Community IT Innovators Nonprofit Technology Topics

Nonprofit AI: Public AI Fund Idea, Data Center Nonprofit Bribes

• Community IT Innovators • Season 7 • Episode 47

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Carolyn Woodard covers two developing stories this week that together raise a bigger question for nonprofits: as AI infrastructure money floods into communities and philanthropic channels, is your organization ready to navigate it?

First, Senator Bernie Sanders has introduced the American AI Sovereign Wealth Fund Act, which would require large AI companies to transfer half their stock to a federally managed public fund, with annual payments going directly to every American. The idea draws on a broader argument gaining traction across the political spectrum: that AI was built on humanity's collective output, and the public deserves a share of what it produces.

The second story hits closer to home — literally. What would you do with a one time gift that was more than your annual operating budget? Would you worry about the strings attached? In Fauquier County, Virginia, a data center developer called Gigaland has announced $10 million in grants for 10 local nonprofits, contingent on receiving a building permit. Some nonprofits have said yes, some have said no, and most are waiting to see what happens. This tactic may be coming to a community near you soon. What can citizen groups do locally when up against data center money? 

This episode also zooms out to look at how Meta, Google, and Amazon run ongoing community grant programs in their data center host communities, and how citizen coalitions in places like Lancaster, Pennsylvania have negotiated binding community benefit agreements instead of accepting gift-bribes.

This episode covers:

  • The Sanders bill and the question of who benefits from AI-built-on-public-data.
  • How data center developers are using advance grant offers to nonprofits as a goodwill strategy before permits are approved.
  • The difference between voluntary corporate giving and binding community benefit agreements, and what nonprofits and citizen coalitions can do to push for the latter.
  • Four questions every nonprofit board should think through before a windfall lands: donor displacement, reputational risk, sustainability, and your ability to advocate freely.
  • Why having clear organizational values and a gift acceptance policy in place before the money arrives is the most important preparation you can make.

Resources Mentioned:

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Carolyn Woodard

Hello and welcome to the Community IT Innovators Midweek Nonprofit AI check-in. My name is Carolyn Woodard. I am the outreach director for Community IT. I'm so interested and intrigued by AI for nonprofits. So I invite you every week to come along with me on this AI journey. We'll learn some news, we'll learn some resources, and hear some stories.

Carolyn Woodard

If you have questions, you can uh get in touch with me through the podcast, through our website at community it.com on Reddit at r slash nonprofit IT Management. And I look forward to continuing this conversation.

Carolyn Woodard

So this week have a quick news announcement if you haven't seen it, and then a kind of a case study that I wanted to dive into a little bit of local news that really I think is an example and will have impact on nonprofits around the United States. So this is part one of a two-part series about data centers and communities around them and nonprofits and how our communities are being impacted. And uh this today I want to talk a lot about um, I don't know, just some new developments and who gets to decide where the data centers go and how they are regulated. So,

Carolyn Woodard

But before I get to that, I wanted to talk a little bit about the Bernie Sanders uh introduced this AI Sovereign Wealth Fund Act last week, um, which is a bill that would require AI companies that cross the $200 million in annual revenue to transfer 50% of their stock to a federally managed fund. And this would be stock, not cash. An independent seven-person commission would hold voting shares on this fund, and every American would receive annual direct payments from that fund.

Carolyn Woodard

Sanders projects that that would exceed $1,000 annually, and it would have a required 5% dividend, the fund would from that the stocks that it owned in the AI companies. So it's such an interesting idea.

