Nonprofit challenges Illinois demographics-disclosure law for charities

The conservative nonprofit American Alliance for Equal Rights repeatedly emphasized to a skeptical Seventh Circuit panel that they had standing to sue.CHICAGO (CN) — An Illinois law requiring charities to publish their officers’ and directors’ demographics runs afoul of those people’s constitutional rights, a nonprofit argued before a skeptical Seventh Circuit panel on Friday morning.Founded in 2021 with the expressed goal of challenging race and ethnicity distinctions, the American Alliance for Equal Rights sued over the Illinois law in 2025.The conservative nonprofit claims the statute violated the First and Fourteenth Amendments. The U.S. government filed an intervening complaint in support.An Illinois federal court dismissed the complaints for lack of standing, denying motions for a preliminary injunction.With the case now at the Seventh Circuit, standing remains a key issue. The AAER sued on behalf of two of its members but did not identify them, citing fear of retaliation.“The alliance’s ability to protect the true identities of its members, including Members A and B … is vitally important to it and its current and prospective members,” attorney Cameron Norris wrote in an amended complaint. “Without it, members would be less likely to join the alliance, communicate freely with the alliance or vindicate their rights in court and elsewhere.”Norris, an attorney with Virginia-based firm Consovoy McCarthy PC, argued the nonprofit members have standing because they are directly affected by the Illinois law.“They are directly regulated by this law. That is conceded by my friends in Illinois,” he said. “They have to ask their leaders these demographic questions that the state is mandating, and they have to collect the answers.”“In other words, they have to do something they don’t want to do because of a statute they think is unconstitutional,” Norris continued.Representing the plaintiffs, Norris and government attorney David Goldman remained laser-focused on standing during Friday arguments.U.S. Senior Circuit Judge David Hamilton, a Barack Obama appointee, pressed Goldman on the merits of the case. He declined to answer.“We think standing needs to be addressed and nipped in the bud immediately,” Goldman replied.Sarah Hunger, Illinois deputy solicitor general, argued Norris and Goldman didn’t want the court to actually address the merits.“Neither of my opponents actually want this court to reach the merits,” she said. “We would be happy to also not reach the merits if they are not suggesting that this court reverse and direct the entry of a preliminary injunction.”Enacted in 2024, Illinois Senate Bill 2930 requires nonprofits to aggregate the demographics of their officers and directors and post that information on their website. But the law explicitly provides an opt-out position.“Any individual director or officer can choose not to answer these questions, right?” Hamilton pressed Norris. “Conceivably, everybody could choose not to answer the questions, apparently without consequence.”Norris again focused on standing. Even if a nonprofit director opted out, the information would still be posted on the group’s website, he said.“It’ll make the nonprofit look bad under this disclosure requirement,” he said. “It will make it look less diverse than it really is.”“It’s not contested by my friends in Illinois that some of these questions are kind of awkward not to give an answer to,” Norris argued. “I mean, there are questions about sexual orientation [and] gender identity. There’s questions about being a veteran, or disabled, [and] saying ‘I decline to tell you if I’m a veteran’ risks suggesting maybe you’re trying to take credit for service in the armed forces.”U.S. Circuit Judge Thomas L. Kirsch II, a President Trump appointee, and U.S. Circuit Judge Nancy Maldonado, a Joe Biden appointee, also appeared on Friday’s panel. They did not indicate when they might rule on the matter.Subscribe to our free newslettersOur weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.Additional Reads