A Shaft of Light in the Dark Money Gloom

by James A. Bacon

As a follow-up to yesterday’s “dark money” post comparing the resources available to the conservative Thomas Jefferson Institute for Public Policy (TJI) and the liberal Commonwealth Institute for Fiscal Analysis (CI), it is only fair for me to note that CI did disclose its major donors in its 2016 990 form. In numerous posts, I have lamented the lack of full disclosure by nonprofits active in the public-policy arena. However, some groups have voluntarily provided that information. CI is one of them, and it deserves credit for its transparency.

An inspection of CI’s major contributors is revealing. I present the details here not out any sense of “exposing” the think tank but to provide a glimpse of the routine things occurring outside the public eye. As an old journalistic saying goes, “Follow the money.” Virginia journalists have shown little interest in following the money unless it leads to a deep-pocketed corporation. But there are billions of dollars sloshing around the nonprofit sector. If citizens have any interest in developing a full understanding of how public policy is made in Virginia, they should agitate for universal disclosure of the kind of information that CI provided voluntarily.

CI, which reported $1,295,000 in revenue in 2016, relied most heavily upon funding from the Center on Budget and Policy Priorities — $265,000, to be exact. That Washington, D.C.-based research and policy institute describes its mission as analyzing state and federal budget proposals, “focusing especially on programs for low- and moderate-income families.” CI notes that it is one of 40 similar organizations in the State Priorities Partnership — coordinated by the Center on Budget and Policy Priorities — which share “credible, independent and accessible information and analyses of fiscal and economic issues with particular attention to the impacts on low- and moderate-income persons.”

The second biggest contributor is the Boston-based Stoneman Family Foundation, another supporter of liberal and progressive causes. Stoneman donated $150,000.

Number three on the list was Community Catalyst, also of Boston, which donated $142,000. Its mission: “Organize and sustain a powerful consumer voice to ensure that all individuals and communities can influence the local, state and national decisions that affect their health.”

The fourth biggest contributor was the Annie E. Casey Foundation, of Baltimore, which chipped in $115,000. Annie E. Casey, which should be familiar to those who listen to National Public Radio, states that it is “devoted to developing a brighter future for millions of children at risk of poor educational, economic, social and health outcomes.”

The last large contributor was the Consumer Health Foundation, of Washington, D.C., which provided $40,000. CHF, which provides grants to organizations in Washington, D.C., suburban Maryland, and Northern Virginia, believes that “to achieve health equity, we must also achieve racial equity and economic justice.”

All told, these top six donors contributed $712,000 out of $1,295,000, or about 55% of CI’s total revenue. The implication of these numbers is that CI has significant revenue sources other than these deep-pocketed donors.

CI also disclosed four groups to which it gave “grants and other assistance.” They include:

  • $62,000 to the New Virginia Majority, of Alexandria, for grassroots engagement. New Virginia Majority, according to its website, organizes within the Latinx, African American, Asian American Pacific Islander and youth communities. “Together, we vote, mobilize and engage to end mass incarceration, build just economic policies, protect immigrants and preserve the environment.”
  • $23, 751 to the Virginia Poverty Law Center, of Richmond, for legal analysis. The VPLA is “committed to leading and coordinating efforts to seek justice in civil legal matters for low-income Virginians.”
  • $25,000 to Progress Now Education. ProgressVA, according to its website, “is a multi-issue progressive advocacy organization that combines cutting edge online organizing and communications with rapid and hard-hitting earned media strategies.”
  • $25,000 to Virginia Civic Engagement, of Richmond, for grassroots engagement. This group describes itself as “quietly doing the work behind the scenes helping our partners get stronger, talk to more voters year-round, and work together to make the systemic changes Virginia needs.”

These disclosures reveal that CI is part of an extensive nonprofit web of liberal and progressive organizations whose purpose is to influence public opinion and public policy in Virginia. Virginia Civic Engagement lists the following among its partners:

ADAMS Center
​Advancement Project
APRI
CASA
Empower Hampton Roads
Equality Virginia
Fair Elections Legal Network
Faith in Public Life
Forward Together
HOLA
League of Women Voters
LULAC
NAKASEC
NARAL
Network NOVA
New Virginia Majority
NLIRH
One Virginia 2021
Peninsula Indivisible
Planned Parenthood
Progress VA
Project Vote
SEIU Virginia 512
​South East Care Coalition
Spread the Vote
​State Innovation Exchange (SIX)
The Commonwealth Institute
Together We Will
UFCW Local 400
UULM
VEA
VICPP
Virginia Coalition for Immigrant Rights (VACIR)
Virginia Conservation Network
Virginia League of Conservation Voters
Virginia Poverty Law Center
Virginians for High Speed Rail
Voto Latino
Working America

Likewise, there are numerous nonprofit conservative groups in Virginia. I have no idea if they are as numerous or well funded, but they form their own ecosystem. One organization, the Tuesday Morning Group, maintains a monthly forum where conservative and libertarian activists can meet, mingle, and discuss timely issues. (I occasionally attend their meetings.) I have not checked their 99o forms, but I would hazard a guess that conservative groups are just as spotty as liberal groups in the degree to which they voluntarily report their sources of financial support.

Bacon’s bottom line: There are dozens and dozens of nonprofit organizations in Virginia that influence public policy at a state/local level. They are required to file 990 forms, but the groups vary by how seriously they take their obligation to full disclosure and reporting. Virginians are largely ignorant of the role these groups play, how much tax-advantaged money they raise, where they get their money, and how they spend it.

