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I take this in the same vein as "Patagonia Founder Donates Company to Charity" and view it as a clever shell game.Mostly because Im cynical and have watched SV/

by ProAm 4y ago

I take this in the same vein as "Patagonia Founder Donates Company to Charity" and view it as a clever shell game.Mostly because Im cynical and have watched SV/VC game way too long to be healthy.

jrochkind1 4y ago
Oh, I think it's way more of a marketing scam than the Patagonia thing, which I think was kind of legit. This one doesn't even sound legit, even if they do exactly what they say... which is almost nothing. they aren't even really saying they'll do anything different with regard to profit. Patagonia, I think the founder and his heirs really have given up lots of profit they could have had, immediately, to dedicate it to other causes. (I think?) Nobody's given up anything here.
- mxkopy 4y ago
  The Patagonia thing was not legit at all according to Adam Hates Everything: https://www.youtube.com/watch?v=0Cu6EbELZ6I https://www.youtube.com/watch?v=0Cu6EbELZ6I EDIT by "not legit" I mean "not authentic"
  - mardifoufs 4y ago
    That's a usually pretty unreliable source. Especially since he doesn't seem to know a lot about fiscal/tax laws, in a country he doesn't even live in.
    - ProAm 4y ago
      https://fortune.com/2022/09/16/patagonia-founder-legal-tax-loophole/ https://fortune.com/2022/09/16/patagonia-founder-legal-tax-l...
  - jrochkind1 4y ago
    Thank you, I'm interested in this! If anyone has a good written text account critical of the Patagonia thing, I'm interested in that too; video isn't my preferred consumption format.
  - jefftk 4y ago
    Adam's argument seems to be: 1. If instead of donating the company he had left it to his kids he would have paid a lot in taxes (2:58) 2. He donated the voting shares of the company to a 501c4 that will remain controlled by his family and is allowed to lobby the government (4:10) 3. Normally when you make a donation you're giving up influence over what happens after that (4:25). 4. Other billionaires do other things (rest of video) But #3 isn't actually true: any of us can donate to a donor-advised fund, which will let us later choose what charity we want the money to go to. This is a good idea if you want to donate but haven't decided where to donate yet, or want to fund opportunities that aren't available yet. They did it through new organizations instead of opening an account at Fidelity, but it's the same thing other than the scale. I wouldn't call your donations "not legit" for using a DAF. Similarly, Adam sort of implies that #2 was tax-deductible, but donations to a 501c4 aren't. They had to pay tax on those shares based on their fair market value. Overall, I don't see how this makes the donation no longer "legit" or "authentic"? By making the donation he has given up almost all of the benefit of having that money: he can't spend it for the benefit of himself or his descendants anymore. It can't buy them yachts, fancy houses, etc. Instead, they have to use the money to benefit others, which is why we give a tax break for it.
    - ProAm 4y ago
