Recent Developments

Issues that affect ministers and churches
Legal Development in Texas Regarding Church Records
The Texas Supreme Court ruled that a state nonprofit corporation law that granted a limited right to inspect corporate records did not mandate the disclosure of donor records.
Texas
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Key point. Many nonprofit corporation laws give members the legal right to inspect certain corporate records. These laws generally do not give members the right to inspect donor records.

The Texas Supreme Court ruled that a state nonprofit corporation law that granted a limited right to inspect corporate records did not mandate the disclosure of donor records. While the case did not involve a religious charity, the court's conclusions are of direct relevance to any church incorporated under a comparable law.

The Texas Nonprofit Corporation Act specifies that nonprofit corporation "shall maintain current true and accurate financial records with full and correct entries made with respect to all financial transactions of the corporation." It further specifies that "[a]ll records, books, and annual reports of the financial activity of the corporation shall be kept at the registered office or principal office of the corporation … and shall be available to the public for inspection and copying there during normal business hours."

Based on these provisions, a group of persons demanded that a charity turn over documents revealing the identities of all donors and the amounts of donors' annual contributions. The charity resisted this request, claiming that the inspection right provided under the nonprofit corporation law did not refer to inspection or disclosure of donor lists, and that even if it did, such a provision would violate the first amendment freedom of association.

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