Foreign Funding Gap Leaves U.S. Think Tanks Exposed to Chinese Influence

In 2021, reporting by Axios detailed a $5 million grant from the China-United States Exchange Foundation to the George H. W. Bush Foundation for U.S.–China Relations.

The China-United States Exchange Foundation, or CUSEF, is registered as a foreign principal under the Foreign Agents Registration Act - meaning it has disclosed to the Department of Justice that it operates in the United States on behalf of a foreign interest and has hired American lobbying firms to advance its messaging.

Yet the Bush foundation had no legal duty to publicly highlight the grant because think tanks are not covered by the foreign-donor reporting rules that apply to universities.

That uneven standard, in which universities report large foreign gifts and think tanks do not, now sits at the center of a national security debate on Capitol Hill about how Chinese capital reaches U.S. civil society institutions.

Disclosure Rules Stop at Universities

Section 117 of the Higher Education Act requires U.S. colleges and universities that receive federal funding and meet certain accreditation criteria to report foreign gifts and contracts that reach at least $250,000 in a calendar year. This is according to a 2025 brief by the Congressional Research Service.

These institutions must file twice-yearly reports with the Department of Education that identify the foreign source and the aggregate value of covered gifts and contracts. This creates at least a baseline of visibility into major overseas support for campus activities.

Think tanks and many policy research organizations, by contrast, are organized as 501(c)(3) charities and fall outside Section 117. The Internal Revenue Service receives some donor information but does not make it public, leaving most foreign funding opaque to outside observers.

The Foreign Agents Registration Act focuses on entities that act as agents for foreign principals in political or public relations work. However, it does not require passive grant recipients to disclose donors unless they perform activities that meet registration thresholds, as outlined in analyses by law firms such as Wiley.

As a result, policymakers, journalists, and the public often learn about overseas funding of think tanks only when a recipient chooses to volunteer details or when an agreement surfaces through media reporting or separate legal disclosures.

Documented Chinese Funding Channels

CUSEF presents itself as a private nonprofit platform for dialogue, but its own Foreign Agents Registration Act filings - public DOJ records - identify it as a foreign principal that has retained American lobbying and public relations firms to advance its messaging.

Research by the Jamestown Foundation goes further, tracing CUSEF's board composition and programming to networks linked to the Chinese Communist Party's United Front Work Department.

Axios reported that the $5 million Bush foundation grant was structured as multi‑year support. The foundation derived a large share of its operating budget from CUSEF at the time of the agreement, underscoring the potential weight of a single foreign donor in a small policy organization.

Beyond CUSEF, Chinese telecommunications firm Huawei has supported U.S. research through intermediaries. In 2024, Bloomberg reported that the Washington-based Optica Foundation quietly accepted millions of dollars from Huawei to fund scientific prizes awarded to researchers, including at American universities.

Bloomberg’s reporting indicated that Huawei’s role was not initially disclosed to many prize recipients, even though the company appeared on U.S. lists of entities considered national security risks. The funding arrangement persisted for several years before it became public.

Optica later stated that it would end its financial relationship with Huawei after internal and congressional review. The episode illustrated how foreign funding can reach U.S. research communities through nonprofit structures without routine public visibility.

Congress Keeps Trying

Members of Congress have introduced several bills aimed at closing the nonprofit disclosure gap, with particular attention to think tanks that produce policy analysis and convene officials.

Representative Lance Gooden introduced the Think Tank and Nonprofit Foreign Influence Disclosure Act in June 2025. The bill, catalogued on Congress.gov, would require certain tax‑exempt organizations that seek to influence U.S. public policy or public opinion to disclose foreign contributions exceeding $10,000 from foreign principals on their annual tax returns.

Under H.R. 3966, summarized contribution information would be compiled into a public, searchable database maintained by the Treasury Secretary. This would give outside observers a structured way to track which organizations receive significant foreign support.

The bill’s findings section cites concerns about opaque foreign funding, including Chinese government‑linked sources. It notes that current law does not impose comprehensive donor transparency obligations on think tanks comparable to those facing universities under Section 117.