      > Overall, I don't see how this makes the donation no longer "legit"? It not necessarily not legit, but he managed to keep a 3B business under family control and bypass paying around 700M in taxes in doing so. So the altruistic messaging that it was donated to save the world is mildly two-faced. There is nothing wrong with it, but the news stories did leave out a few of the details. I only bring this up because the message about OpenAI being structured in such a way doesn't pass the smell test knowing SV/VC and the key players involved. Again I admit Im cynical and can very well be wrong, it also doesn't affect my life so why do I care, but I bring it up for conversation on HN because I feel its fair to discuss it and the possibilities. [1] [1] https://fortune.com/2022/09/16/patagonia-founder-legal-tax-loophole/ https://fortune.com/2022/09/16/patagonia-founder-legal-tax-l...
    - jrochkind1 4y ago
      Yeah, ok. I mean I agree with his overall point that we shouldn't be like "oh hooray for the kind-hearted billionairres", there is something in it for them in how they have chosen to donate it of course. And they are still pretty darn wealthy already -- his kids probably still won't need to work, from existing already extracted profits. But that does seem a lot more real than the OpenAI shenanigans, they have actually done something, and they have given up being even more fabulously wealthy than they are already, even if they still have direction over how the money is used, including lobbying -- both for climate change, but ok, let's say also for things that benefit them. They've still done something, unlike the OpenAI thing which seems like giving up some future hypothetical probably wouldn't happen anyway profits, and making no difference at all for the foreseeable future -- no difference but PR advantage.
gen220 4y ago
If you want to develop a healthy counterpoint to that cynicism, you should consider reading more about Patagonia. Speaking as somebody who's generally cynical about these moves as well. I'm less read-up on OpenAI. It does feel to me like they've diluted the original non-profit/openness mission to the point of it being an interesting historical quirk, rather than an ongoing, guiding focus.
- ProAm 4y ago
  > you should consider reading more about Patagonia I'd be open to reading more. I think they are largely a good company but feel like this move was more of a tax dodge and to ensure generational wealth than for altruism. But I am open to being wrong about it. But everyone involved in OpenAI doesn't give me warm and fuzzy feelings at all. I admit it's largely cynicism until I know more. But there isnt enough time in the day to do real research on every subject and topic that comes up on HN and every other discussion board I participate in, so it's difficult to be knowledgeable about everything and still maintain a life. And even if I was read up on OpenAI, I have zero ability to do anything about it, and it likely won't affect my life in a meaningful way as well (and this is true about most everything I read about to not single out OpenAI as not being worth my time). So it is a little pointless or more of a time waste I admit.
  - ethanbond 4y ago
    Company with decades of going way, way out of norms to operate as an ethical organization at virtually every level does an additional virtuous task: oh ya that’s a tax dodge
    - ProAm 4y ago
      It is, Im not saying they are 100% evil like some companies we discuss on HN. But this was a tax dodge. [1] [1] https://fortune.com/2022/09/16/patagonia-founder-legal-tax-loophole/ https://fortune.com/2022/09/16/patagonia-founder-legal-tax-l...
      - 4y ago
unicornmama 4y ago
Right, like all those cryptocurrency companies structured as non-profit foundations in Switzerland.

