“In Defense of ‘Dark Money’”

“In Defense of ‘Dark Money’”

Nan Aron and Abby Levine, both from the invaluable Alliance for Justice, have an important article in today’s American Prospect making a progressive defense of the use of 501(c)(4) social welfare organizations to oppose the Trump agenda, even though c4s do not disclose their donors (“dark money”). The authors admit “It’s a head-spinning development for some—and comes with no shortage of angst for committed progressives who are strongly allergic to the “dark money” notion and all that it implies.” 

Nevertheless, Aron and Levine, themselves mainstays of progressive advocacy, say:

there is a very real risk that if donors on the left become squeamish about supporting new 501(c)(4)s, the progressive community will lose the huge advantages of social-welfare organizations in the era of Trump, the worst possible time to sacrifice any tool in the toolbox.

Code word alert (in a good way): AFJ is very big on “tools.” It created and continues to sponsor the Bolder Advocacy website, with its “toolkits” for advocates. It’s probably that experience with helping advocates effectively convey their messages that helps AFJ cut through the political undercurrents, and understand the true value of allowing freedom to advocate. Indeed, it is, in fact, “bolder” to challenge the thinking that “dark money” is inherently bad.

But this isn’t the first time progressives have argued the value of c4s, despite dark money. Eliza Newlin Carney wrote an article in April asking “Should ‘Dark’ Money Power the Resistance to Trump?” (A quibble, because Carney, often touted as an expert in election law, should know better: she says the IRS “approves” c4s; it doesn’t. Unlike 501(c)(3) charities, C4s automatically have that status upon their organization – although they can lose it – so the IRS simply “recognizes” them, which is one reason the IRS application Form 1024 says so in its title. The IRS does “approve” c3 charities, because they can receive tax-deductible contributions, which c4s cannot.)

Why is this important? Not so much because those who complain about “dark money” are being hoist on their own petards. But because the explanation undercuts a primary argument against campaign finance “reform.” Carney makes that point explicitly in her piece: “If Senators up for reelection get help from progressive groups operating in secrecy, it potentially undercuts Democrats’ campaign finance message.”

But that battle was lost long ago. Progressive groups have used c4s extensively in recent years. In fact, in the 2016 elections, according to Carney, almost 40% of all undisclosed campaign expenditures (itself a tiny percentage of all campaign spending, by the way) came from progressive groups.

So it is refreshing to see Aron and Levine come out so strongly in favor of allowing Americans of all ideologies band together to advocate their causes:

Well-run and transparent 501(c)(4) organizations can serve the American democratic process well. They provide a forum for individuals to come together and speak out collectively on the issues that matter to them most. While sometimes that may mean taking a political stance on the issues of the day, 501(c)(4)s focus on social welfare, not political activities. These organizations got a bad rap after the IRS scandal, but many of these groups have also come together to further social welfare and to take steps to prevent future abuses. A vibrant 501(c)(4) nonprofit sector is indispensable, and anyone concerned with bolstering the progressive movement should consider devoting more resources to these organizations.