Efforts to overturn the election. Jan. 6 organizers. White supremacist groups. And more than a dozen private and public universities.
They all have one thing in common: They received anonymous funding funneled through a single conservative dark money behemoth.
That’s the news in the latest IRS filing from Donors Trust—a conservative, Koch-aligned nonprofit which does not need to reveal the names of its donors and has been called the “dark money ATM of the right.”
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The disclosure, first obtained by CNBC, shows the group channeled major support for entities which fought to overturn President Joe Biden’s 2020 victory and organized the Jan. 6 rallies in Washington, D.C.
Donors Trust also gave more than $2 million to groups linked to white supremacists, including the VDARE Foundation.
Norm Eisen, a government ethics expert and senior fellow at the Brookings Institution, analyzed the filing with colleagues and remarked that it was “profoundly concerning for the future of our democracy.”
“The Donors Trust is taking advantage of the dangerous opacity of our tax and related laws and regulations to fund alleged white supremacist and white nationalist associated groups, those who were bad actors in wrongly attempting to spread misinformation about or overturn the legitimate 2020 election results, and even groups that were responsible for the rally that helped trigger the Jan. 6 insurrection,” he told The Daily Beast.
But the same vehicle that quietly fuels white supremacist rhetoric also fanned money out to major educational institutions, including state public schools like the University of Texas, Virginia Tech, Michigan State University, and Florida State University. Leading private colleges like Georgetown, Vanderbilt, and a conservative think tank headquartered at Brown University also drew anonymous support.
At the same time, the fund shipped millions of dollars to right-wing organizations agitating for education reform, including to groups pushing unfounded fears about critical race theory.
The Donors Trust primarily funds right-leaning, libertarian, and free-market advocates. It describes itself as “a charitable savings account”—a go-between that allows wealthy donors to deposit money in lump sums, where it gets invested at tax-free growth. They can later direct contributions at any time while remaining anonymous.
These donor-advised funds are common across the ideological spectrum, and “act as a clearinghouse of donated money,” according to Phil Hackney, a nonprofit law expert at the University of Pittsburgh School of Law.
“Donors can contribute to these organizations and take a charitable deduction, and they let the group hold the money, invest it, and then contribute to other charitable organizations when the donor advises them to do so,” Hackney explained.
Donors, particularly wealthy ones, often seek anonymity from the public, “particularly where they’re donating to controversial causes,” he said.
Donors Trust posted record numbers in 2020. The group, which has hauled in more than $1 billion since 2016, raised more than $360 million last year, while spreading around $182 million across 339 organizations. Donors Trust itself held on to about $174 million in contributions, bringing its total assets to $607 million.
"WASHINGTON, DC - JANUARY 06: Pro-Trump supporters storm the U.S. Capitol following a rally with President Donald Trump on January 6, 2021 in Washington, DC. Trump supporters gathered in the nation's capital today to protest the ratification of President-elect Joe Biden's Electoral College victory over President Trump in the 2020 election. (Photo by Samuel Corum/Getty Images)"
Samuel Corum/GettyWhile the group’s 501(c)3 tax status affords anonymity, reporting has identified several major conservative backers over the years, like the Koch and Bradley families. The biggest single donor this year contributed $158 million, and eight individuals accounted for $270 million in donations—75 percent of the total.
Asked about the money raised for white supremacist and anti-democratic groups, Donors Trust president and CEO Lawson Bader provided a statement touting the fund’s financial success, claiming the organizations they support are “worthy causes” and that the donations “serve the public good.”
“2020 was a year of great uncertainty and change. Despite this, donors stepped up to support public charities, especially those embroiled in alleviating and addressing the vast economic and health challenges facing the country,” the statement said. “Many account holders held ‘rainy day’ charitable funds in their respective accounts, which made it possible for many to extend their generosity and serves as a reminder about the essential nature of donor-advised fund providers during times of crisis.”
Bader, who pulled a $390,000 salary in 2020, said the $186 million distributed last year was “to serve the public good.” He claimed the group has, since its 2001 inception, “distributed more than $1.5 billion to thousands of worthy causes and institutions focused on science, medicine, religion, public policy, the arts, civics and health.”
A representative from a public relations firm that serves the company told The Daily Beast that the organization exists to give legitimate groups “a seat at the table” and “not to advance any cause,” including “those they may disagree with.”
But that appears to contradict with the mission statement on the group’s IRS filing, which states that its purpose is “to promote liberty through limited government, personal responsibility, and free enterprise by providing financial support to other publicly supported charities that share in its purpose.”
It is unclear from Bader’s statement which goals the Donors Trust organization shares with some of its “worthy causes,” including groups that have been associated with white identity and white supremacist movements, like VDARE, Young Americans for Liberty, and the New Century Foundation.
