How do nonprofit funding networks like Arabella and Tides operate and what transparency rules govern them?

1. How the networks are structured and run

Arabella historically combined a for-profit advisory arm and several affiliated nonprofits—the “seven sisters” like New Venture Fund, Sixteen Thirty Fund and Hopewell—that raise and spend large sums while paying management and consulting fees back into the ecosystem, and the organization has recently been reorganized under entities like Sunflower Services and Vital Impact ^{[5] [6] [1]}. Tides operates as a Nexus of public charities and a Tides Center that provides fiscal sponsorship and donor-advised services, allowing projects to operate under Tides’ tax-exempt umbrella while Tides retains formal control of funds ^{[2] [7]}.

2. What “fiscal sponsorship” and donor-advised funds (DAFs) actually do

Fiscal sponsorship lets a tax-exempt sponsor accept gifts and grant to projects that lack independent tax-exempt status, effectively incubating campaigns and “pop-up” organizations under the sponsor’s legal roof; donor-advised funds place money with a public charity that then makes grants at the donor’s recommendation ^{[7] [2]}. That model speeds project launch, centralizes back-office services, and preserves tax benefits for donors, while the sponsoring nonprofit retains legal oversight of how funds are spent ^{[2] [8]}.

3. How anonymity and “pass-through” funding arise—and why critics call it dark money

Because public charities and many fiscal-sponsorship arrangements report grants on IRS Form 990 but are not required to disclose the identities of individual donors to DAFs or many public charities, the original source of a large grant can remain hidden even when substantial sums are regranted for political or advocacy work; critics therefore label such flows “dark money” when they influence elections or policy without donor attribution ^{[5] [1] [9]}. Investigations and watchdogs have traced sizable revenues and regranting—billions across Arabella entities in recent cycles—while also documenting that much of the giving goes to small grants or to established nonprofits ^{[10] [11]}.

4. Legal and transparency rules that govern the practice

Nonprofits must file annual information returns (Form 990 series) and must provide copies of the three most recent returns and their tax-exemption application on request, setting a baseline of public financial disclosure; however, donor-advised funds and many public charities are not required by federal law to publish donor identities, and 501(c) social-welfare organizations have broader latitude to engage in political activity without the same disclosure obligations as political committees ^{[3] [4] [2]}. The legal line between permissible issue advocacy and prohibited partisan electioneering is a key constraint, and sponsors assert they comply by keeping explicit coordination and direct campaign expenditures within legal bounds ^{[8] [2]}.

5. Competing interpretations, motives, and the politics of reform

Supporters of intermediary models argue these organizations are essential philanthropic infrastructure—efficient platforms for movement-building, project incubation, and donor privacy—and that sensational “dark money” narratives misidentify operational intermediaries as puppeteers of content ^[4]. Critics and some conservative watchdogs portray the same mechanics as deliberate opacity enabling political influence and have pushed for congressional scrutiny and reform, a dynamic reflected in recent briefings and media exposés and in debates over whether foundations and fiscal sponsors should face tougher disclosure rules ^{[5] [10] [9]}. Reporting shows both extensive legitimate grantmaking to mainstream charities and targeted political spending routed through the same legal channels, a duality that fuels the political argument over transparency versus donor privacy ^{[11] [1]}.