Nonprofit Chronicles

Journalism about foundations, nonprofits and their impact

Last week, I gave a talk titled “The unchecked power of philanthropy” at an event called The Global Nicotine Forum in Warsaw. I explained how and why I’d decided to write about Bloomberg Philanthropies’ campaign against electronic cigarettes, beginning with a long article in the Chronicle of Philanthropy in March of last year and why I’ve continued to write about vaping on Medium.

The talk, delivered via Zoom, turned out to be timely.The campaign by Bloomberg and its allies surely contributed to the FDA’s decision this week to ban products made by JUUL, a popular brand of e-cigarettes. That decision is misguided, in my view. Here’s an excellent analysis by Jacob Grier in Slate.

For reasons that I don’t fully understand, the edited version of my talk, which I posted to Medium, has generated a lot of praise and become my best-read story of the year. Here’s a link.

Mescaline, a psychoactive alkaloid found in the peyote cactus native to Mexico and the southwestern U.S., is the oldest known psychedelic. It has been used for thousands of years by Indigenous peoples–and was a favorite drug of elders of the psychedelic world, including the writer Aldous Huxley, the poet Allen Ginsberg and the legendary chemist Alexander “Sasha” Shulgin. It was synthesized by a German chemist more than a century ago.

Yet mescaline faded from the scene during the 1950s and 1960s. It was supplanted in the counterculture by LSD, a far more potent drug.

More recently, research scientists at universities including Johns Hopkins and NYU have made psilocybin their drug of choice as they seek remedies for a variety of mental ailments. The nonprofit Multidisciplinary Association for Psychedelic Studies is moving closer to gaining FDA approval for MDMA and talk therapy as a treatment for PTSD. MDMA, known on the street as ecstasy or molly, could become widely available with a prescription in a year or two.

But mescaline has not been forgotten. A startup company called Journey Colab is preparing to start clinical trials to investigate the potential of mescaline to treat alcohol use disorder. Journey Colab and its founder, Jeeshan Chowdhury, have set aside equity in the company to recognize the contributions of indigenous people to psychedelic science.

Lucid News, a website about psychedelics to which I am a contributor, published my story about Journey Colab last week. Here’s the link.

Yes, you read that headline right. Unfortunately, many countries, including the US, are nowhere near on track to meet the commitments they’ve made to curb the burning of fossil fuels. Globally, emissions are again rising when they should be falling sharply. It’s not a pretty picture.

The encouraging news is that companies, investors and the US government are all getting serious about a crucial climate technology–removing carbon dioxide from the atmosphere. To avoid the worst impacts of climate change, it will be essential to remove billions of tons of CO2 from the air.

I’m not a newcomer to this topic. A decade or so ago, FORTUNE magazine published my story about carbon removal, headlined The business of cooling the planet. I followed up with e-book, published by Amazon, called Suck it up: How capturing carbon from the air can help solve the climate crisis. Reporters can be too late with a story, and they can be too early. I was, in this case, too early.

But things are changing! Several billion dollars are flowing into the business of carbon removal. Money is going to startups to develop and scale technologies for getting CO2 out of the air, and big companies are putting up even more money to pay for what are often called “negative emissions.” Eventually, government action will be required but these are important steps.

I wrote about all this at Medium, in a story headlined Suck it up, revisited. The best line in the story comes from Chris Sacca, a venture capitalism who wants to invest in carbon removal. He said:

Removal means removal. It means mopping up the 170 years of extractive sludge milk we’ve already spilled. Removal means we grab CO2 pollution already out there and sock it away permanently. As it has been described quite eloquently by others: When you only have one swimming pool, you gotta fish out the turds already floating around while simultaneously convincing people to stop dropping new turds.

You can read the rest of the story here.

It’s crazy hard to quit smoking. More than half of adult smokers try to quit in any given year, according to the most recent data from the CDC, and fewer than one in ten succeed.

Nicotine patches, nicotine gums, nicotine lozenges, medicines like varenicline, cognitive behavioral therapy–nothing works especially well.

