Two left-wing organizations battling President Donald Trump's Cabinet nominations are using a tax law loophole to effectively hide their finances from the public, The Washington Free Beacon reported on Wednesday.
Allied Progress has fought against Trump nominees to head the Department of Commerce and the Treasury, and it took credit for Andy Puzder's withdrawal as the nominee for labor secretary. Its "Trump Transparency Project" says in its website that it is dedicated to holding Trump's administration "accountable for its economic appointments and policies that betray hardworking Americans."
Identifying the source of the funds that allow Allied Progress and its advocacy arm to carry out their anti-Trump efforts — such as running television ads, releasing opposition research dossiers, and organizing Senate letter-writing campaigns — is virtually impossible. This is due to the groups' arrangements with New Venture Fund and Sixteen Thirty Fund, two left-wing organizations that both handle legal compliance for many groups organized as tax-exempt 501(c)(3) charities.
While it is standard practice for a political advocacy group to not say where their funds originate, in most instances it is possible to ascertain the identity of many donors because they are required to disclose contributions to such groups in their financial filings.
However, because the groups are not stand-alone organizations but part of the larger New Venture Fund or Sixteen Thirty, their donors can list the parent organizations in their respective disclosures and it is thus virtually impossible to know to which smaller group the money went.
"Intermediaries stand at the center of a new 'shadow giving system' that has made a full end-run around yesterday's philanthropic reporting requirements," Inside Philosophy editor David Callahan wrote in a column last week. "The growth of anonymous giving is a big problem during a moment when philanthropy has become more politicized."
This system can also aid groups in getting around restrictions on the money that nonprofits can spend on grassroots advocacy and lobbying activities, both of which are subject to limits under federal law.
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