Assets of Koch-Controlled Organizations Soar to Over $8.1 Billion

The Koch fleet’s combined net revenue skyrocketed in 2022, up to $4.8 billion. This is largely due to a $4.3 billion injection into a 501(c)(4) called Believe in People, Inc, which almost doubled the network’s assets in a single year. Contrary to the Forbes report that revealed this gigantic transfer of corporate stock funds, this organization is not actually new, but simply a rebranded group formerly known as TSN Institute, which began operating in 2014 and has changed names several times. 

This explosive growth in revenue is significantly higher than the previous record set by Koch groups’ combined net revenue in 2020, which was $2.4 billion. This was largely due to an injection of corporate stock into another Koch-controlled 501(c)(4) called CCKC4 that was worth $1.2 billion.

These sums vastly exceed the much-reported $1.6 billion transfer from the sale of a company owned by Barre Seid to Leonard Leo’s Marble Freedom Trust in 2020, a one-time payment in the form of corporate stock. While Leo’s activities appear to be the soup du jour for political reporters, the explosive growth of Charles Koch’s fleet has generally been under-examined since the death of his brother David Koch in late 2019.

In the five-year period of most recently-available IRS tax filings, Koch groups that are primarily focused on influencing American policy and politics accounted for more than 93% of the spending. Only 6% came from Koch foundations that predominantly support charitable causes that do not explicitly align with Charles Koch’s own economic interests or ideological policy goals.

The fleet of nonprofit organizations, advocacy groups and political action committees controlled by Charles Koch and Koch Industries executives has grown by a tremendous amount in the five-year period from 2018-2022. His fluctuating constellation of 32 groups has seen their assets increase more than five-fold to over $8.1 billion. 

The combined net spending of Koch-controlled organizations has also ballooned by 71% in five years, from $460.8 million in 2018 to $787.6 million in 2022.

The updated spreadsheet with the data containing asset, revenue and expenditure calculations from 2018-2022 is available for public review, and the methodology is detailed below. Due to the formation and rebranding of multiple Koch-controlled groups, we have also updated our previous table detailing the evolution of the names of these organizations over time:

Charles Koch’s ever-expanding influence groups cover a lot of ground. Implementation of Koch’s policy agenda stems outward from the family foundations, organizations and advocacy groups that are closely-controlled by Koch executives to the many hundreds of groups and university centers receiving Koch’s support. CMD writes frequently about the work orchestrated by the Koch fleet, including recent and ongoing efforts to make dark money in politics even darker, to protect big tech companies from antitrust action, to block justice against corporations that negligently hurt or kill people, and to keep low income people from accessing healthcare. 

As a longtime and particularly influential supporter of the American Legislative Exchange Council (ALEC), Koch funding has enabled the spread of harmful cookie-cutter state law. Some of ALEC’s most infamous policies include voter suppression legislation and Stand Your Ground laws that have increased gun homicides, to a litany of laws that allow companies to pollute with practical impunity. 

The threat of a national abortion ban could also become real in the next year, thanks to a Supreme Court whose conservative majority was enabled with significant financial support of Charles Koch’s organizations. This majority was the result of three justices appointed by Donald Trump, a president who delivered some of the most significant political victories in Koch’s lifetime, regardless of their oft-reported public feuding.

Methodology

Since we last published, we have made a few improvements to our methodology. These improvements mean that the figures published in previous posts (here and here) are outdated.

Most notably, we added data for 2018, and for 2022, in order to examine a five-year period of time.

This data now incorporates financials for the Koch Industries political action committee, Koch PAC, in our annual combined financial calculations. Unlike Koch Industries itself, Koch PAC’s financial data is available to the public, allowing us to incorporate it with the other organizations for which incoming and outgoing funds are disclosed.

Two 501(c)(4) organizations that began operations in 2022 are incorporated into our dataset: the Stand Together C4 Fund, and Music C4. The new group Music C4 initially filed to incorporate as an IRS-regulated nonprofit under the name “Believe In People,” as its 2021 990-N “e-Postcard” confirms. It then briefly operated as the “Human Benefit Institute,” as its IRS determination letter shows, before settling upon Music C4, as indicated in its 2022 990 filing.

