Prager U: Financial Considerations

PragerU is classified by the IRS as a ‘501 (c) (3)’ organization, which means that it is exempt from paying federal income taxes. Many states also grant 501(c)(3) non-profits various additional tax exemptions. Contributions made to it are also tax deductible to the donor. As a result of these characteristics, 501(c) (3)s are the most popular classification of charitable organizations. Any company under this codification is either prohibited or significantly circumscribed from various types of political and lobbying activities. Violation of relevant IRS regulations could lead to loss of tax exempt status and possibly culminate in an organization’s collapse. Based on the theory that such charities are performing a public service in exchange for a reduced tax burden, their tax return (Form 990) is made publicly available to encourage transparency.

According to a hit piece by the ‘Rewire’ website, a substantial portion of PragerU’s funding has come from a few high net worth individuals through various grant giving foundations. The 990s for these organizations support this assertion. For example, in fiscal year 2015, the Thirteen foundation donated one million dollars to PragerU. This accounted for about 27% of total receipts of $3,609,499. In 2013, the same organization gave $250,000, or about 20% of total revenue of $1,198,251. Other foundations funded by the same family gave even more monies, upping that percentage. These numbers affirm the fact that having a few wealthy donors can allow a relatively new upstart to have an outsized influence in its space. A detailed study of how and why wealthy families give to various institutions should be undertaken as an important contribution to our fundraising efforts. Appeals should be made to any well-connected group if conceivable that they would be receptive to the ideas. This outreach should also include ‘public-conscious’ for-profit businesses who may be responsive to a pro-American or educational effort.

Very detailed news articles written about the funding for right-wing organizations clearly demonstrate that the Left understands the importance of knowing where the money comes from to spread conservative ideas. If it does not already exist, the right must also develop a detailed investigative arm that maintains intelligence about the cash flows of left-wing causes. Attention must also be paid to governmental money flows as these can also be a major factor in advancing their agenda. For instance, insofar as universities propagate liberal views, an analysis of the impact of this fact on the broader society should be investigated. As the libertarian Koch family found out the hard way, donating to political activity or any cause with a well-organized opposition, comes with certain negative consequences. It is in our interest to protect the identity, integrity, reputation and business interests of those who support us and simultaneously expose, and attack when necessary, those of our opponents.

Raising money from the public will always be an ongoing part of running non-profit mass market companies. CEO Marissa Streit has written a compelling article making the case to stop giving to one’s alma-mater. Some firms offer matching donations for approved charities through their corporate matching programs. Mr. Prager has offered an incentive to medium sized pledges by flying to anywhere within the continental United States to have dinner with anyone giving $35,000 or more. Selling merchandise may not be as significant a source of funds but will allow for a degree of community and brand loyalty. Scrutinizing the financial statements and news stories of other related media companies may provide further insight into avenues not yet tapped. Technology has allowed innovative ideas to proliferate in the arena of third-party fundraising efforts.

Non-financial methods of gaining influence should be systematically utilized by supporters. In this vein, sharing videos on social media increases ideological impact. Subscribing, ‘liking’, commenting and rating the content improves Search Engine Optimization and advertising revenue. Favorable reviews of the smartphone app can encourage users to download it faster than competitors. Having articles written by open-minded reporters are yet another way to ensure that references to Prager U come up in the first few pages of search results. Using https://smile.amazon.com/ is a further technique to donate money to a non-profit with no explicit financial outlay. Smile.amazon.com allows shoppers to designate a charity of their choice at no additional cost and donates 0.5% of every purchase to that cause. All other features of the popular Amazon.com website are identical.

Whichever methods have the highest return on investment and are sustainable and growing should have particular attention paid to them. A non-profit should also strive to make maximum use of the resources available to it, to help persuade other investors to shift their own focus towards us. An efficiently run organization should also be highly rated by charity watch-dog groups and publications. Strategy hog’s objective in studying these matters is to institutionalize this information and to spread ‘best-practices’ throughout right-leaning organizations that would benefit from such knowledge.

 

*Please Note: This blog has no affiliation with Prager U or any of its related organizations.*

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