worried that donations from BP were undermining the group’s response to the oil spill in the Gulf of Mexico. The nonprofit group had to spend time trying to allay such concerns, pointing to policies and procedures that they said prevented any undue influence.

“The investigation also challenges the notion, protected by law, that charities have discretion over how much to reveal to the public about their donors.”