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Tag: Nonprofit business and finance

  • Nonprofits strain to support voters in Georgia Senate race

    Nonprofits strain to support voters in Georgia Senate race

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    When the closely watched Georgia Senate race went to a runoff, nonprofit organizations that educate voters strained to ramp up operations again after Election Day.

    “It’s not just, ‘Find new canvassers and recruit new volunteers.’ It’s also, ‘Find new money,’” said Kendra Cotton, CEO of New Georgia Project — founded by Stacey Abrams, the Democrat who lost her second campaign to become the state’s governor last month. The project’s goal was to raise $1 million to inform voters about the runoff, help them find out where and how to vote through phone banking and text banking, as well as voter protection at the polls. As of Monday, they have raised $797,000.

    Grassroots groups have missed the mark in educating donors, Cotton said, explaining that she’ll hear from even high dollar donors that they don’t need to donate to her group because they’ve already given to Abrams or to Democrat Sen. Raphael Warnock, who will take on Republican challenger Herschel Walker in the runoff.

    Many don’t understand, she said, that their political donations do not trickle down and that grassroots nonprofits cannot work with campaigns or advocate for candidates.

    However, the group believes their efforts are essential, especially in this case. Many voters don’t know there is a runoff and are confused about whether they are eligible to vote in it, Cotton said. Canvassers will say, “’Yes, ma’am or yes sir, you might have already voted on November 8th, but there is another election on December 6th,’ and they’re like, ‘What the hell? Between who?’” Cotton said.

    In Georgia, where district boundaries and voting rules have changed since 2020, this kind of voter outreach and education is vitally important and not something most political campaigns focus on, she said. Her organization put together a map of the hours and locations of early voting sites in every county, which numerous other nonprofits are using.

    Other grassroots organizations like Asian Americans Advancing Justice-Atlanta are also involved in voter education, targeting what Phi Nguyen, the organization’s executive director and a civil rights attorney, called “high potential, low propensity” voters, especially in Asian American and Latino communities.

    “We will be knocking on doors, we’ll be texting, we’ll be phone banking, and we’ll be doing election protection,” said Nguyen, whose sister Bee Nguyen was the Democratic nominee for secretary of state in Georgia. In that race, the incumbent Republican Secretary of State Brad Raffensperger was reelected.

    Asian Americans Advancing Justice-Atlanta also provide interpreters for people at polling sites in 10 counties, including five in the Atlanta area.

    The Community Foundation for Greater Atlanta and the Southern Poverty Law Center (SPLC) support dozens of organizations like these in five southern states. In June 2020, SPLC announced it would grant $30 million from its endowment to fund grassroots organizations “to increase voter registration and participation among people of color with a lower propensity to vote.” Last December, it added another $100 million over 10 years, again from its endowment, to its Vote Your Voice grant program, which the Community Foundation for Greater Atlanta is overseeing.

    The project is part of SPLC’s mission of achieving racial justice in the South, said senior advisor Amy Dominguez-Arms. Contributions to SPLC more than doubled from 2016 to 2017, the year Donald Trump was elected president, from $58 million to $136 million according to nonprofit information source Candid.

    Philanthropic funding for tax exempt nonprofits that do nonpartisan voter registration or mobilization is often concentrated in the two months before Election Day, but this support is long term. Participation in a democracy doesn’t just happen when it’s time to vote, Dominguez-Arms said.

    Major philanthropic conveners like the Funders’ Committee for Civic Participation are encouraging donors who want to fund civic engagement or democracy portfolios to unlink their funding from the political calendar.

    “Organizations, if they’re really going to be building civic engagement in democracy, small ‘d’ democracy, the money is needed year round,” said Paul Ryan, deputy executive director of the FCCP.

    Political donations that are not tax exempt are also pouring into the Georgia runoff, even though Democratic control of the Senate is already decided. The IRS rules that govern nonprofit activity allow nonpartisan voter registration and mobilization as well as things like education on the voting process, creating candidate questionnaires and supporting or opposing ballot measures.

    Nonprofits are prohibited from supporting political campaigns in any way whether that is through donations, the sharing of resources or written or verbal endorsement.

