How have specific left‑leaning networks like Arabella Advisors/Sixteen Thirty Fund structured fiscal sponsorships to shield donor identities?
Executive summary
Arabella Advisors and its affiliated nonprofits — prominently the Sixteen Thirty Fund and the New Venture Fund — use fiscal sponsorship and a for‑profit management layer to route large sums into politically active projects while limiting public visibility into individual donors, leveraging tax rules that exempt many sponsored projects from separate donor disclosure [1] [2] [3]. Critics call this a conduit for “dark money,” while Arabella presents the model as standard fiscal‑sponsor and back‑office services that allow rapid project incubation; reporting shows both the scale of funds moved through the network and the structural features that make donor tracing difficult [4] [5] [6].
1. How fiscal sponsorship creates legal opacity
Fiscal sponsorship lets a larger nonprofit accept gifts and host projects under its tax‑exempt umbrella so those projects don’t have to form independent 501(c) entities or file separate IRS Forms 990; Arabella’s hubs such as the New Venture Fund and Sixteen Thirty Fund serve as fiscal sponsors that therefore can receive and disburse donor money without the sponsored project filing its own disclosure, complicating outside tracking of where money originated or ended up [2] [1] [3].
2. The for‑profit adviser in the middle: Arabella’s operational role
Arabella Advisors — a for‑profit consultancy — performs centralized financial management, compliance, grants administration and strategy for those funds and their sponsored projects, charging fees that both professionalize operations and concentrate transactional records in a private firm rather than across dozens of smaller nonprofits, which critics argue further shields donor identities even though aggregate flows appear on the sponsors’ tax filings [2] [3] [7].
3. “Pass‑through” grants and trade‑names: tactical anonymity
Investigations and watchdog reports describe “pass‑through” or regranting arrangements in which large anonymous gifts enter an umbrella fund and are then subgranted to dozens of sponsored projects or “pop‑ups,” sometimes operating under different trade names in campaigns; this layering and use of alternative group names can delay or obscure public notice of the original funder until after an election or campaign conclusion [1] [3] [8].
4. Scale and examples that sharpen the concern
Documented filings and press accounts show the network’s scale — combined revenues in the hundreds of millions and, across Arabella‑managed nonprofits, billions over recent years — and high‑dollar anonymous donations (for example, single anonymous gifts reported by media in the tens of millions), which have been cited as evidence the structure can move politically significant sums while preserving donor privacy [3] [9] [5].
5. Defenders’ framing and regulatory context
Arabella and some philanthropy observers argue fiscal sponsorship is a legitimate, long‑standing nonprofit practice that enables rapid program start‑ups, operational efficiency, and donor privacy sometimes justified to protect givers from retribution; they also point out that the network files required IRS returns that reveal aggregate receipts and expenditures even if individual donor names are withheld by law for many nonprofit categories [2] [4] [6].
6. Critics, political stakes, and unanswered technical gaps
Republican lawmakers, watchdogs, and conservative outlets label the model “dark money,” urging disclosure law changes and arguing foreign or single large donors can influence politics via 501(c) sponsors; reporting documents both the political uses of sponsored projects and the vulnerability of the structure to criticism — but public sources stop short of revealing all transactional origins or internal contracts between Arabella and donors, so some specifics about bidder/fee arrangements and donor instructions remain opaque in the public record [10] [11] [6].
7. Bottom line and limits of current reporting
The combination of fiscal sponsorship, a fee‑charging for‑profit manager, pass‑through grants and the use of trade names forms the practical architecture by which Arabella‑linked networks have channeled major anonymous gifts into advocacy and electoral work; existing reporting documents the mechanism and scale but cannot, from publicly available filings alone, map every donor to every subgrant, leaving empirical gaps that fuel both transparency advocates’ alarms and defenders’ claims about legitimate donor privacy [1] [3] [5].