For years, the Capital Research Center (CRC), a fringe right-wing group with a history of ideological bias, has promoted misinformation about leading organizations in the philanthropic sector. Its goal is to damage organizations like Arabella Advisors, whose values—including strengthening our communities, working toward a more equitable future, protecting our planet, and defending democracy—stand in direct contrast to CRC’s beliefs and desires.
Recently, CRC released a book through Encounter Books, a publisher closely tied to ultra-conservative entities, which recycles many of their past attacks against Arabella Advisors, our clients, and our work. The author of this compilation of attacks is CRC’s President, Scott Walter, who is no stranger to extremism. From making racially charged comments to amplifying dangerous falsehoods about the 2020 election, Walter’s history and CRC’s agenda are clear: to smear organizations that don’t align with his far-right ideology. Encounter Books, funded by the controversial Bradley Foundation, serves as a platform for such attacks, peddling narratives that only serve to divide and misinform; its president and editor has peddled the conspiracy theory that the FBI was behind the January 6th insurrection.
From basic mistakes about the operating structure of Arabella Advisors and the services it provides its nonprofit clients to outlandish claims about the company’s founder, CRC’s new book is riddled with factual errors, gross mischaracterizations, and nonsensical conspiracy theories.
At a time where the truth is increasingly under siege, it is imperative to challenge and correct such misinformation, especially when it targets organizations committed to creating positive change. So, what major false claims are CRC and Scott Walter making—and what are the facts about Arabella Advisors?
Throughout the book, CRC suggests that Arabella Advisors is skirting IRS regulations and the law; but the fact is that Arabella Advisors carefully follows the law and helps its clients do the same. Arabella Advisors takes pride in the critical role it plays helping clients ensure that their activities comply with legal and regulatory requirements. Over the past few years, right-wing advocates have filed a variety of frivolous complaints about Arabella Advisors with regulatory agencies. These have been ignored, dismissed, or simply closed. Recently, the DC Attorney General closed an inquiry into Arabella after finding no evidence of a violation of law.
CRC also suggests that Arabella Advisors exploits fiscal sponsorship to hide its donors. But as the book itself notes, fiscal sponsorship is a lawful, powerful tool for effective philanthropy, and Arabella works with its fiscal sponsor clients to make the model even more efficient and effective. Since the 1950s, a wide range of nonprofit organizations, community organizations, and faith-based groups have used fiscal sponsorship to launch new projects and enable social impact. They know that fiscal sponsorship is often the most efficient and effective way to get more resources to the people and groups that need them most. Arabella Advisors is not itself a fiscal sponsor; rather, Arabella is a business that provides operational support–accounting, HR, and compliance services–to nonprofit organizations that operate as fiscal sponsors.
CRC goes on to claim that Eric Kessler is “the chief string-puller” at Arabella, which “belongs to Mr. Kessler,” even as its clients are “Kessler’s non-profit empire.” Again, the facts are quite different: Arabella Advisors is certified B Corporation that provides services to a wide range of clients working to advance philanthropic goals. Eric Kessler founded Arabella Advisors in 2005, but day-to-day management of the firm was transferred in 2015, when Arabella hired its first CEO. For the last five years, Eric Kessler has not had an executive management function at Arabella. He is one of seven Arabella board members, and he is one of eight Sixteen Thirty Fund board members. He is not the chair of either board; nor does he sit on the board of any other Arabella client. Arabella was sold in 2020, with Mr. Kessler’s family holding nothing more than a minority interest in the company. Meanwhile, Arabella Advisors has been named a “Great Place to Work,” a “Best for the World Company,” and a “Best Entrepreneurial Company” (twice).
Finally, CRC claims that Arabella Advisors is a “Dark Money Group;” but the fact is that Arabella Advisors is a for-profit consulting business that supports philanthropy. The phrase “dark money” refers to a class of nonprofits that engage in certain types of programmatic activities and how these nonprofits are (and are not) required to disclose their donors. Arabella Advisors is a business that works for a variety of nonprofits, foundations, corporations, families, and individuals. To suggest that Arabella is a “dark money group” is factually inaccurate and demonstrates a fundamental and purposeful lack of understanding of who Arabella is and what the company actually does.
CRC’s book is not just a compilation of falsehoods; it’s a calculated effort to discredit Arabella Advisors and the vital work our employees do. Through distorted narratives and unfounded claims, CRC seeks to undermine Arabella’s credibility and sow doubt about the integrity of our efforts. But Arabella’s commitment to client service, ethical practices, and our core values is resolute, and we will continue to operate with initiative and integrity regardless of attempts to tarnish our reputation. Arabella Advisors stands firm in our mission to support changemakers and advance social impact, and we are extraordinarily proud of the work we do to help build a better future for all.
