Introduction

New Internal Revenue Service tax returns shed light on hefty spending by key nonprofit groups on political campaigns and lobbying — and the disclosures also show that some of the money raised by these groups, which aren’t required to reveal their donors, are sharing money with other groups that don’t reveal their donors. This makes it even more difficult to determine their ultimate funding sources.

For tax-exempt nonprofit groups, politics cannot by law serve as their primary mission. Nevertheless, some of these organizations — 501(c)(4) social welfare nonprofits and 501(c)(6) trade associations — have played an outsized role in federal elections since the Supreme Court’s Citizens United v. Federal Election Commission decision in 2010 to allow unlimited corporate, union and nonprofit group spending to oppose or support candidates.

The Center for Public Integrity analyzed IRS tax returns covering 2012 for some of the most politically active nonprofits. Ten of the organizations, and highlights from their returns — including information about salaries, travel and fundraising costs — are as follows:

The Advocacy Fund, a left leaning group connected to the Tides Foundation, gave $7.7 million in grants to more than 50 groups. Some of that money went to groups that aren’t required to disclose their donors. This includes $2 million to the League of Conservation Voters, $1 million to the Campaign for Community Change, $278,000 to the Sierra Club, $80,000 to the NRDC Action Fund and $27,500 to the Ohio Organizing Campaign. The Advocacy Fund also gave $106,500 to Give Missourians a Raise, a union-backed group that successfully fought to raise the state’s minimum wage. The Fund’s grants made up more than three-fourths of its expenses.

The American Petroleum Institute, received $165.4 million in dues in 2012. That includes $98.4 million for political or lobbying expenses — the highest amounts in five years, based on the organization’s previous IRS filings. The trade association’s tax return, known as a Form 990, lists 13 employees with six-figure salaries and a $3.6 million compensation for its president, Jack Gerard. The group reported other expenses, including $73.5 million for advertising and promotion and $3.5 million for travel. It gave $7.1 million in grants, including some that went to politically active “dark money” nonprofits: $250,000 to American Action Network, $25,000 to the 60 Plus Association and $15,000 to Americans for Prosperity. The Institute, the largest trade association of the oil and natural gas industry, has more than 500 members including BP America, Chevron and ExxonMobil.

Americans for Prosperity, backed by oil moguls David and Charles Koch, provided about $486,000 in grants to groups such as the Center to Protect Patient Rights, which received $100,000, and the National Federation of Independent Business, which received $20,000. Americans for Prosperity awarded smaller grants to the American Energy Alliance, which spent hefty sums opposing President Barack Obama, and two groups that have opposed measures to raise New Mexico’s minimum wage. In all, the group reported spending $33.5 million on political campaign activities, $83 million in advertising and promotion and $3 million on travel in 2012. Of its advertising output, Americans for Prosperity paid $55.8 million to a right-leaning, Maryland-based contractor, Mentzer Media Services Inc.

Club for Growth’s ratio of fundraising costs to contributions — a key measure of a nonprofit’s success — increased about threefold in three years. It spent 39 cents to raise $1 last year, which is considered relatively inefficient, according to Charity Navigator, which monitors charitable groups. It spent $1.4 million on fundraising during the fiscal year ending in June, according to information filed recently to the Colorado Secretary of State. The group agreed to pay a contractor, Alexandria-based Response America LLC, $60 per thousand letters mailed — or at least $2,500, according to documents received in January by the North Carolina Secretary of State. It also agreed to pay another contractor — Alexandria-based BMD Inc., also known as GMA — $4,000, or 6 cents per piece, in addition to reimbursing for other costs such as postage and travel. During the fiscal year ending June 2012, the group spent more than $1 million on two contractors in Bethesda, Md., for media and research purposes; $1.4 million on legislative involvement and policy advocacy; $941,000 on issue advocacy; and $244,000 on “independent express advocacy.”

Ending Spending Inc.’s revenue went up 89 percent last year, to $4.4 million from $2.3 million in 2011. The group is affiliated with Ending Spending Action Fund, a super PAC that spent more than $13 million on the 2012 federal elections, according to the Center for Responsive Politics, a nonpartisan group that tracks campaign spending. The super PAC spent more than $400,000 on advertisements opposing Democrat Terry McAuliffe before he was elected governor of Virginia this month, and supporting McAuliffe’s rival, Republican Ken Cuccinelli, according to Brian Baker, the president and general counsel of both Ending Spending entities. The nonprofit effectively subsidizes the super PAC through shared resources such as office space and employees. Therefore, those resources must be reported as “in-kind” contributions from the nonprofit to the PAC, Baker said. He added that the higher revenues and expenses are largely because of Ending Spending publishing a book, the Fiscal Cliff, written by a husband-and-wife team Ayse and Selo Imrohoroglu of the University of Southern California. Baker said his group paid to have the book written through a contractor, Pacific Finance and Economics, which received $291,668 from Ending Spending Inc. in 2012. The professors wrote in an email that they were commissioned by Pacific Finance but “our contract had no effect on our economic analysis.” Baker agreed, saying the book wasn’t intended to be partisan and didn’t end up that way.

