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Welcome to 2014 — the 501(c)(4) election!

If the story of the 2012 election was the rise of the super PAC, then the story of the 2014 midterms will be the rise of the politically-minded, non-profit organization -- known in tax code parlance as a 501(c)(4).

As WaPo's Matea Gold reported recently, Americans for Prosperity, a 501(c)(4) funded by David and Charles Koch has already dumped more than $27 million since August into ads blasting Democrats.  The allure of these sort of non-profit arms is simple: Unlike a Super PAC, neither the donors' names nor the amount they have given must be disclosed -- a cloak of anonymity that many wealthy individuals in both parties find alluring.  The one drawback is that, according to tax law, these organizations must spend a majority of their money on "social welfare" activities -- although just what falls into that category is at the center of an attempted rule change governing these groups by the Obama administration. (Super PACs have no such constraints.)

The lack of specific guidelines as to what these 501(c)(4) groups can do combined with the appeal of anonymity for donors make these social welfare groups a booming industry in the world of money in politics. Check out this awesome chart from the Center for Responsive Politics detailing how quickly 501(c)(4)'s have grown as compared to other not-for-profit entities with quasi-political missions.

Image courtesy of the Center for Responsive Politics

And then there is the chart below -- also from CRP -- that shows that conservative-aligned non-profits' spending has grown five-fold between 2006 and 2012.

Image courtesy of the Center for Responsive Politics.

In the 2012 election alone, Crossroads GPS, the non-profit arm of American Crossroads, spent $70 million while the American Future Fund, which backed Mitt Romney, dropped almost $24 million. The biggest spending 501(c)(4) aligned with Democrats was the League of Conservation voters, which spent almost $10 million. (Click here for a more complete list via the Sunlight Foundation.)  And these figures represent just a total amount spent by nonprofits, since they do not have to report all their expenditures.

Democrats looking toward the 2014 midterms are already fretting about the spending by AFP and other conservative-aligned social welfare groups. Liberal 501(c)(4)s are working with Democratic super PACs to try to combat AFP.  Add it all up and you get massive amounts of spending from groups that are required to disclose almost nothing about where their money comes from or where it goes to.

Welcome to 2014: The 501(c)(4) election.

Chris Cillizza writes “The Fix,” a politics blog for the Washington Post. He also covers the White House.



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