The U.S. Supreme Court has ruled that a California law requiring charities soliciting contributions in the state to report the identities of their major donors is unconstitutional.

The law requires charities to disclose the names and addresses of their major donors to the state attorney general's office by filing copies of their IRS Form 990 Schedule B annually when renewing their registration. The Americans for Prosperity Foundation, a group affiliated with the Koch family, and the Thomas More Law Center, a conservative Christian public-interest law firm, had challenged the law, arguing that it violated the First Amendment right to freedom of association by subjecting donors to possible harassment. Although the state government had promised to keep the Schedule B forms confidential, in 2015 AFP Foundation and TMLC found that nearly two thousand forms had been posted on the attorney general's website, albeit inadvertently.

In a 6-3 decision, with the three liberal justices dissenting, the Supreme Court reversed the ruling of the Ninth Circuit Court of Appeals, which had held that "the up-front collection of charities' Schedule Bs promoted investigative efficiency and effectiveness" and "the disclosure of Schedule Bs would not meaningfully burden donors' associational rights." The court's opinion, written by Chief Justice John Roberts, states "that California's disclosure requirement is facially invalid because it burdens donors' First Amendment rights and is not narrowly tailored to an important government interest."

"California does not rely on Schedule Bs to initiate investigations," wrote Roberts, "and in all events, there are multiple alternative mechanisms through which the Attorney General can obtain Schedule B information after initiating an investigation."

"Today's analysis marks reporting and disclosure requirements with a bull's-eye," wrote Justice Sonia Sotomayor on behalf of the dissenting justices. "Regulated entities who wish to avoid their obligations can do so by vaguely waving toward First Amendment 'privacy concerns.'"

AFP Foundation and opponents of the California law, including Philanthropy Roundtable, applauded the ruling. "When a state makes a blanket demand for a list of an organization's supporters, it creates an unacceptable risk to those people's right to join together with one another and violates the privacy necessary to protect that right," AFP Foundation tweeted. "We applaud the court's decision and what it means for nonprofits across the country and the millions of Americans who support them." According to the Chronicle of Philanthropy, other groups opposed to the law include the Association of Fundraising Professionals, the Council for Advancement and Support of Education, Doctors Without Borders, the National Wildlife Federation, and the Southern Poverty Law Center, while supporters include the National Council of Nonprofits, CharityWatch, the California Association of Nonprofits, and Public Citizen.

Jakada Imani, CEO of the Management Center, which assists nonprofit leaders working for social change, told the Chronicle that he was disappointed by the Supreme Court's decision, even though he understood why a few donors and nonprofits wanted to keep their donor information private. "There are a few organizations that are taking on really unpopular programs," said Imani, citing needle exchanges as an example of a good cause that donors might wish to support that could generate considerable backlash and unwanted attention for donors. Still, the benefits of disclosure rules such as the one in California outweigh the drawbacks, he said. "Information is power in a democracy."