OpenAI-Backed Nonprofits Have Gone Back on Their Transparency Pledges

A Sam Altman–funded nonprofit studying the effects of giving monthly checks of up to $1,000 to lower-income households in the US espouses transparency in its operations. “We aim to share data, findings, and insights widely,” OpenResearch says on its website, which describes its work as a “public good.”

But like at least two other Altman-linked organizations—OpenAI and UBI Charitable—OpenResearch has decided to withhold information about its finances and governance. In several years of filings to US tax authorities since their founding, each of the organizations has answered a question about their voluntary disclosure of financial statements, governing documents, and conflict-of-interest policies by stating that the public can review them upon request. It remains unclear whether anyone took them up on the offer in those years.

When WIRED requested those records, spokespeople for OpenAI in December and OpenResearch and UBI Charitable this month said their policies had changed, and up-to-date documents would not be disclosed. OpenResearch spokesperson Sourav Das only shared an undated and likely outdated conflict-of-interest policy bearing its old name, while UBI Charitable, which supports programs that offer unconditional cash transfers, didn’t turn over any records.

Both organizations claim their past statements on IRS forms were meant to underscore that they share documents they are required to under law, such as the filings themselves and their original applications to secure an exemption from paying taxes. But there’s already a wholly separate question on the form about access to documents that must be legally disclosed.

A UBI Charitable spokesperson responding with an unsigned email from an account titled “UBI Admin” didn’t respond to follow-up questions about their identity and additional explanation on why records hadn’t been provided. OpenAI spokesperson Kayla Wood says Altman has no formal role at UBI Charitable.

Elon Musk, who says he contributed over $40 million to help launch and sustain OpenAI, had seized on accusations about Altman to sue him in California state court for allegedly deviating from OpenAI’s original mission to develop AI to benefit humanity. Musk withdrew the lawsuit on June 11, without explanation.

OpenAI had called Musk’s claims meritless. An investigation it commissioned found “a breakdown in trust” between Altman and board members but not sufficient as to require his removal from power, according to a summary that OpenAI released while declining to share the full report.

The alleged concerns about Altman’s behavior wouldn’t necessarily be stopped, exposed, or rectified by transparency into an organization’s finances or rules. Their disclosure, however, could inspire greater public confidence and provide clarity during any future disputes. They could show the process meant to be followed to vet potential partnerships with other Altman-connected entities, how leadership can be ousted, and where money is flowing in more granular detail than generally otherwise available.

No-Strings Cash

The OpenAI-linked nonprofits are putting millions of dollars, including in part from Altman’s personal fortune earned through investing in startups, toward a potentially pivotal question in the decades to come: How to uplift people economically as technologies such as AI come for their jobs.

Altman started what became OpenResearch as YC Research, an offshoot of Y Combinator, the startup accelerator he was running at the time in 2015. He said he would be donating $10 million to the nonprofit and set its first cause as funding a five-year study in the US on basic income, the concept of sending people a steady stipend with no strings attached. “I’m fairly confident that at some point in the future, as technology continues to eliminate traditional jobs and massive new wealth gets created, we’re going to see some version of this at a national scale,” Altman wrote in 2016.

He wanted to understand what people did with the extra cash, how they felt, and what effect this had on the rest of society. Elizabeth Rhodes, a then-recent doctoral graduate in social work and political science, came on as research director in 2016, started a pilot project in Oakland, California, dissociated the organization from Y Combinator, and went on to raise a total of about $25 million in contributions through 2022. The full-scale study, which ended up lasting three years across two US states (undisclosed so far), just wrapped. Results are expected later this year.

Altman chairs OpenResearch’s board but has provided “total independence” to the organization, Rhodes recently told Fortune. Yet he is entangled in other ways. OpenResearch was $14.5 million in debt to Altman as of the end of 2022 to repay about $14 million he had personally loaned the organization, according to the organization’s filings to the IRS to stay exempt from paying taxes. OpenAI also contributed at least $75,000 in a grant to OpenResearch.

Its IRS filings, which span 2016 through 2022, maintained that the nonprofit would release records that it’s not under obligation to do so. Das, the spokesperson, says the 2023 filing will clarify that OpenResearch is “happy to provide information required to be shared publicly if it is not available” on websites where the IRS and state of California publish required disclosures.

Neither database mandates nor generally contains up-to-date versions of the records that UBI Charitable and OpenResearch had said they provided in the past.

The original YC Research conflict-of-interest policy that Das did share calls for company insiders to be upfront about transactions in which their impartiality could be questioned and for the board to decide how to proceed.

Das says the policy “may have been amended since OpenResearch’s policies changed (including when the name was changed from YC Research), but the core elements remain the same.”

No Website

UBI Charitable launched in 2020 with $10 million donated from OpenAI, as first reported by TechCrunch last year. UBI Charitable’s aim, according to its government filings, is putting the over $31 million it received by the end of 2022 to support initiatives that try to offset “the societal impacts” of new technologies and ensure no one is left behind. It has donated largely to CitySquare in Dallas and Heartland Alliance in Chicago, both of which work on a range of projects to fight poverty.

UBI Charitable doesn’t appear to have a website but shares a San Francisco address with OpenResearch and OpenAI, and OpenAI staff have been listed on UBI Charitable’s government paperwork. Its three Form 990 filings since launching all state that records including governing documents, financial statements, and a conflict-of-interest policy were available upon request.

Rick Cohen, chief operating and communications officer for National Council of Nonprofits, an advocacy group, says “available upon request” is a standard answer plugged in by accounting firms. OpenAI, OpenResearch, and UBI Charitable have always shared the same San Francisco accounting firm, Fontanello Duffield & Otake, which didn’t respond to a request for comment.

Miscommunication or poor oversight could lead to the standard answer about access to records getting submitted, “even if the organization wasn’t intending to make them available,” Cohen says.

The disclosure question ended up on what’s known as the Form 990 as part of an effort in 2008 to help the increasingly complex world of nonprofits showcase their adherence to governance best practices, at least as implied by the IRS, says Kevin Doyle, senior director of finance and accountability at Charity Navigator, which evaluates nonprofits to help guide donors’ giving decisions. “Having that sort of transparency story is a way to indicate to donors that their money is going to be used responsibly,” Doyle says.

OpenResearch solicits donations on its website, and UBI Charitable stated on its most recent IRS filing that it had received over $27 million in public support. Doyle says Charity Navigator’s data show donations tend to flow to organizations it rates higher, with transparency among the measured factors.

It’s certainly not unheard of for organizations to share a wide range of records. Charity Navigator has found that most of the roughly 900 largest US nonprofits reliant on individual donors publish financial statements on their websites. It doesn’t track disclosure of bylaws or conflict-of-interest policies.

Charity Navigator publishes its own audited financial statements and at least eight nonstandard policies it maintains, including ones on how long it retains documents, how it treats whistleblower complaints, and which gifts staff can accept. “Donors can look into what we’re doing and make their own judgment rather than us operating as a black box, saying, ‘Please give us money, but don’t ask any questions,’” Doyle says.

Cohen of the National Council of Nonprofits cautions that over-disclosure could create vulnerabilities. Posting a disaster-recovery plan, for example, could offer a roadmap to computer hackers. He adds that just because organizations have a policy on paper doesn’t mean they follow it. But knowing what they were supposed to do to evaluate a potential conflict of interest could still allow for more public accountability than otherwise possible, and if AI could be as consequential as Altman envisions, the scrutiny may very well be needed.

Source : Wired