> Elon said we should announce an initial $1B funding commitment to OpenAI. In total, the non-profit has raised less than $45M from Elon and more than $90M from other donors.
This is not reflected in their 990's. They claim $20 million in public support and $70 million in "other income" which is missing the required explanation.
Also, why are none of the current board members of OpenAI included as authors here? Is there a problem in the governance structure?
Elon could not legally contribute more than he did without turning OpenAI into a private foundation. Private foundations are required to give away 5% of their total assets annually and are not permitted to own substantial stakes in for-profit businesses.
Showing old emails from people who clearly don't understand what they are getting into is not very helpful to their case. Maybe if they had talked to a lawyer who understood non-profit law, or even just googled it.
If the $70 million was in fact a donation instead of income, they fail the public support test and are de facto a private foundation.
Page 15 is Schedule A Pt 2 which shows the total contributions by year. They did indeed raise ~$133M over that time frame. Row 5 shows the contributions from any 1 person who contributed more than 2% of their total funding (this excludes other nonprofits) -- so the $41M there is definitely Musk. So his share was only ~30% of the total and the other 70% was public support which you can confirm in Section C at the bottom of that page.
"Public support" includes other nonprofits - and it's fine of e.g. Musk 'laundered' other funding via a DAF or something at a different nonprofit since the funds belong to that nonprofit and they have ultimate discretion over the grant.
I think I screwed up. It has been a while, but it looks like I misread Part II, Section B, Line 10 as $70 million, not $70,000. Let me check the previous years to see if I'm thinking of something else. Thanks for double-checking this.
I know they got $20 million from Open Philanthropy which qualifies as public support, so I am still wondering about the other $70 million, but it is not the smoking gun that I thought it was.
It has to be made up of donations from individuals under $2.6 million or from other public charities, but not private foundations.
Most rich people setup DAFs alongside their family foundations so that they can make large contributions to this type of org. without triggering disclosure or private foundation tests -- so e.g. Musk will create a DAF at Fidelity Charitable and give them $100M and collect the associated tax break in year 1 -- he can then direct Fidelity to grant $20M/year to OpenAI which will show up as Public Support since it's coming from another nonprofit entity and Fidelity maintains ultimate discretion over the funds.
Nice work. The IRS proposed regulations in 2017 that contributions from DAFs should be treated as if they came directly from an individual donor, but they are still waiting on final regulations.
Since private foundations aren't public charities, they don't have the pass-through protection of donor-advised funds, so this should have been excluded from the public support total because it is more than 2% of the total support.
This is not reflected in their 990's. They claim $20 million in public support and $70 million in "other income" which is missing the required explanation.
Also, why are none of the current board members of OpenAI included as authors here? Is there a problem in the governance structure?
Elon could not legally contribute more than he did without turning OpenAI into a private foundation. Private foundations are required to give away 5% of their total assets annually and are not permitted to own substantial stakes in for-profit businesses.
Showing old emails from people who clearly don't understand what they are getting into is not very helpful to their case. Maybe if they had talked to a lawyer who understood non-profit law, or even just googled it.
If the $70 million was in fact a donation instead of income, they fail the public support test and are de facto a private foundation.