Music C4 is not the same as another distinct organization known as “Believe in People, Inc,” which is the organization formerly known as the “TSN Institute.” TSN Institute changed its name between 2020 and 2021, as the employer identification number in its IRS 990s confirm. Understandably, these duplicate names confused reporters at Forbes: it is the Believe in People formerly known as TSN Institute that received $4.3 billion worth of Koch Industries stock in 2022, not the organization founded in 2022, now known as Music C4. 

After examining the IRS 990 filings of several nonprofits affiliated with Charles Koch’s daughter, Elizabeth R. Koch, we have made the determination to keep this data separate from the organizations that are controlled by Charles Koch, his son Chase Koch, and other executives of Koch Industries and its most closely affiliated foundations and nonprofits. With the exception of a $75,000 grant to the Property and Environmental Research Center (PERC) in 2020 (mislabeled the “Political Economy Research Center,” but confirmed by the address), none of the spending of the Elizabeth R. Koch Foundation appears to be related to the policy activity of Charles Koch’s fleet of nonprofits and political action committees. This same logic applies to the other foundations affiliated with Elizabeth R. Koch: Tiny Blue Dot, Unlikely Collaborators, the Unlikely Collaborators Foundation, and her latest organization, Unlikely Giving.

Unlikely Giving was formerly included in our calculations, when it was known as Zero Zero One, Inc, as it was being used by Koch Industries executives to route money to other Koch-controlled organizations as well as the National Philanthropic Trust. The organization has since been repurposed to finance Elizabeth R. Koch’s charitable activities. Unless we get more information indicating that Elizabeth R. Koch uses Unlikely Giving as a hub for political activism that reflects the interests of Koch Industries and Charles Koch, we will continue to exclude it from any future Koch “fleet” calculations.

There are other slight changes to our methodology which we note in bold below.

Revenue, Expenditure, and Asset Totals

Building on CMD’s previous reports on Koch nonprofit and super PAC spending, the same methods were used to calculate total combined revenue, expenditures, and assets. Researchers tracked grant payments and other expenditures between organizations in order to assess net as opposed to gross totals and to avoid inflating these figures through double counting. 

We improved upon our calculation to obtain combined gross assets, combined net revenue and combined net expense totals between all of the organizations. Previously, we slightly undercounted these totals by not rectifying money exchanged between specific groups within a given year. These kinds of exchanges were much more frequent in 2022, and our previous method would have undercounted combined net revenue and combined net expense totals by about $40 million. (For example: the Stand Together Chamber of Commerce gave AFP Action $26.5 million in 2022. AFP Action gave Stand Together Chamber $1.45 million in the same year. This results in a net exchange of $25.05 million between the groups, which we deduct from combined gross revenue and combined gross expenses to more accurately calculate combined net totals.)

As noted above, we will no longer include the 501(c)(4) nonprofit formerly known as Zero Zero One, now known as Unlikely Giving, unless evidence emerges indicating that it is coordinating with Charles Koch’s policy-influencing fleet of organizations. which Bloomberg first surfaced.

The full spreadsheet tracking the components used to make these calculations is available to the public, with every line item linking directly to the primary source reference.

This author corrected a data entry error for the AFP Action super PAC in 2021. The data incorrectly used an annual spending figure from 2020 ($57,554,638) rather than from 2021 ($3,220,897). References to calculations that incorporated this erroneous figure have been corrected, and I regret the error.

Political vs. Charitable Spending

In this context, ”charitable” is defined as organizations CMD assessed as being selfless and altruistic rather than overtly supportive of Charles Koch’s own political or financial goals. Technically, this interpretation matches IRS definitions of “charitable purposes.” However, given the glut of politically motivated nonprofits that advance the financial ambitions of donors, enrich their affiliates, and even engage in outright fraud, the IRS clearly does not enforce its own definition of “charitable.”

The organizations that primarily work to influence policy or political outcomes are categorized and color-coded in red as opposed to organizations that engage primarily in charitable purposes (green), as defined above.