Carolyn Woodard

I don't know how you feel about Bernie Sanders, but of course he's, you know, he's got a take on AI. And his idea is that because AI was built on humanity's collective output, our books, our writing, our coding, our journalism, our scientific research, all this public data that was scraped without consent, basically. Uh, and only a small number of people are profiting from it. And so he frames this as a public resource question, similar to you know, public lands that would have like mining or oil extracted, or public goods like air or water that we all collectively own, and um how that would work. So

Carolyn Woodard

It's not only a kind of left-wing uh democratic socialist idea. So Anthropic's CEO has also written that he wanted one idea is for taxes on AI companies to finance universal basic income. And part of that argument is that because AI is having such an impact on jobs that, you know, if entry-level, if the type of entry-level jobs or, you know, kind of basic jobs go away because they can be done by AI, which we're already seeing happening a little bit in the for-profit sector, then there becomes more of an issue of people are going to be unemployed and maybe unemployable because the things that they know how to do, AI just does now. So it's an interesting idea to have AI companies pay for a universal, basic universal income.

Carolyn Woodard

Open AI is has also proposed a public wealth fund. So I guess this is actually the creating a fund is a little bit similar to like in Alaska, how I think it's shut down now, but for a while, there everyone, all residents in uh Alaska would get dividends from Alaska oil fields. So even the Trump administration apparently has uh talked about the government taking equity stakes in AI companies and this idea of like who benefits from the AI that was built with all of our collective knowledge. Um, you know, so it's it's a question that's out there across the politics.

Carolyn Woodard

This bill would be about public ownership stakes in AI companies. So it wouldn't the the fund wouldn't own the models, which is kind of interesting, right? That's what was taken from our collective knowledge, but the company's shares would be owned by this fund after they cross this uh revenue uh limit.

Carolyn Woodard

And so I just want to like come back to you. It's just an interesting idea to think about what would this look like? If AI is a public good, what does that look like? You know,

Carolyn Woodard

If you're a nonprofit that works on advocacy and ownership, we've talked a lot in the past, you know, four or five years about who owns the data, who owns your health data, if you're you know, um indigenous people's collective knowledge, uh, who owns that data, um, the the what you have created, do you own it? And uh so I think that's so interesting. Foundations are really thinking about that when they're doing evaluations, uh, program officers at nonprofits are thinking about that when you're getting consent, you know, if you're um you know gathering information and data from constituents and um the communities that you work in, who owns that data and who uh deserves to benefit from it. So just an interesting idea to think about, keep an eye on what's gonna happen with that. And uh

Carolyn Woodard

It'd be interesting if there's kind of nonpartisan agreement on or bipartisan agreement on what do the AI companies owe the public good, collective good.

Carolyn Woodard

But what I really wanted to talk about is a very local case study. Uh as I've mentioned before, I live in Northern Virginia, which currently is home to the most data centers in the world. And I my home county um is has this interesting story evolving right now. I'm going to share the story in the show notes, but it's really just so fascinating for the nonprofit angle. So

Carolyn Woodard

There's a company called Gigaland. As always in data centers, there's like a subcontractor of a subcontractor that actually wants to build the data center, and then they have subcontractors that do the water and the permitting and the construction and all of that piece. But Gigaland is the company that wants to build this data center in um Remington, Virginia, uh, which is kind of the edge of what is already, we have all of these, this high concentration of data centers in Loudoun County, Prince William County, uh Fairfax County. So Fauquier County is just uh next up on the list. But uh

Carolyn Woodard

Fauquier County is pretty rural and it has a lot of wealthy, large uh landowners who do not really like a lot of development in that county. So they already, there's a pretty strong uh kind of grassroots, I guess you would call it, coalition of you know, birdwatchers and farmers and landowners that want to do preservation, uh, not necessarily so much of, well, also of wild spaces, but also of farmland. So they want it to look like a farming community and still have fields and cows and et cetera. S

Carolyn Woodard

Tthere was already been a rezoning fight about a separate data center uh that was gonna be put in there by Amazon, which is stalled completely. This is a different one in Remington. And

Carolyn Woodard

The company, Gigaland, has announced that they are going to set aside 10 million in grants for local nonprofits. And the individual awards to the nonprofits, they said they want to do 10 nonprofits, uh, 1 million each. So in most cases, that is either the entire annual budget for that nonprofit or over what their annual budget would be. They have chosen a preliminary list of nonprofits that they've reached out to.

