The U.S. Department of the Treasury is moving to pull back the curtain on one of the most opaque corners of the dark money world, an effort that could shine a light on the financial networks fueling decades of climate lawsuits against American energy companies.
In a recent announcement, Treasury said the Internal Revenue Service plans to revise its Form 990, the annual disclosure required of tax-exempt organizations, to provide clearer reporting on how nonprofits raise and spend money, particularly in areas like government grans and fiscal sponsorships. Treasury Secretary Scott Bessent said:
“Public money and tax-exempt status demand public accountability. We are ending the days of hiding fraud, abuse, and extremist activity behind complicated nonprofit arrangements.”
Treasury’s announcement puts a spotlight on fiscal sponsorship, a legal but increasingly scrutinized structure that allows larger nonprofit organizations to operate smaller projects under their umbrella. While widely used, Treasury acknowledged that these arrangements can be used to obscure who is running projects, who controls the money, and how those funds are ultimately deployed.
Dark Money Climate Lawfare in the Spotlight
That concern is no longer theoretical.
In recent years, a growing body of reporting and Congressional inquiry has focused on the role of dark money nonprofits in supporting climate lawsuits. One of the most frequently cited entities is the New Venture Fund (NVF), a nonprofit and major hub in a broader network of advocacy groups operating through fiscal sponsorship structures.
Through this model, projects like the Collective Action Fund (CAF) operate within New Venture Fund’s umbrella rather than as standalone organizations, meaning their finances are folded into the sponsor’s disclosures rather than reported independently. That structure makes it significantly harder to trace how funding moves from donors to downstream recipients.
Reporting and congressional investigations have pointed out financial links between CAF and the law firm Sher Edling, which is representing more than two dozen states and municipalities that are suing energy companies. Those same inquiries and reports have also highlighted how funding tied to high-profile donors, including the likes of Leonardo DiCaprio, have moved through nonprofit intermediaries connected to the broader climate litigation advocacy ecosystem.
CAF was previously fiscally sponsored by another dark money group, the Resources Legacy Fund (RLF), before switching to NVF’s fiscal sponsorship in 2021. DiCaprio’s foundation famously awarded grants to RLF in 2019 to support climate lawsuits. Fox News reported in 2022:
“The email correspondence took place two months before the Leonardo DiCaprio Foundation publicly announced it would contribute $20 million in grants to various climate and conservation causes. The group’s announcement, which has since been deleted but remains archived, included a grant to the RLF ‘to support precedent-setting legal actions to hold major corporations in the fossil fuel industry liable…’”
If implemented, the revised Form 990 requirements could force dark money groups like NVF and RLF to more clearly identify fiscally sponsored projects, disclose who controls project funds, and provide more detailed accounting of where money ultimately goes. That, in turn, could make it far easier to evaluate how dark money flows through layered nonprofit structures and whether those funds are supporting advocacy, litigation infrastructure, or both.
Potential to Expose Foreign Funding
These proposed changes could also raise new questions about whether funding is originating from foreign sources before reaching dark money nonprofits bankrolling the lawfare campaign.
That concern has already surfaced in congressional oversight. As Energy In Depth previously noted, NVF was founded and administered by Arabella Advisors (now rebranded as Sunflower Services), and has directed millions of dollars toward climate litigation efforts. Swiss billionaire Hansjorg Wyss has also been identified as a major backer of the Arabella network, which in turn has financed the efforts of Sher Edling, raising the specter that foreign cash could be intertwined with active climate litigants.
In 2023, an IRS complaint was filed against Arabella Advisors’ nonprofits for alleged violations of their tax-exempt status. The firm, which has taken in hundreds of millions of dollars from its nonprofits for management services while hiding donor information and what that money is used for.
Treasury officials say proposed rules will be released soon, followed by a public comment period that will determine how far the agency ultimately goes.
Bottom Line: Treasury’s 990 overhaul signals a new phase of federal scrutiny aimed squarely at the financial architecture behind climate lawfare. If the rules deliver on their promise, the opaque funding networks financing legal attacks on American companies may soon face unprecedented transparency.
