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Governor Brown Signs SB 27 to Require Nonprofits Active in California Elections to Reveal Their Donors

Nonprofit groups that solicit for, or make, California campaign contributions or expenditures will now be required to disclose certain donors under a law enacted yesterday. Large state committees will also have additional disclosure obligations.

The new law defines a “multipurpose organization” (“MPO”) to include trade associations, civic organizations, labor unions, non-California PACs, and other tax exempt entities described in sections 501(c)(3) through 501(c)(10) of the Internal Revenue Code.

Effective immediately, these MPOs can trigger registration and reporting requirements in two ways.

The first is any MPO that solicits or receives donations totaling $1,000 or more for the purpose of making California political contributions or expenditures. These MPOs must disclose all their donors who contribute $100 or more.

The second is any MPO that makes California political contributions or expenditures totaling more than $50,000 in a year or more than $100,000 in four consecutive years from un-earmarked donations. These MPOs must disclose their donors who most recently contributed $1,000 or more in the calendar year, listing as many donors as needed to fund the MPOs’ California contributions or expenditures. MPOs active in 2014 will not be required to disclose donor information for un-earmarked donations received prior to July 1, 2014.

MPOs are also not required to disclose donor information for donors who designate, restrict, or otherwise prohibit their donations from being used for California political contributions or expenditures.

SB 27 additionally requires certain large committees to provide the FPPC a list of the committee’s top 10 donors of $10,000 or more, which will be posted on the FPPC’s public website.

Combined with AB 800 and regulatory efforts undertaken by the FPPC in recent election cycles, SB 27 signals a continued focus on disclosing large contributors who directly or indirectly participate in state politics in advance of elections. AB 800, signed by Governor Brown earlier this year, authorizes the FPPC to investigate the records of a nonprofit or campaign committee prior to an election and prior to any reporting obligation being due.

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As always, please don’t hesitate to contact the political law attorneys at Nielsen Merksamer if you have any questions.