Transparency Troubles: How Altman-Linked Nonprofits Are Withholding Key Information

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Nonprofits Supported by OpenAI Have Retracted Their Commitments to Openness

A nonprofit financed by Sam Altman, dedicated to examining the impact of providing monthly payments of as much as $1,000 to families with lower incomes in the United States, professes a commitment to openness in its activities. "Our goal is to broadly disseminate data, results, and knowledge," states OpenResearch on its online platform, characterizing its endeavors as serving the "public interest."

Similar to a couple of other groups associated with Altman, such as OpenAI and UBI Charitable, OpenResearch has chosen not to publicly share details about its financial status and management structure. Despite being operational for several years and regularly submitting reports to the tax authorities in the US, all these organizations have maintained a stance of making their financial records, foundational documents, and policies on conflicts of interest available for review only if someone requests it. It's still not known if there were any takers for this offer during those times.

Upon WIRED's request for these documents, representatives from OpenAI in December and OpenResearch and UBI Charitable in the current month responded by saying their disclosure policies have been updated, and they would not be releasing the latest documents. Sourav Das, a representative for OpenResearch, provided only an old and potentially outdated conflict-of-interest policy without a date, under its previous name. Meanwhile, UBI Charitable, an organization that backs initiatives providing unconditional cash gifts, failed to provide any documents.

The two groups assert that their previous declarations on IRS documents were intended to highlight their compliance with legal obligations, specifically regarding the sharing of necessary documentation like their tax filings and initial applications for tax exemption status. However, it is important to note that the form already includes a distinct query concerning the availability of legally required disclosures.

A representative of UBI Charitable, using an email account named “UBI Admin” and not signing the email, did not reply to further inquiries regarding their identity or provide more details on why the requested documents were not furnished. Kayla Wood, a spokesperson for OpenAI, stated that Altman does not hold any official position within UBI Charitable.

In the US, it's rare for nonprofits to disclose documents that aren't mandated by law, and changing policies carries no consequences. However, the decision by OpenResearch and UBI Charitable to conceal their activities is especially noteworthy following allegations from Altman's colleagues on the OpenAI board last year, who criticized him for not being transparent.

During an interview on a podcast last month, Helen Toner, a recently resigned member of the board, accused Sam Altman, CEO of OpenAI, of not revealing his initiation of ChatGPT and his ownership of OpenAI's longstanding investment fund in startups, an ownership he only relinquished in March. Furthermore, Toner charged Altman with giving misleading details about how the organization manages to prevent potential harm arising from its projects. In a subsequent article for the Economist, Toner, alongside former board member Tasha McCauley, expressed their view that Altman compromised the board's ability to oversee critical decisions and adherence to safety measures, and they reported that high-ranking officials within the organization characterized his leadership as fostering an environment where dishonesty was prevalent. Ex-staffers have voiced that their concerns regarding safety were systematically suppressed. Both Toner and Altman refrained from commenting on this matter, while McCauley did not reply to inquiries for her input.

Bret Taylor, the newly appointed chairman of OpenAI's board, has stated that the previous board members' worries were unrelated to the company's financial health or communications with investors. He also mentioned that there is a strong internal backing for Altman.

By Anna Merlan

Authored by Simon

Authored by Jaina Grey

Authored by Kyle MacNeill

Elon Musk, claiming to have invested more than $40 million in OpenAI's establishment and maintenance, pursued legal action against Sam Altman in a California state court. Musk's lawsuit accused Altman of straying from OpenAI's foundational goal of advancing artificial intelligence for the good of humanity. Musk unexpectedly dropped the lawsuit on June 11, offering no reasons for his decision.

OpenAI dismissed Musk’s allegations as baseless. A probe they initiated revealed a decline in the relationship between Altman and the board members, yet concluded it wasn’t severe enough to justify his dismissal, as per a synopsis OpenAI made public, though they chose not to disclose the entire report.

The supposed issues with Altman's conduct might not be halted, revealed, or corrected simply through openness regarding a company's financials or regulations. Nonetheless, making such information public could boost public trust and offer clear insights in the event of any forthcoming disagreements. It would illuminate the intended procedures for evaluating prospective collaborations with other entities linked to Altman, the mechanism for removing leaders, and the specifics of financial transactions in greater detail than is typically accessible.

Unconditional Financial Support

Nonprofits associated with OpenAI are channeling millions of dollars, some of which comes directly from Altman's own earnings from startup investments, into addressing a crucial issue for the future: Finding ways to economically empower individuals in an era where their employment is threatened by advancements in AI technology.

Altman initiated what is now known as OpenResearch, originally established as YC Research, a branch of Y Combinator, the startup incubator he was leading back in 2015. He announced a contribution of $10 million to the not-for-profit organization and designated its inaugural project to be a five-year investigation in the United States into the concept of universal basic income, which involves providing individuals with a regular, unconditional sum of money. "I strongly believe that, eventually, as advancements in technology continue to phase out conventional jobs and generate significant wealth, we will witness some form of this on a nationwide level," Altman expressed in 2016.

