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Money has a significant influence on politics and public policy. The public has a legitimate right to be concerned about money that flows to legislators and elected officials. Campaigns are expensive. Costs for legislative and regents races can easily exceed six figures. Donations from individuals, political action committees, and businesses to the campaigns of candidates and elected officials are filed with the Nebraska Accountability and Disclosure Commission and are publicly available. Regular media coverage of these reports make sure voters are aware of how campaigns are funded.
Voters are likely unaware of a much more substantial and influential source of money whose donors the media do not cover: the nonprofit group. In Nebraska the influence of nonprofit foundations and the groups they fund is particularly pervasive. Millions of dollars are spent annually by a handful of private foundations to influence legislation, run campaigns for political issues, and even employ elected officials. Look closely at any major policy issue in Nebraska and you will find a handful of interconnected nonprofit groups engaged in it.
If government is to be transparent and accountable to citizens, voters need to have a clear view of the money spent by 501(c)3 groups to influence policy. Nonprofit groups that identify themselves as “think tanks” or “advocacy groups” are actively engaged in the legislative process. In addition to public testimony at legislative hearings, paid staff of these agencies lobby senators, write legislation, and orchestrate extensive media and public affairs campaigns. Untangling the web of money that funds these endeavors is no easy task.
A nonprofit foundation is often used as a tool to shelter wealth from taxation and public scrutiny, while directing a substantial fortune for specific purposes, often political. Nonprofit groups, unlike political campaigns, are not required to publicly disclose their donors. As private organizations, their boards are not subject to transparency requirements. IRS Form 990 provides some detail about how a foundation may spend its money, but public access information is several years old.
In Nebraska, no single foundation has greater influence on public policy than the Sherwood Foundation, the private foundation funded by the wealth of mega-billionaire Warren Buffett’s daughter, Susie Buffett. The Sherwood Foundation supplies millions of dollars annually to a number of political nonprofit groups. OpenSky Policy Institute, a “think tank”, received over half its operating expenses in 2015 from the Sherwood Foundation. Groups that receive substantial funding from the Sherwood Foundation also employ state senators. Nebraska Appleseed, a politically advocacy group, employed Senator Kate Bolz and received over $700,000, while Nebraskans for Civic Reform, the group run by Senator Adam Morfeld, received $164,000 from Ms. Buffett’s foundation. One World Community Health Center, whose foundation employs Senator Sara Howard, received over $900,000. Center for Rural Affairs, Voices for Children, and other advocacy groups receive six figure support for their operations.
It is not uncommon for foundations to donate to other nonprofits, which may in turn fund additional nonprofits, effectively laundering donor money and removing it several steps from public view. Have you ever wondered who funds Nebraska Loves Public Schools? Founded in 2011 by the Sherwood Foundation, several Sherwood-funded groups also provide financial and logistical support to the organization. Thus, voters may have to look back through several layers of financing to identify the true source of funds.
It is in the public interest to be able to evaluate how a $1,000 campaign contribution may influence an elected official. It is of even greater importance for the public to evaluate how six-figure donations to an elected official’s employer and policy groups impact votes and policy choices. When Dorothy pulled back the curtain in the classic movie The Wizard of Oz, the Great Oz exclaimed “pay no attention to that man behind the curtain”. Nebraska voters and the media would be well served by pulling back the veil that shrouds millions of private dollars flowing into the Nebraska political process to identify who might be pulling the levers.