Gates Foundation severs ties with a firm that manages 'dark money' funds linked to Democrats

The Gates Foundation has quietly dropped its backing of a nonprofit network linked to the Democratic Party and the progressive agenda, dealing a significant blow to a powerful player in the country's politics.

According to an internal statement, picked up exclusively by The New York Times (NYT), in late June, the Gates Foundation stopped giving grants to nonprofits run by Arabella Advisors.

Arabella Advisors is one of the most prominent philanthropic consultancies in the country and is seen as a powerhouse on the left. The firm, based in Washington, D.C., advises mega donors and progressive organizations on which causes to back financially.

In addition to their consulting work on behalf of nonprofits and philanthropists, the NYT claims that Arabella also manages several "dark money" funds that support Democrats and the progressive movement.

The decision to cut ties with Arabella has been attributed to the foundation's executive director, Mark Suzman, which has caused unease within the world of progressive philanthropy.

According to the NYT, some nonprofits working with Arabella are already looking to distancing themselves from the company to preserve their relationships with the Gates Foundation.

Millions of dollars invested in progressive causes

According to Gates Foundation records, collected by the NYT, the foundation has invested some $450 million in nonprofit funds managed by Arabella over the past sixteen years, making it one of the first and largest sponsors of Arabella-managed funds.

Much of Arabella's work is done through a fund it manages called the New Venture Fund, which according to the NYT, acts as a fiscal sponsor for 170 nonprofit projects.

The Gates Foundation has supported the New Venture Fund since January 2008, according to foundation records seen by the NYT, and was one of its major initial sponsors.

Gates Foundation seeks to cut out the middlemen

In its internal statement, seen by the NYT, and sent to some Gates employees who oversee grantmaking programs, foundation officials cited a desire to relate more directly with grantees and reduce the use of intermediaries such as Arabella.

"Teams are increasingly working directly with programmatic partners, organizations that are deeply rooted in the communities we serve and closely aligned with our mission," the release reads. "Going forward, this is an opportunity to build deeper and more enduring relationships with those partners - and to reinforce the kind of legacy we want to leave."

Also, the foundation said in a statement that its decision to cut ties with Arabella was, "A business decision that reflects our periodic strategic assessments of partnerships and operating models."

Foreign money flows into politics

Coincidentally, the Gates Foundation's decision comes after the Arabella network has come under increased scrutiny, following the reports by Americans for Public Trust which unmasks how they are the key vehicle for foreign money flowing into U.S. politics, particularly from Swiss billionaire Hansjorg Wyss.