Wealthy Donors Use Nonprofits to Obscure Political Funding Sources

Nonprofit organizations are increasingly being used by wealthy donors to obscure the sources of political funding in the United States. This practice has raised concerns about transparency and accountability in political financing ^[1][2].

The Sixteen Thirty Fund, a 501(c)(4) nonprofit administered by Arabella Advisors, serves as a fiscal sponsor for progressive projects. It is not required to disclose its donors, despite spending significant amounts on political activities. In the 2024 election cycle, the fund spent approximately $311 million on progressive causes, including abortion rights, expanded voting rights, and climate change initiatives ^[1].

In 2023, four donors contributed the majority of the Sixteen Thirty Fund’s revenue, with donations of $50.5 million, $31.4 million, $21.8 million, and $13.6 million, respectively ^[1]. Similarly, the New Venture Fund, part of the Arabella Advisors network, acts as a pass-through agency, funneling millions of dollars in grants for wealthy donors to groups with minimal disclosure requirements ^[2].

The Tides Foundation is another organization that distributes money from anonymous donors to other organizations, often politically progressive ones. Recently, the Black Lives Matter Global Network Foundation voluntarily dismissed its lawsuit against the Tides Foundation, retracting all claims and settling with prejudice ^[3].

In response to these practices, the 2026 DISCLOSE Act has been proposed. This legislation would require super PACs, 501(c) “dark money” groups, corporations, and other organizations spending more than $10,000 in elections or judicial nominations to promptly disclose donors contributing more than $10,000. It also seeks to eliminate the use of transfers between organizations to cloak donor identities ^[4].

Dark-money expenditures in U.S. elections have increased significantly, from less than $5 million in 2006 to more than $300 million in the 2012 cycle, and topped $1.9 billion in the 2024 cycle ^[4].

What Is Known

Nonprofit organizations like the Sixteen Thirty Fund and the New Venture Fund are being used to channel significant political donations without disclosing donor identities. The proposed DISCLOSE Act aims to increase transparency in political funding ^[1][2][4].

What Remains Unclear

It remains uncertain how effective the DISCLOSE Act will be in curbing the use of nonprofits to obscure political funding. The extent to which these practices influence political outcomes is also not fully understood ^[4].