This is why some scientists are intrigued by the unorthodox idea of helping people to quit smoking by giving them a psychedelic drug — psilocybin, the active ingredient in so-called magic mushrooms — along with therapy.

Scientists at the Center for Psychedelic & Consciousness Research at Johns Hopkins University have been investigating psilocybin-assisted therapy as a treatment for tobacco use disorder for more than a decade. They’ve reported quit rates among smokers that are, as best as I can tell, unprecedented in the contemporary literature about smoking cessation.

So promising are the early results that the National Institutes of Health last fall awarded a grant of nearly $4m to scholars at Johns Hopkins, the University of Alabama at Birmingham and New York University to further explore the impact of psilocybin on tobacco addiction. It’s the first NIH grant in more than 50 years to directly investigate the therapeutic effects of a classic psychedelic.

You can read the rest of this story on Medium.

Today, my story in the Chronicle of Philanthropy reports on a complaint filed by the attorney general of CA against ZeroDivide, its former CEO Tessie Guillermo and other officers and directors of the defunct and disgraced foundation.

San Francisco-based ZeroDivide collapsed abruptly in 2016, leaving unpaid debts, unanswered questions, and a trail of hurt behind.

Donations that it was holding for other charities disappeared. ZeroDivide failed to file federal informational tax returns. No explanation was forthcoming from Tessie Guillermo, CEO of ZeroDivide, or Carladenise Edwards, a health care executive who chaired its board. They went into “radio silence,” one of their funders told me.

They ducked questions again in 2019 when I broke the news in the Chronicle about the troubles at ZeroDivide. The foundation was created in 1998 and over time raised more than $50 million from other foundations, corporations and the government to bridge the so-called digital divide between rich and poor.

Guillermo hoped, it seems, to be able to tough out the scandal. At the time, she held two lucrative board seats — one at CommonSpirit, a big chain of nonprofit hospitals, which paid her more than $150,000 as its board chair and another at the Marguerite Casey Foundation, which paid her $36,000. It’s no wonder that she ducked responsibility for the mess at ZeroDivide.

No longer can she hide. The complaint from CA attorney general Rob Bonta is damning. It says that Guillermo and colleagues took more than $600,000 in funds that they were supposed to be holding for nonprofits that ZeroDivide fiscally sponsored, and instead spent that money elsewhere, apparently on ZeroDivide’s operations.

You can read the AG’s complaint here, with all the sordid details. It says that Guillermo and others knew what they were doing, and knew it was wrong. The defendants settled the civil lawsuit rather than face trial.

The foundations whose money was misappropriated by ZeroDivide include the California Endowment, the California Wellness Foundation, the Ford Foundation, the Whitman Institute, Wyncote Foundation, and the Vesper Society. When ZeroDivide collapsed, they mostly got the brush off from Guillermo. So did Renaissance Journalism, a small nonprofit that supports advocacy reporting on behalf of marginalized communities, which had entrusted more than $500,000 to ZeroDivide. Those funds vanished.

In my Chronicle story today, Jan Masaoka, chief executive of the California Association of Nonprofits, said: “Too often we in nonprofits don’t like to admit that there has been misconduct by people and organizations that we have trusted and liked. Misdeeds often go without consequences. I appreciate the rigor with which the attorney general’s office conducted the investigation, and I’m glad that there are real consequences for those responsible.”

Guillermo has been publicly shamed. She is barred from serving in a position of responsibility in the California nonprofit sector for three years. Presumably, she’ll have to give up her lucrative board seat at CommonSpirit, which operates hospitals in California.

Yesterday, Guillermo’s lawyer agreed to comment on the attorney general’s complaint for The Chronicle.

