On June 5, 2013, New York Attorney General Eric Schneiderman adopted regulations that require certain nonprofit entities registered (or required to be registered) with the Attorney General's Charities Bureau to file an Electioneering Disclosure Schedule ("EDS") with their regular annual filing. This Client Alert briefly describes these new regulations.

I. Who Must File an Electioneering Disclosure Schedule?

All nonprofit entities, other than 501(c)(3) organizations, that are registered (or required to be registered) with the New York Attorney General's Charities Bureau must file an EDS with the Bureau. Many nonprofits that solicit donations, conduct business, hold property, or are incorporated in New York are required to register and file financial reports on an annual basis with the Charities Bureau.

II. What Information Must Be Disclosed on an Electioneering Disclosure Schedule?

There are two general categories of information required on an EDS: (1) a relatively short disclosure of the aggregate and proportional amount of "election-related" expenses paid by the filer, and (2) much more detailed disclosure of specific, named donors whose funds are used or are available to be used to pay for such election-related expenses in New York.

All EDS filers must include the first category of information, but only those filers who spend at least $10,000 on expenses related to New York state or local elections need to include the second category.

A. Aggregate and Percentage Information Disclosed By All Filers

All entities that file an EDS must disclose the following information for each fiscal year:
  • Total dollar amount spent by the filer on "election related expenditures," regardless of whether such "expenditures" were made in relation to an election held in New York or elsewhere in the United States.
  • Percentage of the filer's total expenses that were "election related expenditures."

The term "election related expenditure" is defined broadly to include paid advertisements, paid internet or "other electronic communication network" content, paid electronic communications, paid telephone communications to 1,000 or more households, mass-mailings to 5,000 or more recipients, or printed materials exceeding 5,000 copies that constitute either:

  • Express election advocacy: Communications made at any time that expressly call for (using words such as "vote," "oppose," "support," "elect," "defeat," etc.) the nomination, election, or defeat of a clearly identified candidate, political party, or the passage or defeat of a question submitted to voters at any election; or
  • Election targeted issue advocacy: Communications other than express election advocacy made within 45 days before a primary/run-off election or within 90 days before a general/special election that depict or refer to a clearly identified candidate, political party, or question submitted to voters.

The term "election related expenditure" also includes transfers "for the purpose of supporting or engaging" in express election advocacy or election targeted issue advocacy.

B. Itemized Information Disclosed By Filers that Spend More than $10,000 on "New York Election Related Expenditures"

EDS filers that make "election related expenditures" exceeding a fair market value of $10,000 on state and local elections in New York (i.e. "New York election related expenditures") must make additional disclosures regarding its expenditures and receipts. Filers below that threshold are exempt from these enhanced disclosures.

1. Itemized Expenditure Disclosure

A filer that triggers the enhanced EDS disclosure requirements must provide an itemized schedule of each "New York election related expenditure" exceeding $50 in value, that must list each payee, as well as describe each expenditure's date and purpose, including whether the expenditure supported or opposed a candidate, political party, referendum, or other question put before voters. A filer need not itemize expenditure information if that information is disclosed to another government agency that makes such information available to the public.

2. Itemized Donation Disclosure

A filer subject to the enhanced EDS disclosure requirements must disclose every donation (defined as any contribution, gift, loan, advance, or deposit of money or anything of value) received by the organization that is available to be used for a "New York election related expenditure." Notably, this disclosure requirement obliges the filer to list the name and address of each donor who made a donation or donations aggregating $1,000 or more to the organization during the fiscal year for which the organization is filing the EDS. The donor's employer must also be disclosed, if the employer is known to the filer. The rule refers to a donation as being reportable unless it "is deposited into an account the funds of which are not used for making New York election related expenditures."

Accordingly, if an EDS filer makes "New York election related expenditures" exceeding a fair market value of $10,000, but (1) keeps one or more segregated bank accounts containing funds used solely for these New York election related expenditures, and (2) makes all of its New York election related expenditures from such accounts, then the organization's EDS need only include information on donations that were deposited into such a segregated account or accounts. If, on the other hand, the filer does not keep segregated accounts and exceeds the $10,000 threshold , then the organization's annual financial report must include information on all of the donations received by the organization during the reporting period. An EDS filer need not itemize donation and donor information if that information is disclosed to another government agency that makes such information available to the public.

This article is designed to give general information on the developments covered, not to serve as legal advice related to specific situations or as a legal opinion. Counsel should be consulted for legal advice.