United States: Nonprofits Operating In New York Must Disclose Donors, Itemize Spending For Election Advocacy And Issue Ads

Last Updated: July 1 2013
Article by Lawrence H. Norton, Alexandra Megaris and Jeffrey S. Tenenbaum

Nonprofit groups raising money in New York are required by new rules to report nationwide spending on communications that support or oppose candidates and ballot initiatives, or that simply refer to candidates within certain periods before an election. When a group spends more than $10,000 on such communications in regard to New York state or local elections, it must also itemize these expenditures and disclose donors of $1,000 or more.

The new disclosure obligations apply to nonprofits that raise funds from New York residents and thus were already required to register and file annual reports with the New York Attorney General's Charities Bureau. According to New York Attorney General Eric Schneiderman, the rules principally target 501(c)(4) organizations that use so-called "dark money," a term that describes political spending that is not publicly disclosed under federal or state election laws, or federal tax laws.

Section 501(c)(3) organizations are exempt from the new disclosure requirements even if otherwise required to register and file annual reports. Membership organizations that only solicit their own members are exempt from the annual reporting requirements, and therefore are also exempt from the new disclosure obligations.

These new rules pose significant fundraising and compliance challenges for nonprofits because of their nationwide reach, applicability to grassroots lobbying communications, and requirements for donor disclosure.

I. Types of Paid Communications Covered by the New York Rules

Nonprofit organizations that raise money in New York, except for Section 501(c)(3) organizations, must now submit additional information in the annual reports they are obligated to file with the New York Attorney General's Charities Bureau. The new information must detail the organization's "election-related expenditures," defined as paid communications for either (1) express election advocacy or (2) election-targeted issue advocacy. Communications made through a wide range of media – television, radio, the Internet, print, and telephone – are subject to disclosure.

A. Express Election Advocacy

The first type of communication subject to disclosure, called express election advocacy, includes any communication:

  1. calling for the nomination, election, or defeat of a clearly identified candidate or political party in any election, or
  2. calling for the passage or defeat of a proposition, constitutional amendment, referenda, or other question submitted to voters in any election.

A further requirement is that the communication must contain express words of advocacy, such as "support," "elect," or "defeat," or be susceptible to no reasonable interpretation other than a call for the nomination, election or defeat of a candidate, political party, or ballot measure. This standard closely tracks the federal definitions for independent expenditures and express advocacy.

B. Election-Targeted Issue Advocacy

The second type of communication covered by the new rules, called election-targeted issue advocacy, is a communication made within 45 days before any primary election or 90 days before any general election that:

  1. refers to a clearly identified candidate in that election,
  2. depicts the image, name, or likeness of a candidate in that election, or
  3. refers to any political party or proposition in that election.

This definition expressly excludes issue advocacy directed to the members of a covered organization. (Note, however, that the membership exception does not apply to "express election advocacy," as described in the previous section.) Communications to promote or host candidate debates also are exempt from the definition of election-targeted issue advocacy.

Many grassroots lobbying communications will be swept up by these rules merely because an officeholder is mentioned and the legislation at issue is pending in the period prior to an election. The rules also will require disclosure of communications about federal candidates that do not have to be reported to the Federal Election Commission as electioneering communications because the federal rules apply only to broadcast communications and the applicable time frames are shorter (30 days before a primary, 60 days before a general election) than the New York rules.

II. Reporting Expenditures and Information about Donors

Organizations subject to the new rules must file an Electioneering Disclosure Schedule ("EDS") with their annual financial report filed with the New York Charities Bureau. The EDS must contain the following information:

A. Expenditure Disclosure

A covered organization must report the aggregate amount spent on "election-related expenditures," as well as the percentage such expenditures represent of the organization's annual spending. This reporting requirement is not limited to expenditures made in connection with New York state or local elections, but includes all election-related expenditures anywhere in the country – federal, state, and local. In addition, if a covered organization spends more than $10,000 in election-related expenditures during the reporting period in connection with New York state or local elections, the organization must itemize each expense over $50.

An organization need not itemize expenditures when such information is already disclosed to another government agency that makes the information available to the public. Thus, for example, no separate disclosure is required for independent expenditures disclosed to the Federal Election Commission or information contained in itemized reports filed with the New York State Board of Elections.

B. Donor Disclosure

A group that has made over $10,000 in election-related expenditures in connection with New York state or local elections must identify each individual who made donations of $1,000 or more during the reporting period, along with date and amount of the donation, and the donor's employer.

A "covered donation" is any contribution or thing of value made to the group that is available to be used for a New York election-related expenditure. Accordingly, the donation does not actually have to be used or intended for election-related expenditures in order to be subject to disclosure.

However, if an organization maintains a separate bank account containing funds used solely for New York election-related expenditures, and makes all of its New York election-related expenditures from that account, it only has to disclose donations deposited into such account. That way, the group may keep certain donors confidential. Alternatively, if information about donors has been disclosed to, and made public by, another government agency, it need not be included in the New York filing.

III. Approaching Compliance

The new rules pose significant compliance challenges, and can be burdensome and confusing. They require tracking and reporting entirely new categories of information, not only in relation to New York elections, but to any election, including federal, state, and local races across the country. Moreover, the rules apply to expenditures that will not always be treated as election-related under applicable federal and state election laws.

Donor disclosure poses both accounting and fundraising challenges. Groups spending over $10,000 in connection with New York state or local elections must disclose their donors unless they use a segregated bank account solely for that purpose. In that case, groups are only required to disclose contributions that are deposited into that segregated account.

A. Complying with Expenditure Disclosure Requirements

To ensure compliance with the new requirements, organizations registered with the New York Charities Bureau (other than 501(c)(3) organizations) will have to maintain careful records and implement processes and procedures to capture reportable expenditures.

An organization will need to evaluate its activity nationwide against New York's definition of election-related expenditure. Expenditures made in connection with New York state or local elections, or merely in the months prior to an election, will require special attention.

Reporting organizations will need a system for flagging all relevant contracts and disbursements and maintaining records in case of an audit. The rules do not specify whether reports must account for overhead or employee costs associated with covered communications. However, we anticipate further guidance on this and other issues from the New York Attorney General's office.

B. Managing and Complying with Donor Disclosure Requirement

The new rules compel groups that make more than $10,000 in relation to New York elections to disclose all donors unless the organization maintains a separate bank account for funds to be used exclusively for New York election-related expenditures.

An organization undertaking a communications campaign that refers to New York state or local officials may want to tailor its fundraising appeals to help manage disclosure. For instance, donors concerned about confidentiality could be assured that their funds will be deposited in an account where donor information need not be publicly disclosed. Conversely, donors could be asked to earmark donations for New York electoral or grassroots activity, and be informed that their donations will result in disclosure of their identity, employer, and amount of donation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.