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From: Philanthropy Today
Subject: Nonprofits Stick With Cryptocurrency Despite FTX Scandal
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FTX Scandal Gives Cryptophilanthropy a Black Eye, but Nonprofits Raising Digital Cash Stay the CourseCharities favored by cryptophilanthropists are assessing the fallout from a scandal that reinforces skepticism about marrying the alternative currency and charitable giving.
Individual GivingWhen #GivingTuesday debuted in 2012, some people didn’t even know what a hashtag was. In the years since, the event asking donors to give online has grown in popularity so much it is now can’t-miss day for charities.
Government and LegislationAn influx of new lawmakers means the best chance for action on the charitable deduction and other issues nonprofits care about is during the next few weeks, when the old Congress will be moving through legislation, advocates say. But it’s also crucial to start educating new lawmakers who don’t understand how nonprofits and foundations work, they said.
OpinionRecent suggestions to reconsider the tax deduction for religion contributions fail to appreciate the unmeasurable but critical benefits these organizations bring to a divided society in which connecting with others is increasingly illusive.
Nonprofit News From Elsewhere Online
Last year, the conservative DonorsTrust donor-advised fund received about $850 million in two of “the largest ever donations to a politically connected group,” from undisclosed benefactors. The gifts made up most of the $1 billion-plus that the 501(c)(3) organization took in in 2021, according to tax records, dwarfing its $360 million haul in 2020. It also received “hundreds of millions” in stock, earning the also-undisclosed donor a tax deduction and a break on capital-gains taxes. DonorsTrust handed out about $192 million last year and entered 2022 with roughly $1.5 billion in assets. Among the recipients were the 85 Fund, founded by conservative legal activist Leonard Leo, which received $17.1 million; right-wing think tanks; funds to support right-leaning litigation; and conservative media projects. In a statement, DonorsTrust CEO Lawson Bader said the group’s donors “are ensuring a revenue stream to invest in nonprofits committed to healing and restoring our frayed social fabric.” But Michael Beckel, an executive with the good-government group Issue One, said, “Groups like DonorsTrust are becoming increasingly part of the equation of how money from special interests and wealthy Americans ends up in the coffers of dark money groups.” (Politico)
A research fellowship at the Massachusetts Institute of Technology is among the casualties of the FTX collapse and the downfall of its founder, Sam Bankman-Fried. The FTX Future Fund, a philanthropic arm of the now-bankrupt cryptocurrency exchange, had committed to support two to six MIT Media Lab Future Fellows per year beginning in fall 2023. They were to work on “ambitiously benevolent projects” including “developing new technologies to promote or safeguard well-being or directly improving the lives of current beings in ways anticipated to benefit future generations.” Fellows would have received tuition, stipends, research funding, and training in speaking and writing at a cost that an associate professor said could be “potentially $3 million.” No fellows had been chosen yet. Bankman-Fried is an alumnus of MIT. (Boston Globe)
More on Sam Bankman-Fried, the FTX Collapse, and Philanthropy
- Effective Altruism Gave Rise to Sam Bankman-Fried. Now It’s Facing a Moral Reckoning. (Vox)
- FTX Bankruptcy Is Bad News for the Charities That Crypto Mogul Sam Bankman-Fried Generously Supported (Conversation)
- Is the Effective Altruism Movement in Trouble? (Guardian)
- Sam Bankman-Fried and the Moral Emptiness of Effective Altruism (New Republic)
- William MacAskill, Effective Altruist and Elon Musk’s Useful Philosopher (New Statesman)
- Tom Brady’s Charity Is Good at Giving Money — to His Own For-Profit Company (Daily Beast)
- Obama to Announce Expansion of Young Leaders Program to U.S. (Associated Press)
- Jeff Bezos Plans to Give Away Most of His Fortune: Why ‘It’s a Big Deal,’ From a Philanthropy Expert (CNBC)
- Jeff Bezos Says He’ll Give Away the Majority of His Wealth. But Will He Sign the Giving Pledge? (Barron’s)
- Billionaire MacKenzie Scott Gives $23 Million to Chicago Schools (Black Wall Street Times)
- Durham, N.C., Public Schools Receive $18 Million Unsolicited Grant From Mackenzie Scott (Indy Week)
- A $52 Million Gift Will Allow Hunter College to Educate More Nurses (New York Times). Background from the Chronicle: Foundations and Big Donors Step In to Tackle the Nation’s Nurse Shortage
Year-End FundraisingCharities are trying to make the most of the event by lengthening its duration, teaming up with colleagues, and changing how they talk about giving.
FundraisingCompanies often used to rely on partnerships with big nonprofits, but today many of them typically allow customers to make gifts to any organization that has received charity status from the IRS.
Donors Added $73 Billion to Their Donor-Advised Funds Last Year. More Than $243 Billion Is Now Available to Flow to Charity.Some $46 billion flowed to working charities last year, and now more money is available even as the stock market has been on a rollercoaster and could dampen charitable giving.
MacKenzie Scott’s Donations Boosted Beneficiaries and Avoided the Pitfalls Some Feared, New Study SaysWorry that the gifts would lead other donors to pull back their support or that small groups wouldn’t be able to handle the money were largely unfounded. Plus: MacKenzie Scott’s Giving Total Is Now Over $13 Billion
OpinionLocal journalism is coming back to life in many communities thanks to increased giving from foundations and individual donors. But the success of these nonprofit newsrooms is far from guaranteed and will depend on continuing philanthropic support.