Shining the light on dark money: Political spending by nonprofits

Abstract

The past decade has seen an increase in public attention on the role of campaign donations and outside spending. This has led some donors to seek ways of skirting disclosure requirements, such as by contributing through nonprofits that allow for greater privacy. These nonprofits nonetheless clearly aim to influence policy discussions and have a direct impact, in some cases, on electoral outcomes. We develop a technique for identifying nonprofits engaged in political activity that relies not on their formal disclosure, which is often understated or omitted, but on text analysis of their websites. We generate political activity scores for 339,818 organizations and validate our measure through crowdsourcing. Using our measure, we characterize the number and distribution of political nonprofits and estimate how much these groups spend for political purposes.