What is dark money in politics?

The term 'dark money' entered political journalism after Citizens United v. FEC, 558 U.S. 310 (January 21, 2010), to describe political spending from organizations not required to disclose their donors in FEC reports. The primary vehicles are 501(c)(4) social welfare organizations under 26 U.S.C. Section 501(c)(4) and, to a lesser extent, 501(c)(6) trade associations and 501(c)(5) labor unions. These organizations are exempt from federal income tax provided their primary purpose is social welfare, trade promotion, or labor advocacy, not political activity. Federal law does not define 'primary purpose' by a precise percentage, but the IRS applies a facts-and-circumstances test; in practice, 501(c)(4) organizations may devote substantial resources to political activities so long as those activities are not deemed to be the organization's principal purpose. Because 501(c)(4)s are not 'political organizations' under 26 U.S.C. Section 527, they are not required to file the ongoing public reports with the FEC that disclose all receipts and expenditures; instead they face narrower, expenditure-specific disclosure requirements under campaign finance law that apply only to earmarked contributions for particular communications.

The disclosure gap at the center of dark money law arises from the interaction between two bodies of statute. Under 52 U.S.C. Section 30104(f), any person -- including a 501(c)(4) -- that makes disbursements for electioneering communications (broadcast, cable, or satellite ads within 30 days of a primary or 60 days of a general election naming a federal candidate and reaching 50,000 or more relevant voters) totaling $10,000 or more in a calendar year must file an FEC report. That report must identify the speaker, the ad, the candidate named, and any individual who contributed $1,000 or more specifically for the purpose of funding that communication. Under 52 U.S.C. Section 30104(g), independent expenditures above $250 must similarly be reported, including any contributor of $200 or more who earmarked funds for that specific expenditure. The critical limitation is the earmark requirement: a donor who gives $5 million to a 501(c)(4) with no instruction as to how the funds are spent is not required to be disclosed in any FEC filing, even if the 501(c)(4) subsequently uses that money to fund millions of dollars in election-year advertising. Only contributions specifically earmarked for an identified communication or expenditure cross the disclosure threshold. Citizens United, decided January 21, 2010, expanded the scope of this framework by holding 5-4 that the First Amendment bars government from prohibiting corporations, unions, and nonprofits from making unlimited independent political expenditures; the majority did not disturb the disclosure requirements, which were upheld 8-1 (only Justice Thomas dissented on disclosure).

The practical mechanism of dark money flows in two related paths. In the first -- direct dark money -- a 501(c)(4) uses its general treasury funds to pay directly for independent expenditures (TV ads using express advocacy such as 'vote against') or electioneering communications (broadcast ads naming a candidate within the BCRA time windows). The FEC filing for these expenditures names the 501(c)(4) as the spender but does not name the individuals who funded the organization. In the second -- routed dark money -- a 501(c)(4) contributes funds to a super PAC (a contribution to a super PAC from any donor, including a nonprofit, is legally permitted because super PACs may accept unlimited contributions for independent spending). The super PAC's FEC filings list the 501(c)(4) as a donor by name, satisfying the super PAC's own disclosure obligation; but the 501(c)(4)'s underlying individual donors remain non-public under federal law. This two-step mechanism means a politically active nonprofit can serve as a conduit between private donors and publicly visible election spending without the donors' identities appearing in searchable FEC databases at fec.gov. Super PACs themselves are not dark money vehicles -- they are required to disclose all donors above thresholds in periodic FEC reports -- but they can receive dark money from 501(c)(4) sources.

Two legal developments have shaped the durability of dark money. In Americans for Prosperity Foundation v. Bonta, 594 U.S. 595 (2021), the Supreme Court addressed California's requirement that nonprofits operating in California disclose to the state attorney general the names and addresses of donors contributing $5,000 or more in a calendar year -- information the state AG was required to keep confidential but which had been inadvertently made public in prior incidents. Americans for Prosperity Foundation (AFP, a 501(c)(4)) and Thomas More Law Center challenged the requirement as a violation of the First Amendment right of association established in NAACP v. Alabama, 357 U.S. 449 (1958). Chief Justice Roberts, writing for a majority of six justices, held that California's disclosure regime failed 'exacting scrutiny' -- the standard requiring a substantial relation between the disclosure requirement and a sufficiently important government interest -- because the state had not demonstrated that blanket upfront collection of donor information was narrowly tailored to its asserted interest in investigating charitable fraud. The decision constrained state-level disclosure mandates for nonprofit donors. At the federal level, Congress has considered the DISCLOSE Act (Democracy Is Strengthened by Casting Light On Spending in Elections Act) multiple times since 2010 -- it passed the House in 2010 but failed Senate cloture; it was reintroduced in multiple subsequent Congresses including 2021 and 2022 but has never been enacted. The DISCLOSE Act would have required 501(c)(4) organizations spending above a threshold on elections to disclose donors above a specified dollar amount. Absent its passage, federal dark money disclosure law remains as established by Citizens United and 52 U.S.C. Section 30104. For the 2028 presidential election, 501(c)(4) organizations and 501(c)(6) trade associations may fund unlimited independent expenditures and electioneering communications, with disclosure limited to earmarked contributions for identified communications; the general-donor privacy framework established by statute and upheld in the courts remains the operative law.