    The rules for nonprofit activity around elections have come under scrutiny especially after Facebook founder Mark Zuckerberg and his wife Priscilla Chan made a $400 million donation in 2020 to two nonprofits that then granted funds to help elections officials administer the vote during the pandemic when neither vaccines nor effective treatments were available.

    Lawson Bader, president and CEO of DonorsTrust, whose mission is to safeguard the philanthropic intent of self-described conservative and libertarian donors, said his organization hasn’t tracked an increase in donations around the midterms, though he wouldn’t be surprised if there was more interest in helping elections become more efficient.

    He said it’s worrisome that frustration with money’s influence in politics has spilled over from the world of political action committees and 501(c)4 nonprofits, whose work is not tax exempt, into nonpartisan work.

    “I don’t think anyone disagrees that it would be great if this didn’t have to be philanthropy and it could be resourced through the government. But unfortunately, that’s not where we’re at,” said Ashley Spillane, senior advisor at Power the Polls, an initiative that started in 2020 to help recruit poll workers when the pandemic was keeping many, especially older poll workers, from participating.

    Her organization recruited potential poll workers on Election Day this year and is continuing to recruit for the runoff in Georgia.

    Voters have less than three weeks to receive and return absentee ballots and at least five days of early voting during the last week of November. That’s a narrow timeframe, Spillane said.

    “Voters in Georgia are going to have to show up to polling locations,” Spillane said. “And making sure that they are incredibly well staffed and that there aren’t any gaps or polling location closure closings is absolutely critical in an election like that.”

    The Warnock campaign sued successfully to allow for early voting on the Saturday after Thanksgiving, though only some decided to open polling stations that day, leading to long lines and hours-long waits.

    Political affiliations vary among the communities that Nguyen’s organization reaches, she said, given the range of ethnicities, languages and migration backgrounds that shape people’s worldviews.

    “When we’re out there doing nonpartisan voter registration and getting out the vote, it really could be that the person is voting for anyone,” she said, adding, “It’s absolutely a nonpartisan issue to want every Georgian and every eligible voter to be able to access the ballot.”

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    Associated Press coverage of philanthropy and nonprofits receives support through the AP’s collaboration with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.

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  • Fidelity Charitable: New grants to surpass deposits in 2022

    Fidelity Charitable: New grants to surpass deposits in 2022

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    Fidelity Charitable, the nation’s largest grantmaker, expects 2022 will be the first year since 2018 that the value of grants from its donor advised funds exceeds the value of investments going into the funds.

    Jacob Pruitt, Fidelity Charitable’s president, told The Associated Press that donations this year are on track to set a record, even before counting gifts from GivingTuesday, which has grown into a major fundraising day for charities since its launch 10 years ago. In 2021, Fidelity Charitable donated more than $10.3 billion in donor-recommended grants to more than 187,000 organizations.

    “It’s kind of amazing when you think about the generosity,” Pruitt said. “Even in spite of inflation and all kinds of noise in the marketplace, our donors are truly engaging and getting money to the right places.”

    Pruitt cautioned that December generally brings plenty of investments into donor advised funds — or DAFs — as people move money around for tax purposes. However, he also expects strong end-of-the-year donations as well.

    “With the situation in Ukraine and all these natural disasters, our donors are ready,” Pruitt said. “That’s what these accounts are designed for. Individuals put money in and they grow. Then, when there’s a scenario where it’s needed, it can flow out in a thoughtful way. And so I think that the platform is doing what it is there to do.”

    The strength of Fidelity Charitable grants comes at a time when donor advised funds are under fire for what critics call loopholes that allow donors to receive tax benefits immediately, while grants can be delayed indefinitely. The bipartisan Accelerating Charitable Efforts Act to require funds invested in donor advised funds to be granted to nonprofits within 15 years is under consideration in Congress.

    Chuck Collins, director of the Program on Inequality and the Common Good at the Institute for Policy Studies, said the growth of donor advised funds remains troubling because loopholes in their oversight allow billions of dollars to be parked in the funds instead of going to communities in taxes or directly to charities.

    “It’s great that more money is flowing out,” Collins said. “But we want to know more. We want to know that it’s reaching charities instead of being shuffled around from DAF to DAF.”