In the Senate, the FRONT Act introduced in July 2025 by Senator Ted Budd and several cosponsors would amend FARA. According to the description on the Budd Senate site, nonprofits receiving funds from foreign principals in countries of concern, including China, Russia, Iran, North Korea, Cuba, and Venezuela, could be required to register as foreign agents.

As of early 2026, both proposals remain at the committee stage and have not received floor votes. This leaves the pre‑existing framework of voluntary policies and limited statutory obligations intact for most think tanks.

Intelligence Community Warning

The unclassified 2025 Annual Threat Assessment of the U.S. Intelligence Community, released by the Office of the Director of National Intelligence, devotes attention to foreign influence operations, including those linked to the Chinese government.

In that report, the intelligence community states that Beijing is likely to feel emboldened to employ malign influence more regularly in the coming years. It warns that limited transparency around Chinese funding of U.S. organizations contributes to a growing national security risk.

The report’s language signals that funding opacity is not viewed only as a governance or ethics issue. It is seen as a factor that can complicate efforts to detect and counter foreign influence campaigns targeting domestic debate and institutions.

Legislative materials for H.R. 3966 explicitly reference the 2025 threat assessment and echo its concern. They highlight that undisclosed funding flows can obscure the extent to which foreign principals seek to shape expert commentary and policy analysis in the United States.

Why the Gap Persists

Many think tanks and nonprofit policy organizations argue that self‑imposed donor‑disclosure practices, combined with internal ethics policies, provide adequate safeguards.

The intelligence community's 2025 Annual Threat Assessment directly contradicts that position, identifying funding opacity as a growing national security risk rather than a managed one - but the industry argument has been effective enough in the legislative arena to slow disclosure bills across multiple congressional sessions.

Leaders of these institutions have raised concerns that broad, mandatory disclosure rules could deter legitimate international scholarly collaboration, expose donor identities in ways that chill giving, or impose administrative costs that divert resources from research.

Other analysts, including authors of congressional and research reports, caution that foreign money can influence research agendas through earmarked grants or thematic programs. They note that this effect is difficult to quantify without complete funding ledgers and consistent reporting.

Lobby groups representing the nonprofit sector have also opposed some proposed filing requirements on the grounds of donor privacy and regulatory burden. This opposition has contributed to the slow legislative pace despite bipartisan interest in foreign influence risks.

In practice, enforcement remains limited to the narrow circumstances in which existing statutes such as FARA or tax law clearly apply. There is no general obligation for think tanks to provide a line‑by‑line account of foreign contributions.

Back where the public debate often begins, with CUSEF’s multimillion‑dollar grant and Huawei’s use of a U.S. foundation to fund research prizes, the unresolved policy question remains. It is whether the public should have routine access to information about who finances the experts and organizations that shape U.S. debates on China.

Unless Congress revises the disclosure framework to cover think tanks more directly or regulators reinterpret existing statutes, the decision to reveal or withhold foreign‑donor information will remain primarily in the hands of recipient organizations and their benefactors.

Sources

• Axios Reporting. "Bush family nonprofits' $5 million deal with China influence group." Axios, 2021.
• Congressional Research Service. "Section 117 of the Higher Education Act: Reporting of Foreign Gifts and Contracts." CRS, 2025.
• The Jamestown Foundation. "The China–U.S. Exchange Foundation and United Front Lobbying." Jamestown Foundation, 2020.
• Bloomberg News. "Huawei Secretly Backs U.S.-Based Research With Millions in Prizes." Bloomberg, 2024.
• U.S. Congress. "H.R. 3966 – Think Tank and Nonprofit Foreign Influence Disclosure Act." Congress.gov, 2025.
• Office of the Director of National Intelligence. "2025 Annual Threat Assessment of the U.S. Intelligence Community." DNI, 2025.
• Office of Sen. Ted Budd. "Sens. Budd, Justice, Hawley, Ricketts Introduce Bill to Increase Transparency of Foreign Funds Fueling Left-Wing Agitators.." U.S. Senator Ted Budd website, 2025.