WHERE’D IT GO?

Breitbart Editor Milo Yiannopoulos Takes $100,000 for Charity, Gives $0

The alt-right icon promised to give scholarships to white men, but almost a year later he still hasn’t filed with the IRS or handed out a penny.

08.19.16 5:15 AM ET

Months after he was supposed to give away more than $100,000 for college scholarships, Milo Yiannopoulos says all of the money is still sitting in his bank account.

The Breitbart editor and professional political agitator (recently banned from Twitter for harassment) came under fire this week as allegations surfaced that his charity, which would provide college scholarships exclusively to white men, has so far done no charity work with the money.

Yiannopoulos told The Daily Beast on Thursday that his lawyers are drafting paperwork that would establish it as a legal charity, but experts say that the way in which the “Yiannopoulos Privilege Grant” accepted donations was unethical and possibly illegal.

Yiannopoulos promised in January to create a college scholarship fund for “white men who wish to pursue their post-secondary education” that would be awarded in “early summer 2016.” The fund has raised somewhere between $100,000 and $250,000 to date, Yiannopoulos told The Daily Beast via email.

But the Yiannopoulos Privilege Grant has not filed any paperwork to become a charity in the United States. When asked if an application for tax-exempt status had been sent by his lawyers to the Internal Revenue Service, Yiannopoulos said, “I’ll check.”

No scholarships have been awarded and the charity’s website shows there isn’t even a way for prospective students to apply for them.

The grant program was announced with the self-congratulatory fanfare typical of many Breitbart articles written about its chief firebrand.

“In a move certain to infuriate the left, Breitbart Tech Editor Milo Yiannopoulos has created the Yiannopoulos Privilege Grant, a scholarship exclusively available to white men who wish to pursue their post-secondary education on equal footing with their female, queer and ethnic minority classmates,” staff writer William Bigelow wrote in Breitbart, providing a wide audience for the grant’s publicity, on Jan. 21 this year.

The promise at the time was that the fund would disburse 50 grants of $2,500 to poor, young white men, a move intended to rile the left and raise the profile of the website and the so-called alt-right, a movement whose ascendancy reached new heights this week when Breitbart News executive Steve Bannon was made chairman of Donald Trump’s presidential campaign.

After the initial announcement in January, Yiannopoulos and several figures in the alt-right hosted a five-hour online telethon to collect money from donors. In the description for the video on Yiannopoulos’s account, there is a promise that the Privilege Grant will give 100 grants (not 50 as promised earlier) totaling $250,000 to “white men in support of their post-secondary education.”

While the group vowed that an application page would open on the website by the spring of 2016, it has yet to appear as of this writing. The grant’s website currently states that “applications are not yet open” and “please do not write to us if you are a prospective Grant applicant.”

“The initial flurry of interest in the Privilege Grant, and my skyrocketing media profile, left us behind on logistics,” Yiannopoulos said in a statement to The Daily Beast on Thursday. Yiannopoulos said he was announcing a new “administrative lead,” Colin Madine, after a series of questions about the program from The Daily Beast and on social media.

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“This was compounded by our previous administrator leaving the team. I am pleased to have Colin leading the Privilege Grant team so we can begin to help students achieve their college dreams in short order.”

Yiannopoulos claims that about $100,000 has already been donated and an additional amount up to $250,000 has been pledged from donors and himself.

The fund’s troubles came to the surface on social media this week in a public spat between the two proprietors of the operation, Yiannopoulos and Margaret MacLennan, a self-described “Canadian conservative” YouTube personality who she said was tasked with running the grant.

MacLennan alleged in a tweet that Yiannopoulos was transferring money intended for the grant to a personal account. MacLennan posted a screenshot of the alleged transfer to bolster the claim, sarcastically stating, “We all know I clearly profited from donations to the Grant.” She claimed to The Daily Beast that this was for the purpose of transparency.

The screenshot was of a document given to donors that provided instructions for wiring money into Yiannopoulos’s bank account (PDF).

“It is the only indication anywhere about the destination of the money,” MacLennan said. She said she was unaware as to how much had been collected.

But when asked by The Daily Beast about her involvement in the operation, MacLennan claimed: “I don’t know anything about the financial side. I was never privy to it.” She said that in her role as “director,” MacLennan was tasked with “developing applications and the reward process.”

“I was not able to meet these goals,” she said.

A source familiar with the internal workings claimed that MacLennan did little work on the project “partly due to disinterest.”

After MacLennan’s tweet, Yiannopoulos emailed her to settle things and came to an agreement to start accepting applications and begin the transition of the grant process to a different administrator, Marc Roberts.

MacLennan said that she could not reach the goals of assisting in the application process “because [she] didn’t have the administrative software or similar to start.”

“If I can’t organize the names of prospective applicants, then I would be unable to begin to plan to set out applications,” she explained.

According to Pace University law professor James Fishman, Yiannopoulos’s charity must file a Form 1023 for tax-exempt status with the IRS within 27 months of the first month it was incorporated.

“Given the amount of money raised, I think it is inexcusable that this organization has not filed the Form 1023, or found an exempt 501(c)(3) organization willing to serve as the fiscal sponsor of the organization you mention,” Fishman told The Daily Beast. A fiscal sponsor is a “sponsoring organization that controls the books of the not yet exempt nonprofit, which can bootstrap on the fiscal sponsor’s exempt status,” he added.

Ellis M. Carter, a lawyer specializing in nonprofit groups, told The Daily Beast that the charity might be violating both federal law and some state laws by not declaring itself as a charity to both states and donors.

“There’s state and federal laws against fraud and misrepresentation for declaring a scholarship fund prior to getting an exemption,” said Carter. “They need to be honest about their status if they’re not a 501(c)3.”

Forty states and the District of Columbia require registration in advance of engaging in any fundraising or solicitation activity, Carter added.

“Most states require that you register before you solicit your first donation in their state. If you have a passive ‘Donate Here’ button, some states will let that fly. But not all of them feel that way,” said Carter. “If you’re aggressively emailing and reaching out and getting people to donate to your cause, that’s different.” Carter added a telethon would likely meet that criterion.

A Reddit thread published on Wednesday drew more attention to the missing scholarships, alleging that the money was funnelled into Yiannopoulos’s business Caligula Limited, which is now defunct. However, a source familiar with the transactions told The Daily Beast that the money is in a bank account separate and apart from Caligula Limited.

Blaire White, another person who participated in the telethon, expressed frustration with the lack of clarity in the money collection process.

“I feel duped for having been a part of the fundraising stream,” she tweeted. “People need an explanation. Tons of money collected.”

White did not immediately respond to a request for comment.

For her part, MacLennan said that her tweet (showing an application for a wire transfer to an account under Yiannopolous’s name) was “appended to every person who emailed the Grant asking how to donate.”

Outside of this independent project, Yiannopoulos has strong ties to grassroots efforts for the Donald Trump campaign both on and off the web. Near the RNC, he hosted a “Citizens for Trump” rally at Cleveland’s Settlers park. The conservative columnist is even a moderator on the largest online Donald Trump community, Reddit’s r/The_Donald. He also faced a high court order in the U.K. for unpaid wages to workers for his startup blog “The Kernel” in 2013.

“All of my very best ideas start as mischievous jokes because they will wind up the right people,” Yiannopoulos boasted about the project back in January.

This time, it may have wound up the wrong ones.