Pershing Square Foundation (PSF) is a nonprofit organization that funds for-profit organizations that provide social services and left-of-center advocacy organizations. [1] [2] PSF is the private foundation of Pershing Square Capital Management, both of which were founded by billionaire Bill Ackman. [3]
PSF invests in and provides grants to organizations that address social issues and advocate for liberal policy. [4] The majority of PSF’s assets belong to investments not classified as being for “charitable purposes” as determined by the IRS, such as low-income housing developments. [5]
Background
Pershing Square Foundation is a nonprofit donor-advised fund that was founded in 2006 by the billionaire Bill Ackman and his wife Karen. [6] [7] PSF is a grantmaking organization that funds left-of-center advocacy groups and for-profit organizations that provide social services. [8]
PSF describes its spending as impact investing. PSF trustee Bill Ackman states he prefers to invest in for-profit companies that provide social services, such as low-income housing developments, so that its philanthropy has a lasting impact. [9]
Finances
In 2020, Pershing Square Foundation received $12.4 million in contributions, all of which were from Bill Ackman. [10] [11] It also spent $30.6 million in contributions to other organizations and reported $35.3 million in total spending. [12]
Most of PSF’s spending goes towards for-profit organizations, which is not considered by the IRS to be for charitable purposes. In 2020, PSF reported having $241.8 million worth of assets that are not to be used for charitable purposes. [13] From its for-profit assets, PSF made an $11.9 million return on its investments. [14]
In 2021, it was announced Ackman arranged to give $1.3 billion worth of stock to the foundation. [15] Based on U.S. tax law, it has been argued that Ackman donates his stock to PSF and has it as a donor-advised fund as opposed to a private foundation for increased tax benefit. By doing so, it has been estimated to reduce Ackman’s taxable income by up to 20%. [16]
In 2020, PSF gave $6.25 million to the New Venture Fund, a left-of-center nonprofit organization that acts as a pass-through organization, donating to left-of-center and environmentalist groups without disclosing the original donors. [17] [18]
Bill Ackman
Bill Ackman is a trustee of Pershing Square Foundation and portfolio manager of Pershing Square Capital Management since 2003. Before creating Pershing Square Capital Management, Ackman co-founded Gotham Partners Management, an investment firm that managed hedge fund portfolios. [19] Historically, Ackman has predominantly donated to Democratic campaigns, has supported left-progressive social programs, and donated to liberal advocacy groups. [20] [21]