Carolyn Woodard

Stepping back a little bit, uh, this is a small rural county with a low population. So if you've worked in nonprofits in rural areas or small communities, you know that there are only a few. They uh all kind of work together usually, and there can be a scramble for donors and grants because they're working in the same area and there just aren't a ton of donors to go around or a ton of members or ton of a lot of grant money.

Carolyn Woodard

So backing up 10 to 15 years, our local hospital was sold, the nonprofit hospital was sold, and as often happens, part of that sale was money set aside for a community foundation, uh, which at the time was just an enormous amount of money compared to what nonprofits had seen in this county previously. And that community foundation, they're called the Path Foundation, they've been doing a great job. They do training for starting a nonprofit, they do uh, you know, management skills um trainings, they have interns every summer that do, you know, research projects and kind of work with the different nonprofits to build up their capacity and skills. Uh, they they have much larger grants than used to be available in this location, and so just really good um local community foundation.

Carolyn Woodard

And this 10 million is gonna dwarf what they do as well. So it's really interesting, large influx of potential money. And

Carolyn Woodard

GigaLand has said that this is quote unquote no strings attached. So they're not interested in partnering with these local nonprofits, they don't care how they spend their money, they are just gonna give these one-time grants. Uh, they are saying officially that this is not a requirement of those nonprofits, like helping advocate for them being able to build this data center. Uh, they they're saying that it's not quote unwell, they aren't saying it, but uh, you know, it kind of looks like a bribe, but they're being very careful to say that they're just gonna give this money uh and they're it's not they're not gonna control what those nonprofits or the staff or the boards can say about the data center development.

Carolyn Woodard

But the string that is attached is that these grants will only go forward after Gigaland gets the permit to build the data center. So it's a you know, we're gonna be a good neighbor in the future once we are your neighbor, basically, is how they've been selling it. Um,

Carolyn Woodard

A county supervisor described the money as um a proffer in return for support. So maybe they weren't supposed to say that out loud, but it's it's definitely uh you know out there as uh a kind of bribery to the community and to these nonprofits that are now in this big, you know, kind of complicated uh situation where they have to decide about those grants. So um

Carolyn Woodard

At the moment, there the the original um application for this development is on hold. Uh they are retooling it and coming back with uh I guess a smaller footprint, but they, you know, there are some things that the county uh planning committee asked them to change. So that's happening. And in the meantime, they said, oh, and we're also gonna give these grants. It's a developing story.

Carolyn Woodard

And so I, as I said, they announced the organizations that are potentially gonna get these grants, and you know, sometimes it's you know three, four times what their annual budget is. Um, some of the organizations have already said, yeah, they'll take the money from anyone they want to do their projects, the people that they help could use the funding and they're gonna take it. There are some who've said they're going to decline outright. They just don't want to be associated with this developer. Uh, you know, kind of bold move.

Carolyn Woodard

And there are, I think the largest group of the nonprofits have said they need to talk with their board, they need to talk with their major donors, they need to figure out if they're gonna take a grant or not, if the grant becomes available or not. So they're kind of hedging, hedging that bet and letting it settle down and see what happens.

Carolyn Woodard

So it's just so interesting to me because um a couple of weeks ago we talked about a piece on Substack from Nan Ransahoff about the huge amount of money that's about to come into philanthropy from the foundations of that are arms of these AI companies, big AI companies like OpenAI and Anthropic. And then also the staff, like as they do their IPOs and their valuations jump and the stock becomes worth, you know, astronomical amounts, their leadership, their board, and even you know, their staff are gonna invest in these shares and they have this program. They've said already many of the leaders in these different companies have said that they're going to create foundations or donor-advised funds to you know give away some of this money that they're making on this IPO and by being in early investors or early staff at these uh companies.