I expected that Guillermo would finally take responsibility for her misdeeds and perhaps express remorse. Silly me. Here is his statement, in full:

“ZeroDivide was an honorable and game-changing philanthropic leader, ahead of its time, that benefitted countless vulnerable individuals and communities through its work and support to create equity and narrow the digital divide for the underserved.  This case highlights the dilemma not-for-profit organizations can face from a scarcity of unrestricted funding, i.e., when precisely to abandon both the fundraising and the mission.  The Attorney General’s answer and legal theory remain untested given this settlement.  The defendants stand by their unequivocal denial of the allegations in the complaint.  Also, Tessie Guillermo had retired as CEO nearly a year prior to the end of ZeroDivide’s operations.  Even so, the defendants collectively agreed to settle the matter rather than undergo the expense and disruption of litigation.”

Advocacy groups are almost entirely disconnected from anything that feels like a market. The people who pay their bills – foundations and individual donors – are not their customers. They typically can’t measure their effectiveness. And their “competitors,” to the degree they have any, are often their allies. The Nature Conservancy and WWF compete with one another for funding, for media attention and for employees.

There’s one more way that incentives for advocacy groups are weird: Bad news is good news, and good news is bad news. Trump’s election set off a fundraising bonanza for the ACLU and Planned Parenthood. The LGBTQ movement was confounded when the US Supreme Court legalized gay marriage.

That’s the context for my new story at Medium, posted under the headline, When the good news about smoking is bad news for anti-smoking groups. And it’s really good news! The campaign against teen smoking in the US has been enormously successful. Teen smoking is down by more than 90 percent from a decade ago. Since most smokers start young, this augurs well for future declines in adult smoking, which is also falling.

You’d expect, as a result, to hear enthusiastic cheering from organizations like the Campaign for Tobacco-Free Kids. Nope. Instead of declaring victory and shutting down, they have shifted their focus from teen cigarette smoking to teen vaping.

They’ve done so despite overwhelming evidence that vaping is much safer than smoking or underage drinking, which is widespread among teens. Tobacco-Free Kids would not exist without harm, so they look for harm wherever they can find it. 

Perversely, these groups now want to ban vaping, the very thing that has helped teens avoid smoking and helped adults to quit smoking. It’s nuts.

So I’ve been writing about marijuana. Recently, it came to my attention that a 40-year-old Pittsburgh man named Daniel Muessig — a former criminal defense lawyer and freestyle rapper — was, in all likelihood, headed to prison for five years for selling large quantities of weed. This is, of course, exactly what publicly-traded companies like Canopy Growth and Green Thumb Industries do in states where marijuana is legal. Legal cannabis is a $30.6bn business in the US. But for some reason–namely, the stubbornly prohibitionist mentality of Washington politicians, up to and including President Biden–people’s lives are being ruined for selling pot. Still.

Yesterday I told Daniel’s story in Reason, a libertarian magazine that I’ve read and admired for years. Here’s a link. Reason has long crusaded for an end to the drug war, and for other causes that matter to me — free speech, gay rights, open borders (or at least massively more immigration), abortion rights, religious freedom and, broadly speaking, far less government intervention in the economy. I’m probably one of the few writers who has contributed to the socialist newspaper In These Times, Fortune, The Guardian and Reason, but there you have it.

Today I posted a story about Daniel’s case, marijuana reform and the Biden administration to Medium. Here’s the link. Daniel is not your typical drug dealer. He’s Jewish and college-educated with no criminal record. Of the 1,118 people sentenced in federal courts for marijuana trafficking in FY2020, some 62 percent were Hispanic and 18 percent were black, according to the U.S. Sentencing Commission. Since reading The New Jim Crow, Michelle Alexander’s fantastic book about mass incarceration, I’ve believed that ending the drug war is one of the most important things we can do to promote racial justice in America.

Marijuana is the perfect place to start. On that score, the Biden administration has utterly failed. He’s broken his campaign promises around an issue that is a political winner. People like Corey Booker and Chuck Schumer get this. So far, Biden does not. I hope you’ll take a look at these stories and speak up for legalizing marijuana.


“Young Mostly White Feral Cat” by Chriss Pagani is licensed under CC BY-NC-SA 2.0

Sometimes I chase stories. Other times, stories chase me.

