The National Apartment Association (NAA) is tracking recent lawsuits in Illinois and Minnesota that question the legality of demographic reporting and race-related representation requirements. These state laws relate to volunteer membership and not-for-profit corporation director and board members.
Illinois' General Not-For-Profit Corporation Act
On January 25, 2025, the American Alliance for Equal Rights filed a lawsuit in the U.S. District Court for the Northern District of Illinois Eastern Division regarding a January 1, 2025, amendment to the Illinois’ General Not-for-Profit Corporation Act. This amended law requires any not-for-profit corporation reporting $1,000,000 or more of grants to other charitable organizations to post aggregated demographic data on its directors and officers on its website, including race, ethnicity, gender, disability status, veteran status, sexual orientation and gender identity, within thirty (30) days of filing its annual Charitable Organization Annual Report.
Plaintiff claims the requirement is designed to discriminate, quoting the bill’s sponsor, who said this reporting is meant to promote foundations diversifying their boards. Plaintiff alleges this requirement causes injury by going against its desire to select board officers and directors based on merit and experience. The suit alleges a fourteenth amendment violation by the state promoting race-based discrimination by mandating corporations publish demographic information and risk public shaming or be forced to change their priorities and practices. The suit also claims this reporting of persons based on the state’s race and sex classifications is a violation of the first amendment as it requires the information be publicly available and not just reported to the state.
Minnesota Health Equity Advisory and Leadership Council
Do No Harm, Inc., filed a lawsuit on January 24, 2025, in the U.S. District Court for the District of Minnesota against the Minnesota Department of Health that alleges similar Fourteenth Amendment violations to those in the Illinois lawsuit. The Minnesota Health Equity Advisory and Leadership Council, which serves as an advisory board for the Department of Health, consists of 18 appointed members who, by state statute, must represent categories based on immutable characteristics such as race, sexual orientation and disability status. In this matter, plaintiff’s claim state mandated racial quota violate the Equal Protection Clause and the Citizenship Clause by dictating membership criteria not based on experience and what best serves the advisory council’s mission.
What’s Next?
Until there is a clear federal ruling, states will continue to litigate these issues regarding existing programs’ state or locally mandated membership criteria and related disclosure requirements.
NAA’s Legal Affairs and Government Affairs Departments continue to monitor the issue and will provide updates as they become available.