    In “ Gilded Giving 2022,” a study Collins co-authored, he found that the popularity of DAFs is speeding a shift in philanthropic donations from community-building to legacy-building gifts to universities and museums.

    However, Pruitt said donor advised funds can help reverse the ongoing drop in the number of individual donors in America. He said Fidelity Charitable removed the $10,000 minimum requirement to open a donor advised fund, making it available to everyone.

    “It’s simple, effective and it allowed individuals from all walks of life to have an opportunity to participate in this amazing product,” he said. “What we’re focusing on next is expanding the education and awareness in the marketplace.”

    Fidelity Charitable recently began offering NFTs in an effort to reach younger investors. And Pruitt said it is also working on improving its smartphone apps.

    “We want to make sure that these tools are where the next generation of investors are,” he said. “We want to continue to make this simple and effective from a digital perspective so people can engage in a comfortable way.”

    However, Collins said the issue with the declining number of individual donors isn’t due to a lack of technology. It’s due to a lack of money.

    “Fewer middle class and lower middle class people are donating and it has nothing to do with tax laws,” he said. “It has to do with economic insecurity. They have less money and less of a cushion for donations.”

    Rather than opening more donor advised funds, Collins suggests that people simply donate directly to charities in their communities, much like many nonprofits on GivingTuesday suggest.

    GivingTuesday CEO Asha Curran said the day raised $2.7 billion in 2021 and offers people many ways to show their generosity.

    “The relatively small act of giving something invests a person in their community in ways that have powerful knock on effects,” she said. “Once a person is a giver and really feels like ‘I have the capacity to make a difference in the world,’ there are many, many wonderful things that happen in terms of their place in their community as a result.”

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    Associated Press reporter Thalia Beaty contributed to this report from New York.

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    Associated Press coverage of philanthropy and nonprofits receives support through the AP’s collaboration with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.

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  • Fidelity Charitable launches NFT raffle amid crypto downturn

    Fidelity Charitable launches NFT raffle amid crypto downturn

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    NEW YORK — Fidelity Charitable is getting into NFTs, the digital images that are registered on the blockchain, despite a torrent of bad news from the adjacent world of cryptocurrencies.

    The nation’s largest grantmaker is sponsoring a raffle that ends Tuesday, where participants can claim one of the NFTs, which stands for nonfungible token, and 50 will win $1,000 to donate through a donor advised fund at Fidelity.

    “The reason we’re doing this is we really believe there’s a whole new generation of givers and philanthropists out there,” said Amy Pirozzolo, head of donor engagement for Fidelity Charitable. “We want to be where they are and the channels they use and the formats they use and further encourage their generosity.”

    Around 16% of Americans say they invested in cryptocurrencies, according to a poll from Pew Research Center last year. The demographic most likely to invest were men between the ages of 18 and 29, with 43% reporting that they had invested.

    The blockchain is the technology that underlies the trading of cryptocurrencies, but it can also record the ownership of digital items like images, videos or Tweets. Fidelity said that 50,000 different wallets, potentially representing that many individuals, have already registered to create an NFT and potentially win the money to donate.

    Contributions in cryptocurrency to donor advised funds at Fidelity exploded last year, growing from the equivalent of $28 million in 2020 to $331 million in 2021, Fidelity has said.

    Speaking of the NFT project, Jacob Pruitt, president of Fidelity Charitable, said, “I think it’ll be a unique way to engage with next gen investors. It’s another way that I think Fidelity is innovating and leaning into a new space.”

    Donor advised funds allow donors to claim a tax credit for charitable donations, but do not require them to give those funds away within any specific timeframe. Organizations that host DAFs, like Fidelity Charitable, also handle more complex donations, which includes exchanging the assets for cash and producing receipts for donors for tax purposes.

    “Many of the nonprofits either can’t take on these assets or they have to hire outside counsel or people to staff to do it,” Pirozzolo said.

    One reason for the jump in cryptocurrency donations is that until recently, their value had appreciated significantly. The cryptocurrency market saw a huge boom in 2021 with the price of Bitcoin, the first cryptocurrency, rising to an all time high of around $68,000 in November last year.