by ProAm 4y ago

I take this in the same vein as "Patagonia Founder Donates Company to Charity" and view it as a clever shell game.Mostly because Im cynical and have watched SV/VC game way too long to be healthy.

jrochkind1 4y ago

Oh, I think it's way more of a marketing scam than the Patagonia thing, which I think was kind of legit. This one doesn't even sound legit, even if they do exactly what they say... which is almost nothing. they aren't even really saying they'll do anything different with regard to profit. Patagonia, I think the founder and his heirs really have given up lots of profit they could have had, immediately, to dedicate it to other causes. (I think?) Nobody's given up anything here.

mxkopy 4y ago
The Patagonia thing was not legit at all according to Adam Hates Everything: https://www.youtube.com/watch?v=0Cu6EbELZ6I https://www.youtube.com/watch?v=0Cu6EbELZ6I EDIT by "not legit" I mean "not authentic"
- mardifoufs 4y ago
  That's a usually pretty unreliable source. Especially since he doesn't seem to know a lot about fiscal/tax laws, in a country he doesn't even live in.
  - ProAm 4y ago
    https://fortune.com/2022/09/16/patagonia-founder-legal-tax-loophole/ https://fortune.com/2022/09/16/patagonia-founder-legal-tax-l...
- jrochkind1 4y ago
  Thank you, I'm interested in this! If anyone has a good written text account critical of the Patagonia thing, I'm interested in that too; video isn't my preferred consumption format.
- jefftk 4y ago
  Adam's argument seems to be: 1. If instead of donating the company he had left it to his kids he would have paid a lot in taxes (2:58) 2. He donated the voting shares of the company to a 501c4 that will remain controlled by his family and is allowed to lobby the government (4:10) 3. Normally when you make a donation you're giving up influence over what happens after that (4:25). 4. Other billionaires do other things (rest of video) But #3 isn't actually true: any of us can donate to a donor-advised fund, which will let us later choose what charity we want the money to go to. This is a good idea if you want to donate but haven't decided where to donate yet, or want to fund opportunities that aren't available yet. They did it through new organizations instead of opening an account at Fidelity, but it's the same thing other than the scale. I wouldn't call your donations "not legit" for using a DAF. Similarly, Adam sort of implies that #2 was tax-deductible, but donations to a 501c4 aren't. They had to pay tax on those shares based on their fair market value. Overall, I don't see how this makes the donation no longer "legit" or "authentic"? By making the donation he has given up almost all of the benefit of having that money: he can't spend it for the benefit of himself or his descendants anymore. It can't buy them yachts, fancy houses, etc. Instead, they have to use the money to benefit others, which is why we give a tax break for it.
  - ProAm 4y ago
    > Overall, I don't see how this makes the donation no longer "legit"? It not necessarily not legit, but he managed to keep a 3B business under family control and bypass paying around 700M in taxes in doing so. So the altruistic messaging that it was donated to save the world is mildly two-faced. There is nothing wrong with it, but the news stories did leave out a few of the details. I only bring this up because the message about OpenAI being structured in such a way doesn't pass the smell test knowing SV/VC and the key players involved. Again I admit Im cynical and can very well be wrong, it also doesn't affect my life so why do I care, but I bring it up for conversation on HN because I feel its fair to discuss it and the possibilities. [1] [1] https://fortune.com/2022/09/16/patagonia-founder-legal-tax-loophole/ https://fortune.com/2022/09/16/patagonia-founder-legal-tax-l...
  - jrochkind1 4y ago
    Yeah, ok. I mean I agree with his overall point that we shouldn't be like "oh hooray for the kind-hearted billionairres", there is something in it for them in how they have chosen to donate it of course. And they are still pretty darn wealthy already -- his kids probably still won't need to work, from existing already extracted profits. But that does seem a lot more real than the OpenAI shenanigans, they have actually done something, and they have given up being even more fabulously wealthy than they are already, even if they still have direction over how the money is used, including lobbying -- both for climate change, but ok, let's say also for things that benefit them. They've still done something, unlike the OpenAI thing which seems like giving up some future hypothetical probably wouldn't happen anyway profits, and making no difference at all for the foreseeable future -- no difference but PR advantage.

gen220 4y ago

If you want to develop a healthy counterpoint to that cynicism, you should consider reading more about Patagonia. Speaking as somebody who's generally cynical about these moves as well. I'm less read-up on OpenAI. It does feel to me like they've diluted the original non-profit/openness mission to the point of it being an interesting historical quirk, rather than an ongoing, guiding focus.

ProAm 4y ago
> you should consider reading more about Patagonia I'd be open to reading more. I think they are largely a good company but feel like this move was more of a tax dodge and to ensure generational wealth than for altruism. But I am open to being wrong about it. But everyone involved in OpenAI doesn't give me warm and fuzzy feelings at all. I admit it's largely cynicism until I know more. But there isnt enough time in the day to do real research on every subject and topic that comes up on HN and every other discussion board I participate in, so it's difficult to be knowledgeable about everything and still maintain a life. And even if I was read up on OpenAI, I have zero ability to do anything about it, and it likely won't affect my life in a meaningful way as well (and this is true about most everything I read about to not single out OpenAI as not being worth my time). So it is a little pointless or more of a time waste I admit.
- ethanbond 4y ago
  Company with decades of going way, way out of norms to operate as an ethical organization at virtually every level does an additional virtuous task: oh ya that’s a tax dodge
  - ProAm 4y ago
    It is, Im not saying they are 100% evil like some companies we discuss on HN. But this was a tax dodge. [1] [1] https://fortune.com/2022/09/16/patagonia-founder-legal-tax-loophole/ https://fortune.com/2022/09/16/patagonia-founder-legal-tax-l...
    - 4y ago

unicornmama 4y ago

Right, like all those cryptocurrency companies structured as non-profit foundations in Switzerland.