Pharmaceutical Research and Manufacturers of America, a drug industry trade association, doled out $18.1 million in grants, including some to politically active “dark money” groups. It awarded $1.5 million to American Action Network; $75,000 to Heritage Action for America; $25,000 to American Commitment; and roughly $250,000 each to the American Legislative Exchange Council, Americans for Tax Reform and Freedom Path Inc. Another $50,000 went to American Justice Partnership, the third largest donor to the Republican State Leadership Committee. Last year, PhRMA spent $2.1 million, less than it has in previous years, on donations to 501(c)(4) groups that don’t have to disclose donors, according to the Center for Responsive Politics. And for the first time, contributions to politically active nonprofits went only to Republican-oriented groups, according to the Center. However, PhRMA gave to both Democratic and Republican political organizations called 527 groups. It collected nearly $198 million in dues, including $68.3 million in political and lobbying campaign activities. PhRMA has dozens of members, including Johnson & Johnson and Merck & Co. Inc. Matthew Bennett, a senior vice president at PhRMA, said the group donates to a variety of 501(c)3 charities, as well as social welfare and trade groups, and the money often goes to “organizations that share our goals of improving the quality of patients’ lives, increasing the availability of life-saving and life-enhancing medical treatments and supporting the discovery of new treatments and cures by biopharmaceutical research companies.”

The Republican Jewish Coalition is a social welfare nonprofit that aims to “educate and advocate support for Israel and other issues of importance to the Jewish community.” How did it accomplish its mission last year? Apparently, in part, by making lots of ads: The Coalition spent $6.6 million on “advertising and promotion.” Of that amount, FEC records indicate $4.6 million went toward ads urging voters to oust Obama, which was nearly 46 percent of its overall spending last year. In 2012, the Republican Jewish Coalition raised a record $10 million thanks in large part to one individual who donated $5.1 million. The group’s annual tax report does not identify that donor, although journalist Peter Stone has reported that casino magnate Sheldon Adelson, a board member of the Republican Jewish Coalition, contributed the bulk of the group’s money in 2012. A spokesman for Adelson did not respond to requests for comment.

The U.S. Chamber of Commerce spent $53.9 million on political campaign activities — more than it spent in at least five years. The group also reported spending $57 million on advertising and promotion, $9.1 million on travel and $5.4 million in compensation for its president, Thomas Donohue. Five other executives received at least $1 million each. The Chamber, which represents business and industry interests and doesn’t disclose its members, received $167 million in dues from them, including $103.3 million that went toward political and lobbying expenses combined. The IRS doesn’t require nonprofits to publicly disclose its members, although it does list members of its board of directors, which includes representatives of companies such as Verizon Communications Inc., Phillips 66 Company, Xerox Corp., Alcoa Inc., IBM, United Parcel Service, Southern Co., Allstate Insurance Co. and the Las Vegas Sands Corp., which is run by Republican mega-donor Sheldon Adelson.

The U.S. Chamber Institute for Legal Reform — it also doesn’t disclose its members — received $39.8 million in dues, mostly from 21 groups that paid more than $1 million each. Of this money collected, $32.2 million was for lobbying or political expenses. It also reported spending $7.1 million on political campaign activities, $1.6 million on advertising and promotion, $2.6 million in salary and compensation costs. The Institute donated $5.9 million to political 527 organizations including $3.7 million to the Republican State Leadership Committee and $1 million each to the Republican Governors Association and the Florida Jobs PAC.

YG Network, the nonprofit arm of the “Young Guns” empire, raised $12.75 million in its first full year of existence, mostly from just five donors who each gave between $1 million and $2.5 million, according to its 2012 tax return, which was first obtained by the Center for Responsive Politics. Launched in October 2011, the group spent nearly $3 million on political advertisements expressly calling for the election of Republican candidates or the defeat of Democratic ones, according to filings with the FEC. YG Network also spent about $625,000 last year on its “YG Woman Up” initiative that seeks to “communicate center-right policies to women and recruit women advocates for the same.” Its president, John Murray, a former aide to House Majority Leader Eric Cantor, R-Va., earned about the same amount in compensation: $630,000.

Michael Beckel contributed to this report.