Nonprofits and political influence: it's not about golf

 

Screenshot from Candid.org

You know that the PGA Tour is a nonprofit, don't you?*

I'm also sure you've heard the news that the Saudi government (via its public investment fund, with $600+ billion in assets) launched a new tour (called LIV) which has announced a merger with the PGA Tour. Details are being worked out (and investigated.)

Why does this deal stink so much? Sport washing by a country with a dismal human rights record is pretty obvious - especially as the country is unabashadly trying to buy soccer talent also. Certainly, families of people who were killed on September 11, 2001 are disgusted (my own included). There's a lot of media on this story about the players, the fans, the public, the sport-washing, human rights, and, of course, Trump Sr., Kushner Jr., and Mnuchin. I'll let you read all that elsewhere. 

Let's go to back to the role of the Tour as a nonprofit organization. If you check on Candid.org (screenshot above) you'll find the PGA Tour with its $4 billion in assets as well as about a dozen other PGA-named nonprofits, including a 501 (c) (3) foundation with$10,000 in assets and an organization for and by the wives of PGA players. 

This comes along as the United States has lost control of our system for financing campaigns and the regulatory body in charge is . Money flows from individuals and corporations to nonprofits, where the names of the donors are "washed off" and the money is passed through to politically-active affiliated organizations. As I predicted in 2010, when the Citizens United decision was handed down, large swaths of nonprofit organizations have become money laundering mechanisms for politics. This structure - foreign government "investment" in a nonprofit that holds extravagent and expensive events at properties owned by an indicted former president running again for office - looks and smells like the making of a money washing scandal from here, before the deal is even done. 

The new entity ("NewCo" to be born from PGA + LIV) will be a commercial enterprise. Owned by the nonprofit PGA. I'm not a lawyer but I can read these signs - that means no conversion foundation or tax payback from the nonprofit. Massive commercial investments plus a nonprofit structure that will enable anonymous financial flows. A set of nesting doll organizations ripe for funding abuse by anyone, anywhere interested in political influence, but particularly convenient for foreign governments. Given the timing, expect big concerns about funding and influence in the 2024 Presidential election.

Given the cast of characters involved, I'll say it out loud now: this deal looks like the biggest money laundering machine yet to be carved out of the nonprofit tax code. I'll put my bet down now - If the deal goes through, this will become a story of campaign finance violations. And we're watching it being put together right in front of us.

*I'm sure you remember that the NFL was a nonprofit until 2015 - when it reorganized as a commercial entity. Happens under 501 (c) (6) of IRS Code.

A predictable problem with predictions

Photo from Possessed Photography on Unsplash

Dateline: May, 2027

Location: Pretty much anywhere on earth

“Miriam was one of those rare people who could remember reading about her cause of death                                                                         before it happened. It wasn’t the reading that was rare - the warning had been printed in The New York Times, page A9. It also wasn’t the dying that was rare - hundreds of thousands of people would die of the same cause. It was the remembering that was rare.”

Yes, that’s fiction. I just made it up. Because I just read this story in today’s New York Times: record heat between now and 2027 due to climate catastrophe and El Niño weather patterns. It’s likely that one of the years between now and then will cross the mark of 1.5 degree celsius hotter than 19th Century average. 

So, there’s the science. The article goes on to do the work - “This will have far-reaching repercussions for health, food, water management and the environment.” 

Keep going - do the rest of the work: Those far-reaching repercussions mean fires, droughts, floods, food shortages, hunger, water wars (term used deliberately). These things mean death. I made up Miriam and I interpolated from the global recent past to get to “hundreds of thousands of deaths.” (We’ve passed the tens of thousands marker). Here’s what’s happening now - four years after devastating 2019 Australian summer. 

If you have children starting elementary school this Fall, 2027 will be here before they go on to middle school. If your child was accepted to a four-year college this Spring, they’ve just been welcomed in to the class of 2027. If you’re writing a five year (?) strategic plan for your foundation/nonprofit you’re planning this precise timeline of these disasters - how are you fitting them into those plans?

I wrote a wee bit of fiction from this news. (I’ve done some other things, actual prep. Which given the global nature of the prediction is challenging) How do we respond to predictions like this - Action? Stasis? What are you doing? What can we do together? 

Transitional philanthropy

We're in an incredible moment. After decades of research and advocacy and warnings we are now living through the weather and natural disaster effects of climate collapse. We're also more than a few meters down the pitch of living with pervasive artificial intelligent systems. 

Ways of life from agriculture to writing, architecture to transportation are transitioning. The practices for adapting to more sustainable, more energy efficient, lower impact methodologies are being refined, shared, modeled and implemented at scale in some places. 

 And then there's this (which I reprinted with permission in the Blueprint 2022)

https://designjustice.org/news-1/2021/philanthropy-workshop

My question is are there examples of philanthropy that are clearly rooted in a sense of transition from one state to another? There are funds named for transitions - or at least there is the Just Transitions Fund - but are there others? If there are, what defines them? What are they transitioning to? Where are the experiments, innovations, regulatory reconsiderations, imaginaries, and alternatives in philanthropy and civil society that make use of (but don't venerate) our current capacities (for almost instant global communication, for example) and that pursue a vision of human thriving on a climate-damaged planet? How would such philanthropy work, what would it look like, what would it do differently from now, and how would it change itself in order to justify its continued existence? 

That last question is not meant to be rhetorical. The time frame for irreversible climate collapse is now about the length of time an American child spends in elementary school or just barely longer than the term of an elected Senator. The time frame for harms from badly designed AI to manifest has passed, it's already underway and we're well down that path.

We're on the path to both realities. We can see them up ahead and are already experiencing the harms we know will grow. It's illogical to do things the way they've been done during a transitional moment, unless your goal is to maintain the status quo. I've yet to meet the foundation or philanthropist who (explicitly) states such as their goal so this should be a time of tremendous experimentation and hopeful innovation. I'd love to see it - please point me in the right direction.

Deepfake nonprofits

                                                                                    Eileen Pan on Unsplash

There's been a lot of writing over the last three decades about the blurring of boundaries between nonprofits, governments, and markets. 

These analyses usually focus on the use of profit-generating tactics by nonprofits (blurring them with market institutions), the growing involvement of nonprofits in public policy (usually discussed either in terms of dark money or organizations with multiple tax statuses such as c3s and c4s), and the use by governments of philanthropy-style incentives (e.g. prizes or matching grants) or direct government involvement in supporting specific companies the way investors do. The whole social enterprise movement is an example of blurring lines between philanthropy and business.

In this context, this story of a government "watchdog" group is fascinating. The article describes how every inquiry into the group by a reporter is met with a different classification claim. Starting in 2021, it claimed to be a 501 (c) 3 nonprofit, then it removed the 501 (c) 3 part, then in 2022 it referred to itself in a lawsuit as “an unincorporated association of retired and former public servants and concerned citizens that is dedicated to restoring public trust in government.” And then, in January 2023, it labeled itself simply “a collection of individuals.”

Needless to say, whatever it is, it has not been filing any paperwork or tax documents that might explain who is involved and where the money is coming from. 

Just in time for the 2024 U.S. Presidential election, which we can expect to be defined by AI generated information warfare online, we should also be on the lookout for more of these "deepfaked" IRL organizations.