How Democracies Are Captured—and What Nonprofit Leaders Can Do About It

Imagine waking up one day to find that elections still happen, newspapers still print, and nonprofits still operate—but the real power is concentrated in the hands of a few, and nothing seems to change.

This is not science fiction. It’s how democracies erode—slowly, systematically, and often legally.

Leaders in countries like Russia and Venezuela didn't need a coup to seize control. They captured the courts, the media, and the political system from within—turning democracy into a hollow shell of itself.

This phenomenon, widely discussed among scholars and practitioners, is known as “State Capture”—a form of systemic corruption where private interests, typically powerful corporations and elites, use legal and quasi‐legal means to influence or control key state institutions, thereby shaping policies and resource allocation in their favor. The term has been used by the World Bank since 2000 to guide policy analysis.

There is growing evidence that the U.S. has entered Stage 2 of this process, with a Republican-led Congress and a Supreme Court full of loyalists undermining traditional checks. While key safeguards are compromised, pockets of independent oversight remain, showing our institutions can still resist. However, if subversion continues, we risk moving toward Stage 3.

Ultimately, the future of our democracy depends on how civil society—including nonprofits—responds. Every vote, protest, and act of advocacy can restore balance. By learning from history and mobilizing collectively, we have a chance to push back against state capture and rebuild a more accountable system.

(The following international comparisons are illustrative rather than direct analogies, as each country’s context is unique. For additional references, please consult reports from the Brennan Center for Justice or the Freedom Center.)?

The Four Stages of State Capture

Stage 1: Political & Economic Entrenchment

Corporate titans and political leaders align to tilt the system in their favor:

• Disinformation spreads through partisan media.
• Gerrymandering and voter suppression become normalized.
• Corporate and political interests merge, influencing policymaking behind the scenes.

Examples: Italy, Brazil, Mexico

Stage 2: Institutional Capture (Where We Are Now)

Once in power, political actors start rewiring institutions to make fair competition nearly impossible:

• Judges are appointed to serve political goals. Courts increasingly serve ideological or partisan interests, weakening legal protections for democratic rights.
• Election oversight is weakened. State legislatures pass laws allowing partisan officials to override or replace local election administrators.
• Law enforcement is politicized. Officials protect allies while targeting protestors, journalists, and civil rights organizations.
• Journalists and advocacy groups are attacked. Independent media and nonprofits are labeled as ‘enemies of the state.’

Recent U.S. examples:

• Takeovers of federal agencies – The Department of Government Efficiency (DOGE), widely reported in major news outlets, operating outside Congressional oversight, is actively dismantling key government functions and sidelining democratic accountability.
• Election system manipulation – Laws allow partisan state officials to override or replace local election administrators, weakening nonpartisan oversight.
• Voter roll purges and restrictions – Black, Latino, and low-income voters are disproportionately removed, often without proper notification. New voter ID laws and mail-in ballot restrictions make voting harder.

Examples: United States, Poland, India

Stage 3: Electoral Capture

Once institutions are compromised, the next step is making elections meaningless:

• Voting restrictions expand, making it harder for certain groups to vote.
• Election results can be overturned by loyalists in state legislatures.
• Civic groups face financial and legal pressure to silence dissent.
• Opposition parties are crushed through legal harassment, arrests, or rule changes.

Current risks in the U.S.:

• Several states have already passed laws giving legislatures the power to reject election results.
• Gerrymandering is creating virtually uncompetitive districts.
• Partisan election audits are undermining public trust.

Examples: Russia, Venezuela, Belarus

Stage 4: Full Authoritarianism

At this point, democracy is in name only:

• Dissent is criminalized.
• Courts exist only to serve those in power.
• Independent media is gone.
• International legitimacy fades, but the regime remains.

Examples: North Korea, China, Myanmar

Lessons from U.S. History: The Age of the Robber Barons

This isn’t the first time America has faced a dangerous concentration of power. In the late 19th and early 20th centuries, corporate monopolies—led by figures like Rockefeller, Carnegie, and Vanderbilt—had near-total control over industries, politics, and even the courts. The working class had little power, and corruption ran unchecked.