    But the meltdown of Terra — a stablecoin, or a type of cryptocurrency that tries to peg its value to an asset like the U.S. dollar — in May brought down a series of major cryptocurrency businesses. Then, earlier this month, one of the largest cryptocurrency exchanges, FTX and related entities, suddenly filed for bankruptcy leaving both American and international users unable to access assets they held on the exchange.

    James Lawrence, co-founder and CEO of Engiven, which facilitates cryptocurrency to nonprofits, including Christian ministries, observed that many people giving cryptocurrencies are making major gifts and that often those happen in the last quarter of the year. That means it’s too early to say how the cryptocurrency market’s fluctuations may impact donations this year. He said he doesn’t see people donating cryptocurrencies as that different from other donors.

    “They just have a different asset to give and they’re going to give the most appreciated asset they can,” Lawrence said.

    Of the more than 1.5 million nonprofits registered with the Internal Revenue Service in the U.S., Lawrence estimated that only four or five thousand could receive cryptocurrency donations directly.

    “That’s a huge market that still doesn’t,” he said. He also has observed that many giving large donations in cryptocurrency (they facilitated one donation of $10 million in cryptocurrency assets) are the same types of people who give large donations in general, and not necessarily the younger demographics that are more likely to invest in cryptocurrency.

    “Many of the largest gifts we’ve processed have been from an older demographic who have a tradition of giving large gifts in multiple asset classes,” he said.

    Another organization, Endaoment, also facilitates cryptocurrency donations to nonprofit organizations as well as hosting pooled funds to benefit certain types of nonprofits. Robbie Heeger, the organization’s president and CEO, said besides that fact that nonprofits may receive donations from cryptocurrency donors that they wouldn’t otherwise, cryptocurrency proponents are also eager to draw in new users.

    “This is a leapfrog opportunity for nonprofit organizations to move from paper checks” to cryptocurrency Heeger said. “And the crypto space is very focused on adoption flywheels, on ways to incentivize or encourage the traditional economy to migrate into the crypto economy.”

    He encouraged newcomers to the cryptocurrency space to carefully research projects they might get involved with and to look for ones that have gotten outside audits from professional auditors.

    Pirozzolo argued that the Fidelity Charitable promotion using NFTs is separate from the cryptocurrency ecosystem.

    “This is really about the blockchain and having a fun way to celebrate with digital art the generosity of giving,” she said.

    The company is paying for the cost of creating the NFTs, which includes a “gas” fee that pays for the creation and registration of the item, and also said that it has compensated the artists who made the images.

    People who claim the NFTs will need to sign up for a cryptocurrency wallet that has access to the Polygon blockchain. The Fidelity Charitable NFTs will be hosted on the platform OpenSea.

    Participants will see the NFT in their wallet when they sign up, but the art itself and the winners of the $1,000 tickets won’t be revealed until Giving Tuesday, Nov, 29.

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    Associated Press coverage of philanthropy and nonprofits receives support through the AP’s collaboration with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.

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  • FTX bankruptcy also endangers founder’s philanthropic gifts

    FTX bankruptcy also endangers founder’s philanthropic gifts

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    NEW YORK — The rapid collapse of cryptocurrency exchange FTX into bankruptcy last week has also shaken the world of philanthropy, due to the donations and influence of FTX founder Sam Bankman-Fried in the “effective altruism” movement.

    The FTX Foundation — and other related nonprofits mostly funded by Bankman-Fried and other top FTX executives – says it has donated $190 million to numerous causes. Earlier this year, the foundation’s Future Fund announced plans to donate an additional $100 million, with hopes of donating up to $1 billion in 2022. Because of the bankruptcy, that won’t be happening now.

    And donations to numerous nonprofits, even those that have already received money from groups related to Bankman-Fried, are now in doubt.

    FTX, the hedge fund Alameda Research, and dozens of other affiliated companies sought bankruptcy protection in Delaware Friday after the exchange experienced the crypto equivalent of a bank run. Customers tried to remove billions of dollars from the exchange after becoming concerned about whether FTX had sufficient capital.

    Bankman-Fried has resigned from the company. His net worth, estimated earlier this year at $24 billion, has all but evaporated, according to Forbes and Bloomberg, which closely track the net worth of the world’s richest people.

    On Thursday night, FTX Future Fund’s leadership team resigned, warning grantees that they were unlikely to pay out promised funds.