Carolyn Woodard

So we know that that money is gonna come flooding into philanthropy and that you know, in that substack, we kind of talked about philanthropy is not entirely ready either to have that money flow into existing structures, or we know that a lot of those uh individuals, high-worth individuals, are going to be they are disruptors. They're not gonna be interested in existing structures or existing ecosystems. They're gonna want to do their own thing. They believe that disruption is always good. They're, you know, they don't, they're not philanthropists, they haven't been doing this, so they're gonna want to, you know, break it and see what happens. So we'll see.

Carolyn Woodard

I mean, in that sense, Gigaland also isn't, they're not interested in being philanthropists. They aren't interested in partnering with local nonprofits, they have no interest in what the uh funding would be spent on. So, in some ways, that like echoes trust-based philanthropy, right? Here's a grant, and uh you go do what you think you need to spend on. You could spend it on staff, you can give yourselves all a raise, you can do more programs, you could finally fix your IT. Um, but you they're, you know, it's not a partnership basically. Um, they are just gonna write these big checks, and they that is their idea of being a good community partner and a good neighbor.

Carolyn Woodard

Grants of that size naturally create risk and challenges for nonprofits to absorb them, especially if it's a one-time grant, not an ongoing relationship. I will share some uh resources in the comments on what happens when you get a big grant. Like there's a good article about Mackenzie Scott money that just, you know, comes in and is unrestricted. You can do what you want with it. It makes a big change to your organization, to your staff, and to your community, what you do, what people's perception of you is. Oh, now you've got all this money. Like you may find that you lose donors because they're like, Well, you don't need my little contribution when you've got this. I read in the paper you just got this big check. So of course, it could make it harder to speak out at a public hearing. Um, you know, there's

Carolyn Woodard

As I said, there's a bunch of environmental organizations operating in this county, both preserving farmland, doing farm-to-table work, um, getting young people to go into farming and agricultural uses, and then doing also preservation and conservation, conservation easements. They have the opportunity to get these funds, um, maybe to fight Gigaland.

Carolyn Woodard

And also Gigaland, of course, every time in the future that anyone says anything about them, they can say, Well, we gave away $10 million. Like, what more, what more do you want? We are a good neighbor.

Carolyn Woodard

I don't know. Like, would you? This is a question for you in the audience. If you got a big grant like this, would you still feel like you could um speak out? I mean, it's kind of a a ballsy move to take the funding and then still go to the public hearing and say, Yeah, I don't agree. Thanks for the money, but that's still gonna fight you. Um, and maybe it lets you do more advocacy than you could have done before. That'd be interesting to see happen. So we're gonna see how it plays out in Fauquier.

Carolyn Woodard

But the reason I wanted to kind of go into this um mini study, case study on this location, you know, in Northern Virginia, is that then I was got curious about is this happening in other places? Like did Gigaland come up with this idea on their own, or is this an ongoing strategy that data center companies are using to buy goodwill in localities? Um, and

Carolyn Woodard

I found a couple of things I want to share with you that you might be interested in. Um, Meta, the company behind Facebook and Instagram, has a data center community action grant program, which they have run since 2011. Um, they distribute, it's a it's a funding program. So it goes to schools, nonprofits, um, other organizations in data center host communities, as they call it. And Google also has a similar program. I think Amazon has a similar one as well.

Carolyn Woodard

So these are after the data center, it's not tied to whether you get the data center, it's in giving back in communities where data centers have been built. And it's ongoing programs, you know, it's partnering with the local community, there are grants, they have grant, you know, program officers, grant managers, et cetera. You apply for them, and then you get to do things in your community where the data center sits.

Carolyn Woodard

So that's quite different from what Gigaland is doing. They want to just give you a lump sum, they're dangling it before approval. If the data center gets approved, then there'll be this $10 million for the 10 local organizations. So it's a similar, like good, I don't know. I guess it's coming doing a similar thing per potentially, but maybe coming from different places of whether you're partnering or if you're just like, I was gonna say it's like a helicopter philanthropy, like you just hover and like drop a you know, bag of cash down into these organizations, but I think it's even worse than that, like, or worse, it's different than just a helicopter, just dropping the money on these organizations. Like clearly they want something in return for it, that at least goodwill.

