In 2019, a new member of Arabella Advisors’ $1.7 billion “dark money” network appeared: the North Fund. So what do we know about this new 501(c)(4) group?
In 2019, its first year of operation, North Fund brought in close to $9.4 million—100 percent of which came from Arabella’s top (c)(4), Sixteen Thirty Fund. The bulk of those funds formed an initial endowment of $7.5 million that grew to assets totaling more than $25 million just one year later. Amazingly, Sixteen Thirty Fund was also responsible for roughly half of the $66 million North Fund brought in in 2020.
Unlike the network’s other nonprofits, North Fund doesn’t share Arabella’s L Street address in Washington, DC., but lists the address of a virtual office space renter on Connecticut Avenue, Carr Workplaces.
But North Fund’s books and records are in the care of Arabella Advisors, with which the nonprofit “contracts” to provide “administrative support, accounting services, and legal guidance” according to its 2020 IRS Form 990 disclosure. That year North Fund paid Arabella Advisors $941,615 for its services.
This mirrors the close relationship between Arabella Advisors and the other members of its nonprofit network, which are legally distinct entities that contract with the company for compliance, grantmaking guidance, and staffing support and use Arabella’s office space. This arrangement isn’t uncommon. What is unusual is the role Arabella senior leadership played in founding each of these nonprofits—in effect creating the company’s own “clients.”
North Fund is no exception. Arabella general counsel Saurabh Gupta, whose background includes extensive work with teachers unions and “state-wide ballot initiatives,” is listed among North Fund’s beneficial owners in its filings with the District of Columbia.
Gupta doesn’t appear in North Fund’s board of directors, which is led by Jim Gerstein, founding partner of the Democratic polling firm GBAO Research and Strategy. Gerstein is a former campaign advisor to multiple Democratic politicians and the 1996 Democratic National Convention, and he led James Carville’s Democracy Corps, a nonprofit polling group that services the Left.
Notably, GBAO’s clients include Pierre Omidyar’s Omidyar Network, the Rockefeller Foundation, Center for American Progress, Sierra Club, Service Employees International Union (SEIU), Planned Parenthood, and Arabella’s Hub Project—among dozens of other Democratic committees, politicians, ballot measures, and “progressive” advocacy groups.
Other North Fund board members include Christina Uribe, a union organizer with the National Education Association, and Melanie Beller, a Texas consultant who works on “voter enfranchisement” and “health care reform,” among other issues. Beller is a former vice president of government affairs for the environmentalist Wilderness Society.
The Big Shuffle
One of the key phenomena we’ve noted is how the Arabella nonprofits shuffle millions of dollars among themselves each year.
In 2020 alone, North Fund gave $500,000 to the network’s biggest 501(c)(3), New Venture Fund, which gave $11 million back to North Fund. Similarly, Sixteen Thirty Fund distributed $30 million to North Fund, which gave the former $800,000.
Almost nothing is known about the purpose of these intra-network grants, much less their original donors. The most likely explanation is that they both further obscure the Arabella network’s donors and fuel its complex “pop-up” campaigns, using 501(c)(3) dollars to free up (c)(4) funds for advocacy purposes since money is fungible.
Regardless, North Fund’s involvement in this intricate money flow further highlights its place in the network.
That includes funding former Arabella pop-up groups, such as States Newsroom, a national set of left-leaning online news outlets incubated as the Newsroom Network by Arabella’s Hopewell Fund. In 2020, North Fund funneled $85,000 to States Newsroom for “capacity building.”
We’ve also identified North Fund’s involvement in at least one (c)(3)-(c)(4) pop-up pair: Voting Rights Lab Action, the advocacy arm of the New Venture Fund front Voting Rights Lab, a self-described “campaign hub” designed to “supercharge the fight against voter suppression” and “transform our voting systems.”
It’s common for political groups to maintain a 501(c)(3) research and fundraising arm that pairs with a 501(c)(4) lobbying arm, often with overlapping staffers and leadership. The goal is to maximize funding and advocacy capacities by taking advantage of the tax deduction for donating to (c)(3) groups and higher lobbying capacity afforded to (c)(4)s, respectively. For example, the conservative Heritage Foundation and left-wing Center for American Progress both have “action funds” for this reason.
Arabella runs the same model for many of its pop-up groups, which shelter under the 501(c)(3) and (c)(4) tax status of its in-house nonprofits instead of obtaining their own independent status. North Fund ran at least one such pop-up pair, placing it squarely in Arabella’s empire.
What We Don’t Know
We’ve long suspected that the vague names of Arabella’s nonprofits—New Venture Fund, Hopewell Fund, Windward Fund, and Sixteen Thirty Fund—are intended to ward off scrutiny. They may have historical significance, since Boston’s Puritan founders departed England in 1630 aboard the ships Arabella (or Arbella) and Hopewell. “New venture” might refer to the Massachusetts Bay Company, while “windward” is a nautical reference to the side of a ship facing the wind.
“North Fund” is more inscrutable.
More importantly, we don’t know why Arabella chose to add a fifth nonprofit (and second 501(c)(4)) to its network. Again, the most likely reason is obfuscation. Since we began reporting on Arabella and its nonprofits in late 2018, Sixteen Thirty Fund has become red-hot. Funneling cash through a new (c)(4) would provide cover for a short period before journalists catch on.
That’s not crazy given the huge amount of money North Fund has pumped into independent expenditures meant to aid Democratic Senate candidates as well as numerous ballot initiatives in the 2020.
Still, we know enough to include North Fund among the other Arabella “sisters.” We expect more information to reveal itself after the 2022 midterm elections.