According to the Southern Poverty Law Center, VDARE, which received $70,000 last year and nearly $2 million in 2019, “regularly publishes articles by white supremacists.” YAL, which received $1.3 million through Donors Trust in 2020, has been affiliated with the white nationalist and the neo-Nazi organization Identity Evropa. The group removed its president after multiple women leveled allegations of sexual assault in January. And another $600,000 went to the New Century Foundation, which SPLC, the Anti-Defamation League, and academics consider a white supremacist group.
The Donor Trust’s self-described efforts to “serve the public good” included bankrolling an array of groups which challenged the 2020 election and seeded unsubstantiated claims of voter fraud. Those organizations received nearly $10 million in anonymous cash last year, according to an analysis of the filing.
Two of those entities played key roles in the events surrounding Jan. 6. One of them, the Tea Party Patriots, was listed as a rally organizer and received $250,000. The second, Turning Point—the right-wing youth group run by Charlie Kirk—provided buses to D.C. and participated in the “March to Save America” ahead of the event. Turning Point groups took in a total $780,000 from trust contributions in 2020.
Articles on the VDARE website also rejected Donald Trump’s loss and “cheered on” the rioters.
The Center for Security Policy, a group founded by anti-Muslim activist and conspiracy theorist Frank Gaffney—who also disputed the election results—received $1.1 million. After the riot, CSP told CNBC that Gaffney no longer ran the organization. But Gaffney also appears on the board of a Texas-based group called Propter Strategies, which was incorporated in June 2020 and raised $5 million last year through Donors Trust, split evenly between Propter’s “Delta Project” and the “Internal Security Project.”
While plenty of the disbursements went to traditional conservative groups, those groups have also increasingly been voyaging into far-right causes, like “election integrity.”
Take, for example, FreedomWorks, a group that collaborated with the Koch network to advance the astroturf Tea Party movement.
But after the election, the nonprofit FreedomWorks reportedly led protests against voter fraud. And in the wake of the Capitol riot, it partnered with Newsmax on a Sunday show called “Save Our Nation.” FreedomWorks received roughly $1.1 million in Donor Trust money last year, including for the Keep Elections Great Project and an initiative identified on the IRS filing as “Save Our Country.”
Additionally, FreedomWorks recently hired attorney and conservative activist Cleta Mitchell, who lost her job at Foley Lardner after participating in Trump’s phone call to Georgia Secretary of State Brad Raffensperger. Mitchell also now serves on the board at the Conservative Partnership Institute, a think tank which is also now pushing ideological election reforms and took in more than half a million dollars through Donors Trust last year.
Another traditional conservative cause—the Thomas More Society, which is a law firm that routinely files suits on behalf of right-wing interests, like abortion, gay marriage, and now, overturning the 2020 election—saw more than $2 million come its way through the dark money group.
About $1 million of that money was earmarked for the Amistad Project, an aggressive initiative created in August 2020 which litigated the election both before and after votes were cast, including challenges in five states. Donald Trump’s former election lawyer Jenna Ellis served as the society’s special counsel at the time.
And the Government Accountability Institute, a nonprofit co-founded by Trump loyalist Steve Bannon and backed by right-wing billionaire financier Rebekah Mercer, raked in $1.6 million through the fund last year. The GAI has pushed voter fraud claims, including in a “flawed” 2017 report that has since been removed from the White House website.
Still, these groups make up only a small slice of Donor Trust’s grants. The fund, which over the years has received major financial support from Republican megadonors, backs a panoply of influential conservative think tanks, nonprofits, and activists.
A number of universities, which accept anonymous direct donations, also draw support through the backchannel. The top recipient last year was George Mason University, a public institution in Virginia and home to the conservative Mercatus think tank and Antonin Scalia School of Law. GMU pocketed several million dollars in anonymous gifts, and it is unclear whether any donors have independently revealed themselves to the school.
“We need a tax and legal system that prevents these kinds of abuses of secrecy to undermine democracy,” Eisen said. “If we had a proper set of rules that applied to everyone, then the hidden donors, whoever they may be, would probably be ashamed to be associated with organizations that engage in this kind of activity. In the absence of those across-the-board fair and reasonable principles, we can’t benefit from the famous Brandeis maxim that ‘sunlight is said to be the best of disinfectants.’”
The Donors Trust public relations representative also pointed out that the group only funds “legit” organizations, who have the blessing of the IRS. But last year, Donors Trust gave $1.4 million to Fair Lines America, a group that was targeted in a watchdog complaint that July for misleading the IRS about $225,000 in 2018 revenue from Donors Trust.
Still, Donors Trust contributors support a number of smaller and apolitical groups as well. For instance, last year the fund raised $25,100 for the Special Olympics, and $15,000 for the Institute for the Study of Mongolian Dinosaurs.
—Updated at 10:30 a.m., 11/22/2021, to clarify that FreedomWorks has not directly received monetary donations from Koch groups