Carolyn Woodard

There is a lot of opposition to data centers, and that opposition is growing, and the community voice, citizen voice uh ability to halt or gum up or require more in electricity, you know, being part of the deal, or water being part of the deal is growing very quickly. That's why these companies like tried to get in ahead of time before people really knew it was happening. Now there's a lot of awareness of how bad data centers are for communities. And so there's a lot of opposition to them. So you can see the data center companies kind of changing tactics.

Carolyn Woodard

You know, I often say, oh, we have agency, if you want to make an impact in how data centers are run, how environmentally damaging, how expensive, uh, and how you know not clean the energy use is of these data centers and where they are sited. Uh, the most impact you can have is getting involved locally, going to these planning meetings, making your voice heard, you know, forming coalitions, joining coalitions, and it's starting to really um block some of these developments. As I said, there's one in uh Fauquier County that's been on hold for, I think, three years now because it's just had a bunch of lawsuits against it and uh coalitions speaking out against it. So it can, you can have impact in that way.

Carolyn Woodard

It'll be interesting to see if more organizations take on this strategy of trying to dangle the funding for the local nonprofits and, like I said, some of these very small communities where a million-dollar grant is a huge difference. That makes a really big difference. It's really going to be really hard to say no to a grant like that.

Carolyn Woodard

So if you're in a nonprofit and you're thinking about this, like keep an eye open because it may be coming soon to a county near you that the developers are adapting this uh tactic. Um, I read a couple different articles about different communities where this is happening, this type of um of bribery, I guess is the easiest way to think about it. Um, so maybe talk to your board, uh, look at some of these resources.

Carolyn Woodard

I'm gonna share some resources on uh how what happens. Like there's research and uh articles about when you get that really big gift, what happens to your organization, your staff, your mission. Um, so think about that and talk about it with your board. Uh be ready ahead of time, I guess, is something to say, both for this and for the, you know, just the AI money coming into philanthropy that's going to be coming.

Carolyn Woodard

But I did want to go back to something I mentioned maybe a couple of months ago, which is this idea of the local community benefit agreements and coalitions of citizens, uh, citizen action groups that have been able to negotiate with their elected officials, with the data centers to put in these community benefit agreements ahead of time or as they go through these negotiations. And these are binding, enforceable contracts. They are negotiated along with approvals, they're not voluntary grants. They're not a voluntary data center saying, you know, we eventually will use a closed cooling system with the water that doesn't evaporate. We won't be taking the water. It doesn't rely on goodwill of any of the parties. It's an enforceable contract. And there,

Carolyn Woodard

I will share the article with you a couple of resources on Lancaster, Pennsylvania, which used a uh this model, the community benefit agreement. Uh they got 20 million in community contributions from the data center developer in their organization in their location with a hard cap on water use, 100% clean energy requirement, noise limits, localing higher local hiring commitments, all built into this agreement. And guess what? The data center company still agreed to it and built the data center and is, you know, now they can be held accountable through this agreement.

Carolyn Woodard

So if you're interested in that, there is a uh resource in the show notes that you can look up how they did it and uh some studies on and checklist of like if you want to pursue this type of uh negotiating tactic in your locality, how they did it and how you can do it, and more resources on that. So, and

Carolyn Woodard

I guess I want to leave you with this, you know, question and answer of if a data center company offered your nonprofit a large grant like this, um, would you take it? And how would you decide that you're gonna take it? It's really a complex decision.

