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Denialists Anonymous for transparency

by DoDo Sat Feb 16th, 2013 at 06:29:41 AM EST

[Hoisted from the weekend's Newsroom]

Ever since the so-called Climategate scandal, the Denialosphere is awash with claims about lack of transparency on the part of climate scientists. The same level of transparency is not desired for the funding of denialist propaganda, however. In January, The Independent had a scoop about a pair of funds, the Donors Trust and the Donors Capital Fund, which collect funding anonymously and distribute it to various denialist think-tanks and PR firms. The Independent focused on the involvement of the infamous Koch brothers, the Texan gas industry billionaires who previously bankrolled denialists more openly.

Now The Guardian looked at the two funds, too. In a first exposť, they cautioned that the Koch brothers aren't the only story (via the 15 February Newsroom). Then they showed that the same two funds also supported a US propaganda platform against wind and solar power, and that a UK fund set up by top British denialist Lord Lawson has the same aims and the same anonymous funding structure (via the 16-17 February Newsroom).

The first piece includes this diagram to show the change in the relative weight of the anonymous funding, compared to the more open propaganda spending of two well-known climate science and renewables opponents:

Secret funding helped build vast network of climate denial thinktanks | Environment | guardian.co.uk
Such vehicles, called donor-advised funds, are not uncommon in America. They offer a number of advantages to wealthy donors. They are convenient, cheaper to run than a private foundation, offer tax breaks and are lawful.

I imagine anthopogenic global warming denialism is by far not the only 'cause' wealthy donors fund this way. Thus, questions arise:

  1. What do we know about these "donor-advised funds"?
  2. Since when do they exist in the USA?
  3. When have there been significant changes to laws regulating them?
  4. Do we have something similar in Europe?

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sat Feb 16th, 2013 at 06:33:21 AM EST
What do we know about these "donor-advised funds"?

Not all that much.  You have to start digging to understand the relationship, but there hasn't been a coordinated effort to trace out the networks that we are talking about.

Since when do they exist in the USA?

For a very long time. You have to understand this as part of an ideological war of position, to use Gramscian terms. This has been going on since at least the early 1970s.  See the Powell Memo, and see the ideological network  that has developed since  1971. This ties back even further to the Mont Pelerin Society, which had twin nexuses in Chicago and the Austrian School.

When have there been significant changes to laws regulating them?

Citizens United (2010) upped the stakes by allowing  executives to contribute to this effort directly from corporate funds, even where this related directly to politics.

Do we have something similar in Europe?

Yes, very much so.  The European wing of the Mont Pelerins has been less successful in their struggle for ideological hegemony, but they do exist.  If you want to tug at strings, start with the Institute for Economic Affairs.  And don't forget Atlantic Bridge.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sat Feb 16th, 2013 at 06:34:31 PM EST
[ Parent ]
My question was more focused on the specific institution of "donor-advised funds", rather than think-tankery in general. On Wikipedia, I find these bits of information:

A donor-advised fund is a charitable giving vehicle administered by a public charity and created for the purpose of managing charitable donations on behalf of an organization, family, or individual. A donor-advised fund offers the opportunity to create an easy-to-establish, low cost, flexible vehicle for charitable giving as an alternative to direct giving or creating a private foundation.

Another source I found is more explicit about the anonymising function:

Sidebar: Donor-Advised Funds Background | Blue Avocado

In contrast to a private foundation, a DAF typically affords the advantages of two kinds of anonymity for a donor. First, the donor's identity need not be disclosed to the nonprofit which receives a donation from the donor's DAF. Second, the administering organization (a community foundation or Fidelity, say) does not have to report on its 990 grants from DAFs on a fund-by-fund basis.

Back to Wikipedia for history:

The New York Community Trust pioneered the development of donor-advised funds in 1931. Although the second such fund was not created until 1935,[1] in the decades since the field has greatly expanded as commercial sponsors, educational institutions, and independent charities started offering the service. Donor-advised funds are the fastest growing charitable giving vehicle in the United States of America, with more than 175,000 donor-advised accounts established, holding over $37 billion in assets.[2]

So faily old. But this source (referenced in this Treasury report) suggests that charities other than community foundations began to use donor-advised funds only from the 1970s and DAFs really became popular in the 1990s, helped by a 1992 how-to treatise. What were the financial benefits? Back to Wikipedia:

Current U.S. tax law allows the donor of appreciated securities or other assets to get a tax deduction for the market value of the donation and avoid capital gains taxes. This double tax advantage can make donating appreciated assets to a charitable organization more attractive than selling the assets and donating cash.


