Twitter Erupts Over Uber Partnership With Charity: Water

A New York Times story about a controversial plan to use Uber stock to provide bonuses for employees at Charity: Water set off a torrent of criticism on social media.

The charity’s founder, Scott Harrison, has grown in stature as a marketing whiz for his organization. However, many nonprofit observers complained his latest strategy, engineered with support from some of the nation’s top tech entrepreneurs, was debasing and damaging to the nonprofit world. Below is a roundup of reaction to the issue. Harrison defended the approach on Twitter.

Well, this one is going to rouse the haters and the hypers.

Instead: if ⁦@charitywater⁩ is really committed to transparency, conduct honest evaluation re. whether paying these bonuses leads to better community outcomes, the only metric that matters https://t.co/MGQx6Ix7ZC

— Antony Bugg-Levine (@ABLImpact) April 11, 2019

This is what bugs me. The intent of the founder is employees of Charity: water (a name that has a Ben Stiller satire feel to it) will be rewarded directly from and based upon earnings of the the charity’s investments. That’s inurement by definition.

— Philip Hackney (@EOTaxProf) April 12, 2019

Still can’t get over this. If you want to run it like a company so bad, run it like a company! Stop making the public subsidize it, make your big donors give up their tax deductions, and let the staff in on whatever “monetary upside” you want! Give them a cut of the donations!

— Josh Nathan-Kazis (@joshnathankazis) April 12, 2019

OK. This may be 1 of the instances in which #TwitterLaw has produced a useful conclusion. Do we agree on the following?:
-For H2O to hold Uber stock & then pay employees a cash bonus based on the IPO *is* inurement (& in some cases, could be an excess benefit transaction too) 1/

— Daniel Hemel (@DanielJHemel) April 12, 2019

Isn’t there also a problem with essentially creating a restricted fund that can only benefit insiders, regardless of how much it benefits them?

— Jeremy Coffey (@coffey_jt) April 12, 2019

Don’t know they r getting bad advice. But the expression of the founder in this article is not ideal in legal posture sense. And I actually think the biggest legal issue may be in whatever valuation they are giving donors of pre-IPO stock. The stock is not saleable when donated

— Philip Hackney (@EOTaxProf) April 12, 2019

Hey all / interesting and thoughtful thread (based on available info in article).. couple points of clarification for program intent. 1. Stock sold and turned into cash. 2. 20% goes into staff bonus pool. 3. Gets paid out to employees based on a number of conditions (contd)

— Scott Harrison (@scottharrison) April 12, 2019