Carolyn Woodard

I think when I was starting out in nonprofits, I would have said, of course, you take any money you can get anywhere you can get it, but there is no universal right answer to this question. Um, but these are questions that your executives and your board should think through maybe beforehand, so that if you do get that bag of cash dropped out of the helicopter on you, that you would uh kind of already have some things in place to help make that decision. Um,

Carolyn Woodard

So things to think about, of course, donor displacement, as I said, if um your local uh donors or maybe or even your major donors are gonna say, pfft, you don't need my help now, you just got this big grant. Um

Carolyn Woodard

If the project is controversial, is your organization gonna face a reputational risk that you're you know working with them, especially in a small community? Everybody knows everybody, and that newspaper article is gonna persist, people are gonna remember it for years, basically. Um,

Carolyn Woodard

Sustainability. I think this is the main thing that I would think about going into it is it's a one-time gift, it's a large amount. Um, how are you gonna make that sustainable? How are you gonna make it so that after the year of this, you know, great budget windfall, you are still um operationally sound and uh have put things in play? Maybe you have purchased things that you've needed for a while, um, and you thought about the total cost of ownership of those things and um, you know, just kind of how is this going to work once this money is no longer in our budget?

Carolyn Woodard

And of course, your voice in the community. So these are communities we care about. Um, are you able to still advocate for the things that your community wants and needs? Um, or are is that funding coming with a really strong string attached? Um, and

Carolyn Woodard

I think it comes back to organizations are going to be best positioned to answer these questions and deal with this complexity. Uh, whatever decisions you make are if you already know your values, if you have board alignment, if you, you know, have like a strong mission culture and you know, you know, like you know it's okay for your organization. Um

Carolyn Woodard

If you have, of course, it's uh if you've built in a gift acceptance policy or windfall policy, you can build those in place uh in advance. Uh do the research now. Um, not because documents like that or decisions like that taken before it's a reality can tell you what to decide in the moment, but because if you've already thought about it, and especially if you really, with all of your staff, have really solid values that underline what you do.

Carolyn Woodard

Like what is your why? Why is your organization doing what it does? And for all of the staff, why are you there doing what you do?

Carolyn Woodard

Those values being very strong and well understood and articulated, um, you know, not just kind of uh behind the scenes and uh fluffy, but just really these are our values, and this is why we do what we do. That I think helps give you a lot of clarity when you make these types of decisions, especially if it's under pressure, you know, if there's a time frame and it, you know, comes up suddenly. Uh, that is, you know,

Carolyn Woodard

Whoever that check comes from, if it comes from a data center developer, you know, a tech billionaire, an AI company looking for partners, Mackenzie Scott, like whoever it comes from, you know what to do with it. Um, you know, it's a good problem to have, but it is a good problem to maybe think through uh that complexity.

Carolyn Woodard

So I put all of these resources in the show notes. Uh, if you haven't thought about it yet, and you never thought like you'd have to think about it. I think even if you aren't looking at this data center money, uh, as I said, there is going to be AI money coming into philanthropy. So just, you know, keep an eye out and think about. Um,

Carolyn Woodard

I know organizations are already feeling a complex decision even to use AI and whether that fits with your organizational values or harms communities that you care about. So this is kind of the next step of that question of uh AI money. Like if you're using AI, would you accept the AI money? Uh, would you accept data center money? Um, and how that, you know, like how do your values help you make those decisions? I think is something worth thinking about.

Carolyn Woodard

So I'm gonna come back with a part two on this of uh another piece of the local uh regulations or a bunch of resources. I'm gonna share a bunch with you today, and there were just so many that I couldn't pack it all into a short enough uh podcast, but I'll be gonna be talking about it next week. Of course, there will probably be, you know, 10 new news stories as well to share with you because everything is really happening at a fast clip.

Carolyn Woodard

But I hope that these podcast check-ins are helpful to you. The resources are available. Uh, sometimes it's just a matter of um someone helping curate uh of everything coming at you, um, some good things to read up on and think about. So I hope this is helpful for you in that way.

Carolyn Woodard

We'll be back on Friday with the webinar part two podcast on securing uh Google Workspace. If you are a nonprofit working in Google Workspace, some of the things you need to think about and can do yourself to make sure that Google is uh as secure as it can be for you and your nonprofit. And then we'll be back next Tuesday with more nonprofit AI part two on database regulation locally. So until then, take care.