While the information is spotty, a considerable amount is available. The logical group to compile this data is the Virginia Public Access Project, which already collects and publishes data on campaign contributions, lobbying activities, gifts to legislators, and other categories of information. VPAP has credibility as an honest broker of information (despite the fact that it refuses to include Bacon’s Rebellion news stories in its VA News newsletter!!). I urge Executive Director David Poole to undertake this task.

A dissenting view. A correspondent who asked to remain unidentified raises a legitimate point in defense of non-disclosure. Why are nonprofits, he asks, allowed to keep their donors private?

In 1956, the Democratic Attorney General of Alabama sought to force the NAACP to release its membership records. There was no doubt why: To harass those in Alabama who supported the NAACP’s activity on behalf of civil rights.

The Supreme Court ruled it unconstitutional. Said Justice John Marshall Harlan: “Immunity from state scrutiny of petitioner’s membership lists is here so related to the right of petitioner’s members to pursue their lawful private interests privately and to associate freely with others in doing so as to come within the protection of the Fourteenth Amendment” and, further, that freedom to associate with organizations dedicated to the “advancement of beliefs and ideas” is an inseparable part of the Due Process Clause of the Fourteenth Amendment. The action of the state’s obtaining the names of the Association’s membership would likely interfere with the free association of its members, so the state’s interest in obtaining the records was superseded by the constitutional rights of the petitioners.”

That concern is just as relevant today as it was back in 1956. Now, instead of segregationists harassing people, left-wing Twitter Outrage Mobs are doxxing people. There are no perfect solutions. As with so many issues, we have to find the right trade-off between competing priorities. But in the end, I believe transparency should prevail.

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4 responses to “A Shaft of Light in the Dark Money Gloom

  1. Need to change the tax laws. No entity should have tax-exempt status when it tries to influence public policy through paid employees or third-party contractors (or by giving money to similar NGOs). If you want to be tax-exempt, spend the money directly on public needs, such as providing free dental checkups, preserving open space by paying for it, helping new entrepreneurs start small businesses, etc. And to boot, we’d cost a lot of NGO lobbyists their jobs. They could move to New Bedford, MA or Omaha, NE and get real jobs.

  2. So much for The “lefties rule dark money” idea

  3. ” So you want REAL transparency”? ” Well, not exactly, and in any case it’s someone elses job……….. and we sure as heck don’t want anonymous donors revealed because bad stuff could happen to them……….”

    🙂

  4. Here is one view of the Citizens United decision …
    “The high court reasoned that as long as these unlimited funds aren’t spent in coordination (a crucial and controversial distinction) with the actual campaign, they do not “give rise to corruption or the appearance of corruption.” Thus, they would be legal from that point forward.”

    Well, certainly Dark Money doesn’t give rise to the ‘appearance’ of anything. That is the trouble. Even the candidate doesn’t know what is going on according to Davis. Jim is right to advocate for transparency. … AND ‘coordination’ with the campaign doesn’t matter for the donor who comes in after the win with their requirements and their canceled checks. What nonsense!

    Former 13-year VA Republican Congressman Tom Davis is a member of the ReFormers Caucus of Issue One. In an interview he was asked …” If you could wave a magic wand and fix something, where would you start? What would you change?”
    His answer …the need for transparency.

    “For any ad that mentions a candidate, you’ve got to disclose your contributors. It’s fine and well for 501(c)(4)s to come in and take stands on issues. But once you start mentioning a candidate, you ought to be subject to the same scrutiny everybody else is, and the cost of that is you’re going to have to reveal your contributors. That’s a start. This at least makes it transparent — something that it’s not today.”

    The 2 decisions, Valero and Citizens United combined to unleash political monies. There is one big difference among the 2 non-profit issue groups, the 501C4s and the 501C3 old-line issue groups like the League of Women Voters and most Environmental organizations. “501(c)(3) nonprofits are limited to conducting only ‘insubstantial’ lobbying efforts, determined by the size of the organization. Typically, insubstantial means that you would allocate less than 10 percent of the nonprofits total operating budget. If the nonprofit is found to have engaged in substantial lobbying efforts, it will lose its exempt status. Further, these organizations are prohibited from supporting or endorsing any candidate for public office. C3s donors can deduct contributions from their personal income taxes as charitable contributions.

    By contrast, 501(c)(4), also listed as non-profit organizations, may engage in unlimited lobbying and promotion of candidates, provided that these efforts dovetail with the purpose of the organization. Their donors cannot deduct contributions from their taxes.

    It is all pretty confusing and as Davis said …’the wild west’out there now as Davis said. Here is a list from IssueOne about today’s NC election …

    • $20.3 million: The amount that candidates, outside groups, and political parties have invested so far in this election. Of that, $8.1 million was controlled by the candidates, $7.8 million was spent by outside groups, including super PACs and dark money groups, and $4.3 million was spent by the NRCC and the DCCC.

    100%: The percentage of spending by the party committees that was negative.

    • 100%: The percentage of dark money in this race that supports Democrat Dan McCready, with four liberal dark money groups spending a combined $1.6 million.

    • 29: The number of outside groups — including super PACs, political action committees, and dark money groups — active in this race. The top-spending group — the Congressional Leadership Fund super PAC, which supported Republican Dan Bishop — alone spent $2.3 million, accounting for about 30% of all spending by outside groups in the race.

    • 2.6-to-1: The ratio of campaign cash raised by Democrat Dan McCready ($5.4 million) versus Republican Dan Bishop ($2.1 million).

    • 2.5-to-1: The ratio of money spent on ads by the NRCC ($3.1 million) versus money spent on ads by the DCCC ($1.2 million).

    • 1.4-to-1: The ratio of money spent by other outside groups supporting Republican Dan Bishop ($3.9 million) versus money spent by other liberal outside groups supporting Dan McCready ($2.7 million).

    Guess we will see how the money performs.

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