Bryan Doreian, an officer of SDG Impact Fund, was sentenced to one year in prison for tax evasion, in a case heard in the U.S. District Court for the Eastern District of Pennsylvania.
The charges against Doreian did not directly relate to his work at the donor-advised fund, which three years ago reported a stunning $10 billion surge in assets apparently fueled by cryptocurrency and other noncash donations. But nonprofit tax experts say since the astronomical growth in SDG Impact Fund’s assets, questions remain about how much the nonprofit actually steers to causes supporting the United Nations Sustainable Development Goals, its stated mission.
The fund’s growth as reported in its annual Internal Revenue Service filings “defies belief,” Roger Colinvaux, a law professor at Catholic University of America’s Columbus School of Law, wrote in an email. “I am concerned that this organization is not operated exclusively for public interests as required by law. I would not advise donors to give to this group based on its public filings.”
Following a 2020 raid of his house by IRS agents, Doreian pleaded guilty in August to failing to disclose more than $1.3 million in income over two years from investments he made in PIVX, an open-source cryptocurrency that he worked on as a consultant.
Doreian was the primary architect of a plan to funnel charitable gifts from PIVX holders to the SDG Impact Fund, allowing investors to make gifts of crypto that had soared in value, while simultaneously benefiting the U.N.'s development goals and qualifying for a hefty tax break.
Prosecutors did not allege any misdeeds by the SDG Impact Fund, where Doreian served as “chief development magus.” Doreian’s attorney did not return calls. Nor did Tony Suber, SDG Impact Fund’s founding chair and executive director. Doreian is no longer listed as an officer on the fund’s website.
Doreian, who had no previous criminal record, could have received a maximum of six years in prison. Prosecutors argued that he shouldn’t receive the maximum penalty but should serve time based on past instances that suggest a pattern of dishonesty.
Doreian’s actions “demonstrate a mindset that places a premium on dishonesty and cheating followed by efforts to make amends and/or citations to charitable contributions and other good works,” Assistant U.S. Attorney MaryTeresa Soltis wrote in a sentencing memo for the court.
Doreian previously admitted to fabricating data in his postdoctoral research. And in 2017-18, when he and his wife reported just under $6,000 in total income, the couple spent more than $400,000 on home renovations, purchased $50,000 worth of gold, and incurred credit card bills of more than half a million dollars from trips to Lisbon, Miami, Seoul, and other cities, according to Soltis’s sentencing memo.
Doreian had said that he was a victim of identity theft and others had racked up the debt but recanted after the IRS raid.
In arguing for a light sentence, Doreian’s lawyer, David Jay Glassman, noted that his client’s wife has battled debilitating illnesses for the past several years, leaving Doreian as the primary caretaker for their two children. His charitable work at SDG Impact Fund should also be taken into consideration, said Glassman, who included a letter from Suber in his case to the judge.
“Bryan has been a hardworking, dedicated individual throughout his tenure with us, both personally and professionally. He has contributed to our global philanthropic community in tremendously meaningful ways, and I have no doubt that, with the proper guidance and second chance, he will once again become a contributing and valued member of our global society,” Suber wrote.
Crypto Philanthropy Questions
While Doreian’s trial is over, questions remain among nonprofit tax experts about the charity he worked for. In 2021, SDG Impact Fund reported that its assets had grown from $238 million the previous year to $10 billion, making it roughly the same size as well-capitalized private foundations such as the Packard Foundation.
The growth was due to gifts of crypto, noncash assets such as nonfungible tokens — or NFTs, which are unique digital assets that are often traded as art — as well as other types of art. SDG Impact Fund and other donor-advised funds reported huge growth, as the value of those assets skyrocketed. But in 2022, crypto gifts to donor-advised funds slid, as the collapse of the FTX crypto exchange roiled the market for digital currency.
Despite crypto’s plunge in value, SDG Impact Fund reported net assets of $10.1 billion in 2022, showing no decline from the 2021 total. The fund has not filed an IRS 990, a report of its grant making, revenue, and balance sheets, for 2023.
“What you see in the financial statements looks more like a mom-and-pop operation,” said Brian Mittendorf, an accounting professor at Ohio State University’s Fisher College of Business. “Once you’re at a $10 billion level, I would expect that we would have a better understanding of what it is they do.”
Donor-advised funds aren’t required to parcel out donations on a specific time frame. Donors can take an immediate tax benefit for a gift and let it sit in a donor-advised fund for as long as they want, unlike a private foundation which must dedicate at least 5 percent of its assets to charitable work each year.
In 2021, the first year the SDG Impact Fund reported its $10 billion asset figure, the fund made $4.3 million in grants. The following year, it reported $8.5 million in grants from its 146 donor-advised fund accounts, meaning less than 0.1 percent of its asset base went to charitable causes.
It is not clear if the regulatory environment for crypto donations to charity will be modified any time soon. Charity regulations are being targeted for an overhaul, with expiring provisions to the tax code at the end of 2024, creating an opportunity to require more transparency in the operation of donor-advised funds.
But crypto advocates may have a lot of sway in the incoming Trump administration, given the president-elect’s approval of the decentralized currency and his family’s new crypto venture, World Liberty Financial. Leading up to the election, Fairshake, the industry’s largest political action committee, spent more than $100 million on several dozen candidates — many of whom won.
As the crypto industry prepares to fight new regulations, the failure of new rules to keep up with technology changes are “particularly vexing” when it comes to charitable gifts using cryptocurrencies and NFTs, wrote Lloyd Hitoshi Mayer, a law professor at the University of Notre Dame, in a 2023 paper.
“Charities and donors are increasingly involved in transactions involving these new assets, with little guidance about how this law applies to those transactions,” he wrote.
Academics and potential donors also have little guidance on what the SDG Impact Fund does, “apart from receiving massive amounts of digital assets and making comparatively minuscule grants for vague purposes,” said Catholic University’s Colinvaux, who was formerly legislative counsel at the U.S. Congress Joint Committee on Taxation.
“There may be a real charity lurking behind the face of the 990, but it’s awfully hard to tell,” he said.
