Lifting Of FEC Regulation Means Political Nonprofits Must Reveal Some Anonymous Donors

Groups may have to reveal their donors by as early as Oct. 15.

By Rhonda Fanning & Morgan KuehlerSeptember 20, 2018 4:14 pm|

Political nonprofits will have to reveal some of their major donors after the Supreme Court on Tuesday declined to intervene in a federal judge’s earlier ruling. In August, Washington, D.C. District Court Judge Beryl A. Howell threw out a decades-old Federal Election Commission regulation allowing nonprofits to keep their donors secret unless they had earmarked money from them to use for specific purposes.

Michelle Ye Hee Lee, a reporter covering money and influence in politics for the Washington Post, says the move has significance given that the midterms are only weeks away. She says it could make it harder for some groups to use so-called dark money.

“Advocates who want to get rid of dark money in politics have said [the regulation] created a loophole for these nonprofits and fundraising,” Lee says. “Some of these nonprofits were able to fundraise money that paid for their political activity. But, unless you specifically earmarked it for political purposes, you didn’t have to report it.”

Lee says there is concern, though, that the new ruling will spook big donors who would wish to remain anonymous.

“The theory is that because the rules are not clear anymore, there’s not a regulation guiding them. These political nonprofits don’t know exactly what they’re supposed to be saying when they raise money from these big donors,” Lee says.

But she says that some nonprofits have already started to change their fundraising activity in a way that has boosted transparency. Some groups have moved their activity over to an affiliated super PAC, which is required to reveal donors. This means that donors are already having to adjust their behavior and think about the ramifications of their name being revealed. 

Lee says it’s unclear how the new ruling will affect organizations before the midterms because the FEC is still working on new guidelines.

“It could mean that these groups have to reveal their donors as early as Oct. 15, which is the next quarterly filing deadline with the FEC for these groups,” Lee explains. “The FEC now is coming up with some sort of guidelines to help politically active nonprofits know what they should be following and things they should be thinking about as they’re fundraising, in lieu of having a new regulation.”

Written by Morgan Kuehler.