On January 21, 2025, the American Alliance for Equal Rights (AAER), founded by conservative legal activist Edward Blum, filed suit in the Northern District of Illinois alleging the illegality of Illinois Public Act 103-0635.
Public Act 103-0635 went into effect on January 1, 2025, and amends the Illinois General Not for Profit Corporation Act to require public disclosure of demographic data by certain not-for-profit corporations.
Specifically, within 30 days of filing their Form AG990-IL Charitable Organization Annual Reports, not-for-profit corporations that report grants of $1,000,000 or more must post on their publicly available websites “aggregated demographic information of [their] directors and officers, including race, ethnicity, gender, disability status, veteran status, sexual orientation, and gender identity.”
The complaint argues, in part, that the law violates the Fourteenth Amendment of the U.S. Constitution because it “encourages charitable organizations…to discriminate based on race.” The AAER alleges that “by forcing charities to publicize the demographics of their senior leadership, the law pushes them to hire candidates based on race.”
When the law was announced last summer, Governor Pritzker issued a press release stating that these statistics “are intended to assess each nonprofit’s leadership strengths and opportunities for growth and to implement strategies to recruit qualified individuals from diverse communities for board service.”
As C3 Legal previously posted, the law permits any individual director or officer to decline to disclose any or all demographic information to the corporation, but it does not provide guidance to corporations whose directors and officers have so declined.
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C3 Legal is continuing to closely monitor developments regarding these issues and expects to share additional alerts and updates in the future.