Donor Disclosure Question Won’t Be on 2018 South Dakota Ballot

Published August 4, 2017

After announcing plans to begin collecting signatures to place a ballot measure asking South Dakota voters to approve requiring out-of-state nonprofit organizations to disclose private donor lists, an out-of-state nonprofit organization and a South Dakota lawmaker are abandoning their plans.

Represent.Us, headquartered in Florence, Massachusetts, held a July 9 press conference announcing plans to train volunteer signature collectors in three South Dakota cities.

Represent.US was working with South Dakota state Rep. Mark Mickelson (R-Sioux Falls) on the campaign, asking voters to approve amending the state’s constitution and campaign finance laws. In August, Mickelson announced he was abandoning those plans in favor of initiatives for ballot questions to enact a tobacco tax hike and ban out-of-state contributions to ballot question committees.

The proposal would have required out-of-state nonprofit organizations donating more than $25,000 per year to South Dakota political committees pushing for ballot measures to publicly disclose their top 50 donors.

Public Disclosure, Private Beliefs

Forcing donor disclosure often leads to public shaming for personal beliefs, says Bradley Smith, a professor of law at Capital University and a former member of the Federal Election Commission.

“We’ve seen a lot, in recent years, of people harassing donors,” Smith said. “They can include business boycotts, but often include threats. We’ve seen people picket outside of people’s homes, we’ve seen individuals fired. It’s not a healthy thing for our democracy.” 

Mandating donor disclosure would discourage such initiatives and could facilitate government retaliation against private donors, Smith says.

“To the extent people [won’t] want to support ballot questions—and it costs a lot of money to get these on most state ballots—yes, you’ll probably get fewer ballot issues,” Smith said. “By definition, when you try to put something on the ballot, that means the legislature won’t do it. Donors may be particularly open to retaliation by legislators.”

Many Nonprofits Affected

Ron Williamson, president of the Great Plains Public Policy Institute, says the proposal would have affected many nonprofit organizations.

“Basically, the plan would require advocacy [groups] or nonprofits to disclose the 50 largest contributors that give $25,000 per year or [per] ballot initiative,” Williamson said. “That obviously would include labor, business, and any other nonprofit organizations. There would also be a requirement that those who spend $25,000 or more would have to list their top 50 contributors to the advocacy group.”

Constitutions and Costs

Williamson says he was concerned about the proposal’s constitutionality and its cost to taxpayers.

“The big thing with this issue, from a constitutional standpoint, is it may not stand the test, relative to the state Constitution,” Williamson said. “It also creates a real issue with the federal Constitution.

“My biggest concern is, let’s assume that it passes; then we’re tied up in courts all the time,” Williamson said. “Then, we have expenses for the state.”

Questioning Benefits

Smith says he doubts people would really use donor disclosure even if they say they want it.

“The question is, what difference does it really make?” Smith said. “How much does it matter? The second part of the question is, what are the harms of this type of disclosure versus the benefits?

“I think we see, when you really do a serious cost-benefit analysis and when you ask most people, they say, ‘We want disclosure,” Smith said. “When you look at the record, the fact is people do not generally use that information.”