He was curious about how individuals utilized the additional money, their emotional responses, and the impact on society as a whole. In 2016, Elizabeth Rhodes, who had recently earned her doctorate in social work and political science, joined as the research director. She initiated a pilot project in Oakland, California, separated the organization from Y Combinator, and succeeded in securing approximately $25 million in donations by 2022. The extensive research, conducted over three years in two unnamed US states, has recently concluded. The findings are anticipated to be released later this year.

Rhodes informed Fortune that Altman, who presides over OpenResearch's board, has granted the entity complete autonomy. Nevertheless, his involvement extends beyond mere oversight. As per the latest reports to the IRS, aiming to maintain its tax-exempt status, OpenResearch owed Altman a sum of $14.5 million at the close of 2022, a debt originating from around $14 million in personal loans he extended to the organization. Additionally, OpenAI has supported OpenResearch with a minimum contribution of $75,000 in the form of a grant.

According to its tax documents covering the years from 2016 to 2022, the organization claimed it would disclose documents it wasn't compelled to release. Das, the representative, mentioned that the 2023 submission will make it clear that OpenResearch is "willing to offer information that must be made public if it cannot be found" on official sites where the IRS and the California state government post mandatory reports.

Authored by Anna Merlan

Authored by Simon

Authored by Jaina Grey

Authored by Kyle MacNeill

No database requirement exists, nor do they typically hold current versions of the documents that UBI Charitable and OpenResearch previously claimed to offer.

The initial conflict-of-interest policy from YC Research that Das disclosed stipulates that company insiders must disclose transactions where their neutrality might be doubted, allowing the board to determine the next steps.

Das mentions that although the policy could have undergone modifications following OpenResearch's policy updates (which includes the period when its name was switched from YC Research), the fundamental aspects have stayed consistent.

Without an Online Presence

Inaugurated in 2020 with a generous donation of $10 million from OpenAI, as initially disclosed by TechCrunch the previous year, UBI Charitable has made it its mission, as per its official filings, to utilize the more than $31 million it amassed by the conclusion of 2022. Its primary objective is to fund efforts that mitigate the adverse societal effects brought on by emerging technologies, ensuring inclusivity. Significant contributions have been made to CitySquare in Dallas and Heartland Alliance in Chicago, organizations dedicated to implementing various initiatives aimed at combating poverty.

UBI Charitable seems to lack an online presence, as it doesn't have an official website. However, it is linked to a physical location in San Francisco, which it shares with OpenResearch and OpenAI. Moreover, employees from OpenAI have been mentioned in the official documents submitted by UBI Charitable to the authorities. In its three Form 990 submissions since its inception, it has consistently noted that its governance materials, financial records, and policies regarding conflicts of interest are accessible to those who request them.

Rick Cohen, who holds the position of chief operating and communications officer at the National Council of Nonprofits, a group dedicated to advocacy, notes that the phrase “available upon request” is a common response used by accounting firms. The San Francisco-based accounting firm Fontanello Duffield & Otake, which provides services to OpenAI, OpenResearch, and UBI Charitable, did not reply to an inquiry for a statement.

Cohen mentions that due to misunderstandings or inadequate supervision, the default response regarding the accessibility of records might be given, implying their availability, "even when the organization had no plans to release them."

The inclusion of the disclosure question in the Form 990 was initiated in 2008 as a strategy to assist the expanding and intricate domain of nonprofit organizations in demonstrating their commitment to governance excellence, as suggested by the IRS, according to Kevin Doyle, the senior director of finance and accountability at Charity Navigator. Charity Navigator assesses nonprofit organizations to aid contributors in making informed decisions about their donations. Doyle mentions, "Providing such clarity regarding operations serves as a signal to donors that their contributions will be managed wisely."

OpenResearch appeals for financial contributions through its online platform, while UBI Charitable revealed in its latest tax submission to the IRS that it garnered upwards of $27 million in public contributions. According to Doyle, Charity Navigator's figures indicate that organizations receiving higher ratings, especially in terms of openness, often see a greater influx of donations.

It's quite common for entities to distribute various documents widely. According to Charity Navigator, the majority of the nearly 900 biggest nonprofits in the US that depend on donations from individuals make their financial reports available on their websites. However, the monitoring of the publication of bylaws or policies on conflicts of interest is not within their scope.

Charity Navigator makes its audited financial reports available to the public, along with more than eight unique policies it upholds. These policies cover areas such as document retention periods, handling of whistleblower reports, and regulations regarding the acceptance of gifts by staff members. “We're open to scrutiny from donors who wish to understand our operations, rather than just asking for donations without welcoming inquiries,” says Doyle.

Cohen from the National Council of Nonprofits warns that sharing too much information might lead to risks. For instance, making a disaster-recovery plan public could potentially guide computer hackers. He further mentions that having a written policy doesn't guarantee its implementation. However, understanding what organizations are expected to do to assess a potential conflict of interest can enhance public accountability. Moreover, if AI turns out to be as impactful as Altman predicts, such close examination might be justified.

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