Admittedly, these calculations are imperfect. CMD did not examine each of the thousands of Koch-affiliated grants and hundreds of grantees, and of those reviewed, the evaluation of which payments qualify as politically neutral charitable spending as opposed to self-interested, ideological or electoral expenditures is inherently subjective. These calculations are based on gross totals, which, due to the complexity posed by each group’s varying approach to categorizing revenue and expenses, do not account for money exchanged between organizations.

The leaders of Koch Industries and its affiliated nonprofits will likely take issue with some of CMD’s categorization. Entire books have been written that examine how carefully designed Koch’s policy influence strategy is, how tax-exempt philanthropy obscures much of its true intent, how this philanthropy overlaps heavily with the ideological bent of the company and its owners, and how a complementary public relations effort attempts to direct attention away from Koch’s longstanding political motivations.

Certain Koch nonprofits that direct financial support to both policy influence organizations and more charitable causes are categorized based on their predominant behavior, as in the following examples:

• Large 501(c)(4) funds such as CCKC4, and previously Zero Zero One (from 2018-2021), spend in what appears to be intentionally opaque ways, funneling vast sums of dark money through donor advised funds like the National Philanthropic Trust. This is a clear indication that the expenditures are not charitable. Zero Zero One, now known as Unlikely Giving, has been removed from asset, revenue and expenditure calculations in 2022, for reasons explained above.
  
• In 2022, the new 501(c)(4) groups known as Stand Together C4 Fund and Music C4 are also classified as political and policy influencing groups.
  
• While Stand Together Chamber of Commerce donates some funds to charities, this is far eclipsed by what it spends on political and policy-influencing efforts such as its $102-million grant to Americans for Prosperity (AFP) in 2021. Groups that are structured as controlled entities of the ST Chamber (such as Capitol Leaders and Believe in People) are also categorized as policy influence groups.
  
• Although the Charles Koch Foundation was formerly the primary vessel for grants to policy organizations, in recent years its spending has shifted to Stand Together Fellowships and Stand Together Trust, both of which have always focused on influencing policy and developing related talent. The Foundation’s remaining focus on universities is part of a longstanding strategy by Koch to influence policy in direct ways, as his own executives have plainly stated. For these reasons, CMD does not consider the Charles Koch Foundation to be a predominantly charitable organization.
  
• While yes. every kid. (YEK) purports to be a charitable nonprofit, its executives have political as opposed to educational backgrounds. When the group was founded in 2019, longtime advocates of public education were quick to challenge its ostensible focus, pointing to Koch’s history of supporting efforts to privatize education. Given the politicians it has since championed and the legal cases it has supported, these initial concerns have been validated, leading CMD to not consider YEK a genuinely charitable venture.
  
• Closely tied to right-wing efforts to privatize education, the VELA Education Fund supports affiliates of bigoted activist groups like the Alliance Defending Freedom and the Christian Law Association, along with the Home School Road Map and the Home School Legal Defense Association, and deceptive school privatization groups like the National Parent’s Union. CMD does not consider VELA a true charitable organization.
  
• The newly rebranded group Empowered (formerly known as Youth Entrepreneurs) certainly presents itself as a charity focused on supporting high school students’ development. However, its history presents abundant evidence that the organization’s true purpose is to inject Charles Koch’s ideological preferences into high school curricula. Given that, CMD does not categorize Empowered as a charity.
  
• We have changed our classification of the Charles Koch Charitable Fund to primary policy-focused. It has financed Charles Koch’s Institute for Humane Studies, and in 2022 the vast majority of its grant payments went to the anonymous donor advised fund, the National Philanthropic Trust.
  
• Koch PAC is a political action committee that finances politicians, making it an inherently political organization.
  
• The Koch Family Foundation (previously the Fred C. and Mary R. Koch Foundation) has financed controversial ideological groups like the Bill of Rights Institute and has made problematic contributions to Kansas-based universities. However, since it spends more money on scholarships and efforts that are not in the immediate interest of the Koch family or company, CMD cautiously categorizes this foundation as charitable.
  
• Despite being rooted in Charles Koch’s public relations rebranding, the Stand Together Foundation spends most of its revenue on charitable causes, so it is categorized accordingly by CMD.
  
• The Chase Koch Foundation remains classified as a charity-focused organization. Its 2022 IRS 990 filing makes this more apparent than previous years.