    “We are devastated to say that it looks likely that there are many committed grants that the Future Fund will be unable to honor,” the team wrote in a joint post in the Effective Altruism Forum. “We are so sorry that it has come to this.”

    ProPublica, the investigative journalism nonprofit, said it has been told by Building a Stronger Future, a foundation funded by Bankman-Fried, that the remaining two-thirds of its $5 million grant to report on pandemic preparedness and biothreats is now on hold.

    ProPublica received one-third of the grant in February and expected one-third annually until 2024. The nonprofit said Building a Stronger Future is assessing its finances and that it was talking to other funders about taking on some of its grant portfolio.

    “Regardless of what happens with the remainder of the grant, we are deeply committed to this important work and the team we have assembled to pursue it,” the nonprofit said in a statement. “We will use other resources to make sure that work continues.”

    Bankman-Fried, 30, is the best-known proponent of the “effective altruism” social movement which believes in prioritizing donations to projects that will have the largest impact on the most number of people. Dustin Moskovitz, co-founder of Facebook and current Asana CEO and co-founder, and his wife Cari Tuna, are also major funders and backers of the movement, which also emphasizes that the lives of all people should be weighted equally, regardless of where they live now or if they will inhabit the earth generations in the future.

    “I wanted to get rich, not because I like money but because I wanted to give that money to charity,” Bankman-Fried told an interviewer in a YouTube video called “ The Most Generous Billionaire,” published in January last year.

    His ability to promote himself and FTX gave the exchange a higher profile than larger companies. FTX purchase the naming rights to the Miami Heat’s home arena last year, though Miami-Dade County decided Friday to terminate its relationship with the company and rename the arena. It purchased a buzzed-about ad during this year’s Super Bowl.

    Bankman-Fried did set up a philanthropic infrastructure through his exchange, FTX, which promised that 1% of its crypto exchange fees would be donated to charities. It also matched user donations made through its platform up to $10,000 a day. In total, the company said more than $24 million was donated through user fees, donations and its matching program before it suspended its services.

    Some “effective altruism” proponents advance the idea that making a lot of money is ethical as long as your goal is ultimately to give it away — sometimes shortened to “earning to give.” Bankman-Fried believed in this, signing The Giving Pledge in June as a promise that he would give away the majority of his wealth.

    However, some now blame Bankman-Fried’s “effective altruism” mindset for FTX’s troubles.

    “Either (‘effective altruism’) encouraged Sam’s unethical behavior, or provided a convenient rationalization for such actions,” tweeted Moskovitz, who has also signed The Giving Pledge. “Either is bad.”

    William MacAskill, a philosophy professor at Oxford University and a co-founder of the “effective altruism” movement, condemned Bankman-Fried for allegedly misusing customer funds.

    “Sam and FTX had a lot of goodwill,” MacAskill, who was also an unpaid advisor to the FTX Future Fund, wrote in a thread on Twitter. “And some of that goodwill was the result of association with ideas I have spent my career promoting. If that goodwill laundered fraud, I am ashamed.”

    MacAskill’s book, “What We Owe The Future,” prompted a wave of media coverage of the “effective altruism” movement this summer.

    Requests for comment were sent to the largest grantees listed on the FTX Future Fund’s website, including other “effective altruism” advocates like the Long-Term Future Fund and the Centre for Effective Altruism and Longview.

    In an interview with The Associated Press in May, Nick Beckstead, the CEO of FTX Foundation until he resigned Thursday, said there were about five people working at the foundation and that they were still working out how the various philanthropic projects started by Bankman-Fried would be structured.

    “It’s a bit shoestring,” he said.

    The community grew out of the work of philosophers at Oxford, including MacAskill, and debates of the merits of approaches and proposals on forums reflect the high-flying thinking of its origins.

    Beckstead acknowledged the community can be “strange and intense,” but also that its emphasis on quantifying impact helps decide where to direct donations. Beckstead did not immediately respond to a request for comment.

    “What is the cost per life saved or what is the cost per quality adjusted life year from this kind of activity?,” he previously said were some of the questions he likes to try to answer, drawing on input from subject matter experts.

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    Associated Press coverage of philanthropy and nonprofits receives support through the AP’s collaboration with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.

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