South Carolina Secretary of State raises concerns over nonprofit data collection bill

A proposed bill aiming to enhance transparency in nonprofit organizations by allowing them to include demographic information in their articles of incorporation has sparked significant concerns among state officials. During a recent meeting of the Senate Labor, Commerce and Industry Committee, Melissa Dunlap, Deputy Secretary of State, raised alarms about the implications of collecting sensitive personal data.

The bill seeks to permit nonprofits to disclose details such as age, education, ethnicity, gender, disability status, and military service in their official documents. While proponents argue this could foster greater accountability, Dunlap highlighted three major concerns: privacy risks, identity theft, and fiscal implications for the Secretary of State's office.

Dunlap emphasized that the inclusion of personally identifiable information (PII) could compromise individual privacy, especially given the sensitive nature of the data. She pointed out that the current privacy policies, established under the South Carolina Bridal Protection Act, limit the collection of personal data to what is necessary for public purposes. The potential for misuse of this information raises significant red flags.

Moreover, Dunlap warned that the bill could lead to increased identity theft risks, as the demographic data could be exploited by malicious actors. She also noted the financial burden on the Secretary of State's office, which would need to implement costly changes to its data storage systems to ensure the security of this sensitive information.

In response to questions from committee members, Dunlap clarified that the office does not require this additional data to fulfill its statutory duties. She suggested that existing organizations, such as TogetherSC and the National Council of Nonprofits, might already provide the necessary data for research purposes without the need for state-level collection.

As the committee deliberates the bill, the concerns raised by Dunlap underscore the delicate balance between transparency and privacy in the nonprofit sector. The outcome of this discussion could have lasting implications for how charitable organizations operate in South Carolina.