But the people fought back.

• Labor unions organized massive strikes and demanded fair wages and conditions.
• Investigative journalists (“muckrakers”) exposed corporate and political corruption.
• Progressive reformers passed antitrust laws and protections for voting rights.

The result? The Gilded Age gave way to the Progressive Era, where power was rebalanced toward the public good.

This historical example demonstrates that concentrated power can be broken—but only when civil society mobilizes, speaks out, and demands systemic change.

Why Nonprofits Are Targets

Nonprofits are among the first to feel the impact when a government moves toward authoritarianism. Why?

• They expose corruption and human rights abuses.
• They provide services that authoritarian governments neglect.
• They mobilize communities against repression.

How this is happening in the U.S.:

• IRS scrutiny of certain advocacy nonprofits under political pressure.
• State laws restricting protest rights under the guise of “public order.”
• Defunding of organizations that challenge government policies.

What Nonprofit Leaders and You Can Do—Before It’s Too Late

1. Strengthen Financial & Organizational Resilience

• Reduce Reliance on Government & Politicized Funding – Diversify revenue sources, build unrestricted reserves, and explore donor-advised funds (DAFs) to protect donor anonymity.
• Establish Emergency & Legal Defense Funds – Prepare for politically motivated audits, funding cuts, or legal challenges with pre-secured financial and legal resources.
• Develop Leadership Succession & Crisis Plans – Cross-train staff and board members to ensure organizational continuity if leaders are targeted.

2. Protect Data, Communications & Digital Security

• Safeguard Donor & Advocacy Data – Encrypt donor records, minimize legally discoverable data, and explore fiscal sponsorships to shield sensitive funding sources.
• Secure Internal Communications – Use encrypted email (ProtonMail, Tutanota), messaging (Signal, Element), and document storage (CryptPad, Nextcloud) to prevent surveillance.
• Defend Against Cyberattacks & Website Takedowns – Implement DDoS protection, secure hosting, and automated data backups.

3. Mobilize & Strengthen the Nonprofit Sector

• Build Cross-Sector Coalitions – Collaborate with other nonprofits, unions, media, and legal advocates to collectively resist democratic backsliding.
• Train Boards & Staff on Advocacy & Legal Protections – Ensure leadership understands how 501(c)(3) organizations can legally engage in advocacy without risking nonprofit status.
• Proactively Counter Disinformation & Smear Campaigns – Prepare crisis communication plans and monitor government-led misinformation campaigns targeting nonprofits.

4. Defend Civic Space & Legal Protections

• Push Back Against State Interference in Nonprofit Operations – Advocate for stronger nonprofit protections against politically motivated audits, funding restrictions, and legal threats.
• Prepare for Legal & Financial Attacks – Engage pro bono legal teams, participate in nonprofit defense coalitions, and ensure access to emergency legal support.
• Support Election Protection Efforts – Partner with nonpartisan voting rights groups to safeguard election administration and prevent partisan takeovers of oversight bodies.

5. Plan for Worst-Case Scenarios

• Secure Alternative Financial & Operational Structures – Establish financial resilience through international accounts, decentralized funding, and strategic partnerships.
• Engage International Human Rights & Philanthropy Networks – Global support can provide funding, advocacy leverage, and legal protection when domestic avenues close.
• Prepare for Relocation & Continuity if Necessary – In extreme cases, ensure key nonprofit functions can continue operating from safe jurisdictions.

This Fight Is Winnable—If We Act Now

Democracy can still be saved—but only if civil society mobilizes now. By learning from historical precedents and leveraging proven strategies—like those seen during the Progressive Era—the nonprofit sector can play a critical role in pushing back and restoring a healthier balance of power.

What will you do today?

What steps are you taking to defend democracy?

What signs are you seeing in your community?

Let’s talk.

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