It boosts their finances by millions of euros ahead of crucial European Parliament elections next week.
A quarter of all private funds donated to political parties in the EU go to far-right, far-left and populist movements, a Guardian analysis has revealed.
As opinion polls predict a rise in support for hard-line conservative, Eurosceptic and pro-Russian parties, the Guardian and 26 other media partners, led by investigative group Follow the Money, publish the Transparency Gap - the most comprehensive analysis of political funding in the EU to date.
The data was collected from the annual reports of more than 200 parties in 25 countries.
It shows that €150 million, equivalent to €1 in every €4 of all private donations made between 2019 and 2022, went to populist and extreme political parties.
Far-right groups have attracted more than 97 million euros, which equates to 1 euro for every 7 euros of private funds.
The project uses the same classification of parties as that of the research group The PopuList, which defines the far right as having a nationalist and authoritarian ideology.
While most countries oblige parties to declare their total income from private and public sources, the rules vary widely, and funding is a "black box" in some Member States. Three-quarters of them do not publish any information or publish only partial data about who the natural or legal persons are behind the donations.
Gaps in transparency exist even when parties follow their country's rules. The probe found no signs of wrongdoing, but a large-scale study of political party funding commissioned by the European Parliament concluded that a lack of transparency could lead to corruption risks.
"Although all EU Member States have adopted provisions on the reporting and public disclosure of donations, what must be reported and what must be disclosed varies widely. There is often a striking discrepancy between the low thresholds for reporting and high disclosure thresholds, and the average threshold of 2,400 euros carries potential corruption risks," the report states.
"Nothing prohibits parties from publishing more detailed information than required by law," said Fernando Casal Bertois, an expert on European political parties and systems and associate professor of comparative politics at the University of Nottingham.
"But almost nobody does. The parties are not interested in transparency. They think it will limit them," he added.
When other forms of funding are included - specifically membership and donations made by a party's politicians or officials - hardline and populist parties captured a fifth of the funds raised between 2019 and 2022, amounting to almost €500 million, the data show. For far-right parties, the amount is nearly 200 million euros - 1 euro for every 11 euros. /BGNES
