The majority of IKEA outlets are controlled by the holding company INGKA Holding, which is owned by the Stichting INGKA Foundation. The Stichting INGKA Foundation is one of the largest charitable foundations in the world and is registered in the Netherlands.
This complicated structuring helps IKEA minimize its taxes, makes a hostile takeover impossible, and permits the company to operate as a nonprofit corporation.
Silicon Valley Bank did a good conference call on COVID-19 relief this week.
Some interesting context on this: https://www.bloomberg.com/opinion/articles/2020-04-03/small-business-bailout-makes-banks-nervous
Thanks for this! Well-written and an important point.
This dynamic is probably at play for psychedelics: Whether or not psychedelics are an EA cause area
I hadn’t, thanks!
Yeah, I’d be pretty surprised if any reputable foundations were taking ownership stake when they make grants. (Because that’d be an investment, not a donation.)
Ought’s accountants (who’ve taken a close look at the CARES Act) confirmed that the “affiliation test” is determined by ownership, so it shouldn’t be an issue for nonprofits so long as the org isn’t owned by its donors.
Could also be cool to administer a coronavirus prize independent from Emergent Ventures, trying to get more expected impact than Tyler.
Increase Emergent Ventures’ pool for coronavirus prizes? https://marginalrevolution.com/marginalrevolution/2020/03/1-million-plus-in-emergent-ventures-prizes-for-coronavirus-work.html
Looks like the big banks have been pushing back about administering these loans: https://www.reuters.com/article/us-health-coronavirus-stimulus-banks-exc-idUSKBN21K075
This discussion of which VC-backed startups are ineligible makes me think most nonprofits will be eligible: https://intro.indie.vc/vcbacked-companies
Not definitive though.
This guide is also good: https://intro.indie.vc/sba
As long as the number of full-time equivalent (FTE) employees at the end of this eight week period matches the number of FTE you had before (either calculated an average monthly FTEs during Feb-Jun 2019 or average monthly FTEs in Jan + Feb 2020), your loan will be forgiven. It can also be partially forgiven in proportion to your reduction in FTEs.
This phrasing is ambiguous as to what would happen to loan forgiveness if a firm increased the number of full-time employees during the loan period.
A friend’s firm asked me about this so I poked into it a bit. Having done that, I’m ~80% sure that increasing headcount during the loan period wouldn’t affect loan forgiveness.
From the statute text:
In General.—The amount of loan forgiveness under this section shall be reduced, but not increased, by multiplying the amount described in subsection (b) by the quotient obtained by dividing—
the average number of full-time equivalent employees per month employed by the eligible recipient during the covered period; by
at the election of the borrower—
the average number of full-time equivalent employees per month employed by the eligible recipient during the period beginning on February 15, 2019 and ending on June 30, 2019; or
the average number of full-time equivalent employees per month employed by the eligible recipient during the period beginning on January 1, 2020 and ending on February 29, 2020;
(Formatting isn’t perfect because legal formatting doesn’t play nice with EA Forum formatting.)
WaPo’s FAQ about the program seems pretty good.
Q: Can the loan eventually be forgiven?
Yes. The program includes loan forgiveness covering costs for the first eight weeks of the loan for companies able to keep employees on payroll or continue paying bills throughout the coronavirus crisis.
The amount of loan forgiveness will include payroll costs for individuals below $100,000 in annual income, mortgage and rent obligations, including interest and utility payments. If an employee is above a $100,000 annual salary, the first $100,000 will be factored into the company’s loan forgiveness total but any amount above that will not. As of Wednesday morning the SBA had not decided whether benefits will factor into that cap.
The total amount of forgiveness will be reduced if your workforce is drawn down through attrition or if wages are reduced. If you are forced to lay off employees because of economic conditions, you may be able to preserve some of your loan guarantee by hiring them back.
Fred Wilson points out the language of the act may prevent VC-backed startups from accessing the funds, because they are “affiliated” with organizations such that the total size of the affiliation is >500 employees: https://avc.com/2020/03/startups-and-sba-loans/
(This is because taking VC investment “affiliates” the startup with every other org the VC has funded.)
Has anyone looked into whether there might be an analogous concern for nonprofits who receive donations from foundations that have a lot of grantees, e.g. Open Phil?
Full text of the loan-forgiveness part of the statute: https://writing.kemitchell.com/2020/03/31/CARES-Loan-Forgiveness.html
Right – when we’re looking for ways to improve coordination, we should consider interventions at both the systemic level and the individual level.
It seems obvious that there’s a close relationship between the two levels. If the causal relationships between levels are murky, that implies casting a wide net when surveying potential interventions. (If we can’t see the causal relationships clearly at the start, we can’t confidently rule out interventions on either level.)
Institutional decision-making is the aggregate of individual decision-making, right?
Thank you for creating this! It’s important and extremely well-written.
Feels apropos to drop a pointer to Gabay et al. 2019 – “MDMA Increases Cooperation and Recruitment of Social Brain Areas When Playing Trustworthy Players in an Iterated Prisoner’s Dilemma”
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