In the case of a Bethesda, MD-based animal welfare charity called Alley Cat Allies, it’s definitely the latter.

I came across Alley Cat Allies in 2018 when I reported on its problems for The Chronicle of Philanthropy. A lawyer for the charity responded with an idiotic letter asking The Chronicle to remove the story, which, of course, The Chronicle did not do. I followed up with a long blogpost, then a Medium story and today, yet another. Every time I think I am done with these folks, a staff member or former staff member reaches out to me with new information.

Why bother to keep after Alley Cat Allies? Mostly because, from the start, this has been about a bigger issue–the failure of Charity Navigator and Candid to warn donors away from this deeply dysfunctional organization. To the contrary, despite public information pointing to problems with Alley Cat Allies that dates back 2004, Charity Navigator and Candid have rewarded the nonprofit with their highest ratings.

Here’s a link to the latest catalog of misdeeds at Alley Cat Allies.

At the very least, this should be a message to anyone who relies on Charity Navigator or Candid to vet charities: Don’t.

Some $2-billion was invested in the above-ground psychedelics “industry” last year. That’s stunning when you stop and think about it.

Most psychedelic drugs — LSD, psilocybin, MDMA — remain not merely illegal but Schedule 1 substances, according to the DEA. That means that they have “no currently accepted medical use and a high potential for abuse,” the government says.

No psychedelics company is profitable, as best as I can tell. Most have no revenues. Their business models are highly speculative–no one knows whether insurance companies will pay for treatments, and efforts to patent drugs like psilocybin that have been used by indigenous people for decades or centuries have met stiff resistance.

Still, the dollars are flowing in. That’s because investors and entrepreneurs alike believe that these drugs have enormous potential to alleviate suffering from PTSD, depression, anxiety and other mental health disorders. They’re embracing the risks, in large part because FDA-sanctioned clinical trials of these medicines have produced exciting results.

In my latest story for Medium, I talk with the founders of a venture capital firm called Palo Santo that has raised about $42 million and invested in 28 companies. Like many in the sector, they grew excited about working with psychedelics after experiencing the power of the drugs themselves. You can read my story here.

Happy new year, readers! A little late, but it’s still January.

I’d intended to post links to all my writings here in a timely fashion, but as John Lennon sang, ​​life is what happens to you when you are busing making other plans. So here goes.

LSD Chemist Leonard Pickard, Free at Last was my first story of 2022. I heard the 76-year-old Pickard speak at Horizons, a conference about psychedelic drugs, and was moved by his story. A brilliant, Ivy League-educated victim of the drug wars, Pickard spent 20 years in federal prison after being convicted of making large quantities of LSD. 

I then turned my attention back to e-cigarettes. I can’t let go of this important story because so much coverage of vaping (to the extent that there is any coverage at all) is lazy or ill-informed. Worse, the relentless campaigns against teen vaping from groups like the Campaign for Tobacco-Free Kids and the Truth Initiative perversely make it harder for adult smokers to switch from lethal combustible cigarettes to vapes, which are far less dangerous.

The CDC’s EVALI Screwup looks at the misnaming of a lung disease that was caused, not by legal e-cigarettes, but by illicit THC products. The CDC erred in calling the disease EVALI, which stands for “E-cigarette or Vaping use-Associated Lung Injury,” and it has refused to correct the error. This is awful, again, because it will discourage smokers from quitting and turning to e-cigs for the nicotine hits they want or need.

Then, back on the philanthropy beat, I took another look at Bloomberg Philanthropies’ critical role in financing anti-vaping campaigns. The story, headlined Michael Bloomberg Loves Data. Except When He Doesn’t, reports for the first time that some of the nation’s leading anti-smoking experts have been trying to meet with Bloomberg since last spring. He has refused. He and his colleagues seem entirely uninterested in listening to critics. One more bit of evidence (not that we need it) that foundations are accountable to no one.

Thanks for reading.