Special Report

The State of the Left: Donors Take the Reins

The State of the Left (full series)
The Movement EvolvesBucking the Party SystemDonors Take the ReinsTechnological Revolutions

Another aspect of the Democracy Alliance worth noting: It quickly included unions—first, the SEIU (Service Employees International Union), which is itself a Left 2.0 entity thanks to Andy Stern’s re-shaping of it, and then, scared to be left behind, the AFL-CIO joined.

The Alliance’s agenda spells out the nature of the Left 2.0. Let me quote from a form for groups hoping to get Alliance money that briefly appeared on its web site. It lists the following priorities:

  • Building power and capacity in key constituencies: primarily Latinos and young people, as well as African Americans and unmarried women.
  • New media and technology: content generators, aggregators and distributors that disseminate and amplify progressive messages.
  • Law and legal systems: working to advance progressive values at all levels of the legal system.
  • Early-stage idea generators: including journals, academic networks, books, and non-traditional think tanks.
  • Content generation: traditional and new media vehicles capable of effectively promoting progressive ideas.
  • Civic engagement coordination: achieving greater efficiency and effectiveness through collaboration and creating economies of scale.
  • Civic engagement tools: increasing capacity and availability of data services, including online organizing services for civic engagement groups.
  • Election reform: structural reforms of our democratic process that will increase voter participation among progressive constituencies.
  • Youth leadership development: the youth part of the leadership pipeline, especially organizations targeting young people that work at scale.
  • Mid-career nonprofit leadership development: again, they want to strengthen the “leadership pipeline,” especially “organizations working at scale.”

The consequences of the Democracy Alliance’s emphasis on building a not-for-profit network of progressive activism was clear by 2014. CRC’s research identified that in the $9.6 billion universe of “traditional public policy nonprofits,” left-of-center organizations—environmentalist groups like the World Wildlife Fund, social liberal groups like Planned Parenthood, and think tanks like Center for American Progress—outspent conservative organizations by 77 percent to 23 percent. An analysis of foundation grantmaking on right and left came to a similar conclusion; the nonprofit space on the left far outstrips that on the right.

However, the methods the Left employs to make this vision a reality have undergone some streamlining. Project incubation and fiscally sponsored projects of preexisting organizations add an element of spontaneity and flexibility to the Left’s operations.

While organizations like the Tides Center have been around for a long time, offering incubation services and back-of-office support to new campaigns and movements, there’s simply been an explosion of new Potemkin-esque organizations resisting the Trump administration. And some of the organizers are making a pretty profit while supporting the Left’s agenda.

The for-profit consultancy, Arabella Advisors, is somewhat newer. Founded in 2005, it nominally offers wealthy donors counsel on philanthropy. In practice it uses nonprofit entities firmly under its control to incubate “pop up” campaigns tailored to fit different issue areas and policy debates. It’s four nonprofits reported a combined $417 million in 2016. Concerned about healthcare? Want to fight for so-called “net neutrality”? Want to obstruct judicial appointments? Arabella Advisors provides all the compliance and operational services to create a “nonprofit organization” without the hassle of seeking IRS recognition for new tax-exempt organizations—while still conferring the tax benefit to donors!

This nimble approach has proven highly effective. The judicial agitation group, Demand Justice, made a splash last summer after Justice Anthony Kennedy announced his retirement from the U.S. Supreme Court. With stunning effectiveness and highly charged rhetoric, Demand Justice mobilized protestors, held rallies, and lobbied the Senate to prevent Justice Kavanaugh from sitting on the highest court in the land. Though it ultimately failed in the Kavanaugh fight, Demand Justice led another charge against a Trump judicial nominee: the smearing of Neomi Rao in hopes of keeping her off the D.C. Circuit Court of Appeals. (We are happy to report that Demand Justice and its allies failed yet again!)

Fights over healthcare have also received this “pop up” treatment. Dozens of ready-made websites urging Floridians, Ohioans, and North Carolinians to support Obamacare. These seemingly “grassroots” movements are all operated by one of Arabella’s master nonprofit organizations. Another organization, Health Care for America Now (HCAN) recently re-emerged as a big player in the debate over the government’s role in insurance markets. Originally a project of the off-shore “dark money” Atlantic Philanthropies, HCAN found a new home with Arabella’s 501(c)(4) Sixteen Thirty Fund. It continues to mislead the American public about health insurance companies and the benefits of government-run healthcare.

As for the funders of these and the dozens of other projects managed by Arabella? No one can say for sure. Because all the projects are fiscally sponsored, they don’t file a Form 990 with the IRS. While an enterprising citizen could find some donors who give to Arabella’s nonprofit entities, it is impossible to determine whose money goes to which project.

In the conclusion of The State of the Left, learn how technology continues to be an Achilles heel for movements on the right.

Scott Walter

Scott Walter is president of Capital Research Center. He served in the George W. Bush Administration as Special Assistant to the President for Domestic Policy and was vice president at…
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