A dark money group run by a liberal investor and financed by a handful of seven- and eight-figure donors is bankrolling over a hundred disparate initiatives and nonprofit organizations, some of which have popped up in electoral contests around the country, internal documents reveal.
From environmental restrictions in Colorado to an education-related ballot initiative in Mississippi to "issue ads" attacking a vulnerable Republican U.S. Senator in New Hampshire, groups organized under the auspices of the New Venture Fund are involved in numerous political and policy efforts.
NVF is an umbrella group that acts as a fiscal sponsor for scores of left-wing nonprofits and policy initiatives. As of 2012, it was helping to run and steer funds to 105 such groups, according to internal documents obtained by the Washington Free Beacon.
Those documents reveal for the first time the full scope of NVF’s network of supported groups from 2010 through 2012. That network is likely larger by now: in 2010, the group took in just $16.3 million in contributions, according to annual tax filings; by 2013, that number increased almost seven-fold to $111.8 million.
The group’s recent advocacy for a proposed Mississippi ballot measure illustrates how it funnels high-dollar contributions to political and policy activities.
Campaign finance reports in the state show that NVF has donated just under $2 million to a group called Better Schools, Better Jobs, which is pushing for the passage of Initiative 42. That measure would advance an amendment to the state constitution guaranteeing levels of public education funding.
However, NVF is not the source of the funds. According to the Associated Press, the money it has donated came from three sources: the William K. Kellogg Foundation; the Mississippi timber magnate and former Democratic secretary of state Dick Molphus; and the technology mogul Jim Barksdale.
Their donations officially went to NVF, but the money is supporting the pro-Initiative 42 effort. Kellogg reported contributing $450,000 to NVF last year to "ensure quality free public education is a constitutional right for every Mississippi child," which is what Initiative 42 would do.
Kellogg says it did not run afoul of federal tax laws, which prohibit foundations from earmarking grant money to affect elections or legislation. It cited the "project grant rule" exemption, which allows foundations to indirectly support advocacy efforts as long as the funds are not earmarked for political purposes.
Though legal, the process can also obscure the sources of funds used to influence the political process, a charge often levied at conservative "dark money" groups. The Kellogg Foundation cannot advocate for or against a ballot measure, but it can steer funds to NVF. In effect, Kellogg is subsidizing the pro-Initiative 42 effort and voters are none the wiser.
NVF-backed ads are also showing up on the airwaves in New Hampshire, where a group called Allied Progress is targeting Sen. Kelly Ayotte.
Allied Progress is "a project of the New Venture Fund," according to its website. Accordingly, donations to the group are reported as contributions to the New Venture Fund. So while donors are indirectly bankrolling "issue ads" targeting a vulnerable Senate Republican, NVF’s arrangement with the group obscures the sources of those funds.
Campaign finance reports in Colorado show that NVF, then called the Arabella Legacy Fund, contributed $174,000 in 2012 to a ballot committee pushing for Amendment 58, a measure to increase taxes on oil and gas companies in the state. NVF’s structure makes it difficult to know which donors provided the funds that it then passed on to that group.
NVF’s tax status allows it to withhold the names of donors whose funds end up financing advocacy on measures such as Amendment 58 or Initiative 42. Its latest annual tax filing lists eight donations ranging from $2.6 million to $22.3 million but redacts the names of the donors.
The group took in more than $50 million in contributions earmarked specifically for its 105 subsidiary groups and initiatives in 2012, according to the internal documents. It took in just $16,403 that was not restricted to the purposes of its supported groups.
Of the $36.6 million NVF spent on those subsidiaries’ behalves that year, nearly half was granted to other groups pursuing similar political and policy goals, allowing its donors to steer money to those groups without attaching their names to those contributions.
That structure allows NVF to support policy work on behalf of clients with explicitly left-wing policy goals by backing organizations with more moderate-sounding views.
NVF represents a number of groups that push stringent environmentalist policies, such as the Fossil Fuel Reduction Project and True Friends of Coal, according to the internal documents.
It also uses donations to its subsidiaries to fund other groups that push environmental policies in ways that appeal to voters who might not share an explicit anti-fossil fuel agenda, such as Backcountry Hunters and Anglers, Trout Unlimited, and the Bull Moose Sportsmen’s Alliance, all of which received NVF grant funds in 2013.
The conservative Environmental Policy Alliance dubs those groups "green decoys," saying they couch environmentalist rhetoric in language that appeals to centrist or even right-leaning voters. "Far from groups representing mainstream hunters, anglers, and other sportsmen, … these groups serve as camouflage for radical environmental interests," the group wrote in a recent report.
Eric Kessler, NVF’s president, engages in environmental advocacy through his "impact investing" firm Arabella Advisors, which shares staff with NVF under an "administrative services agreement." NVF paid Arabella more than $5.5 million for its services in 2013, tax filings show.
Arabella advises foundations and wealthy individuals on how to invest their money in ways that advance their philanthropic and policy objectives.
A spokesman for the group declined to say how it invests that money. "Our clients are private as are the details of our work for them," the spokesman said in an email. Because Arabella is not a certified financial advisor, it is not required to disclose such information to the Securities and Exchange Commission."
Arabella is a booster of efforts to push institutional divestment of fossil fuels. It released a report last month gauging the success of that movement, which was quickly promoted by NVF grantees 350.org and the Center for American Progress. Even the liberal Mother Jones pointed out that the study was based on misleading financial calculations.