While private foundations in the United States are heavily regulated by the Internal Revenue Service, including rules on oversight and minimum annual payouts, donor advised funds housed in public charities are not subject to the same tax restrictions.

How convenient! Now, when did regulation change the last time?

On August 17, 2006, President Bush signed the Pension Protection Act of 2006 (H.R. 4) into law, which includes a number of changes to the regulatory framework for donor-advised funds, and follows both House and Senate passage of H.R. 4.

It's not clear from the article how the rules changed, though, other than ifirst ntroducing a legal definition of "donor-advised fund". But this Treasury report suggests that the situation actually slightly improved from before, with more monitoring of these shadowy funds.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Sun Feb 17th, 2013 at 06:02:46 AM EST
[ Parent ]
Donors Trust has been making waves for some time, but I think it was Mother Jones that recently put them on Guardians radar.

Exposed: The Dark-Money ATM of the Conservative Movement | Mother Jones

Ball says she travels all over the country courting wealthy conservatives and libertarians, and attends Koch donor retreats and Cato "shareholder" meetings. The crux of her pitch is this: Rich folks can give to Donors Trust and rest easy knowing that their millions will continue bankrolling the conservative movement long into the future, even after their death. They don't have to worry that, after they die, their heirs and trustees will use their bucks for causes they would never support. Ball points to the Ford Foundation as one example of a major charity that, in her view, drifted leftward over time and away from the ideals of man who started it, industrialist Edsel Ford. Donors Trust promises its funders that conservative money stays with conservatives. "Greenpeace won't get a dime from us," Ball told the National Review in 2001.

Donors Trust grew out of the fear among right-leaning donors that their family foundations might end up in the hands of those who would fund centrist or, even worse, left-of-center causes. At the behest of the late Bruce Jacobs, a Seattle-area businessman and "paleocon" who didn't want to underwrite a local community foundation, Ball and a conservative strategist named Kimberly Dennis created Donors Trust.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Sun Feb 17th, 2013 at 04:46:32 AM EST
I think everyone followed The Independent's lead. The latter published its exposé on 24 January, the article in Mother Jones appeared on 5 February.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sun Feb 17th, 2013 at 04:58:49 AM EST
[ Parent ]
On the climate denialism, yes. But bringing Donor's Trust as a political machine in the US into the light has been long coming.

Alternet tracked one item in 2010:
Koch Footprints Lead to Political Powder Keg: Exposing the Far Right's Secret Slush Fund to Keep Fear Alive | Alternet

October 27, 2010  |       Like this article?Join our email list:Stay up to date with the latest headlines via email.        

Asecretive libertarian nonprofit with ties to Charles Koch bankrolled what was widely perceived to be a fear mongering effort to throw the Presidential election to Senator John McCain in 2008. Until now, where the money came from has been a hotly debated mystery.

Seven weeks before the Presidential election of 2008, approximately 100 newspapers and magazines in the U.S., including the New York Times, Wall Street Journal, Miami Herald, Philadelphia Inquirer, and St. Petersburg Times, distributed millions of DVDs of the documentary, "Obsession: Radical Islam's War Against the West."  The DVDs were included in the Sunday editions.  Altogether, including a separate direct mail campaign, 28 million DVDs flooded households in the swing voter states.

The newspapers did not know who was funding this massive propaganda campaign and, apparently, did not care.

Crooks and Liars followed up in 2011:
Donors Trust: An Anonymous Tax-Deductible Policy Slush Fund | Crooks and Liars

What is Donors Trust?

Donors Trust is a tax-deductible slush fund. If a donor or foundation wants to put money toward a project and doesn't want it to be a direct gift reportable to the IRS, all they do is give it to Donors Trust.

Donors Trust has three related project entities, according to their 2009 disclosures:

  • Donors Trust, LLC - Created to receive a gift of real property and liquidate it
  • Talent Market, LLC - Provides administrative support services
  • Center for College Affordability & Productivity, LLC - Research, writing, educational services

There is also Donors Capital Fund, Inc., which is the grantmaking arm and which also receives contributions as a private foundation.

And then there has been a number of more items that I have forgotten. What the Mother Jones article is bring this together and up to date and adds a bit of focus on the climate denialism (which they partly picked up from the Independent, but they have also been covering that angle themselves previously).

But who-said-what-first is not why I quoted Mother Jones. What I found interesting was the sales pitch - protect your money from your kids and relatives liberal leanings. I don't know if that would work over here as I think the conservative upper class much values the monetary succcess of the immediate family and the family name. Less of the self-made man myth perhaps, and perhaps also less loyalty to conservatism and more to upper class.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Sun Feb 17th, 2013 at 09:29:02 AM EST
[ Parent ]

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