Anthropic Puts 5% of Its Shares Into a Public Benefit Fund: Another 2% for Every 50% Rise in Value, None for Lobbying or Political Giving

Anthropic announced on October 18 that it is creating the Anthropic Public Benefit Fund. Subject to stockholder approval, 5% of the company's shares are committed up front; after that, the board may add another 2% for every 50% increase in the company's value above a set baseline. The fund is a wholly owned LLC rather than a 501(c)(3) nonprofit, which Anthropic says makes it easier to move between forms of giving, such as large donations to traditional nonprofits or direct distributions to specific populations, with AI's impact on the labor market given as an example. None of the fund's Anthropic equity will be used for lobbying or political giving, in the US or abroad. Together with the co-founders' pledge to donate 80% of their equity and an employee equity donation match, Anthropic says roughly 20% of its shares will be dedicated to the public good. The baseline valuation and governance structure have not been published; the company says it will share them in the coming months.

A stake that grows with the valuation

Anthropic announced the Anthropic Public Benefit Fund on its website on October 18. Subject to stockholder approval, 5% of the company's shares are committed now; after that, the board may add another 2% at its discretion for every 50% increase in the company's value above "a set baseline." In other words, the more the company is worth, the larger the fund's share can become. The announcement does not say what the baseline is or where the milestones sit.

Anthropic frames the equity against executive pay: tech companies commonly give executives escalating compensation awards, and it is directing that equity to the public benefit instead.

Why an LLC

The fund is a wholly owned limited liability company, not a 501(c)(3) nonprofit, the usual US vehicle. Anthropic says this allows adjustment between different forms of giving, such as large donations to traditional nonprofits or direct distributions to specific populations. Its example is AI's impact on the labor market: the company has already committed $200 million to studying the issue and says that, given the pace of AI progress, bolder approaches may be needed. The announcement also states that none of the Anthropic equity held by the fund will be used for lobbying or political giving, in the US or abroad.

Where "roughly 20%" comes from

The figure is not the new fund alone. When Anthropic was founded, its co-founders pledged to donate 80% of their equity, and the company runs an equity donation match program in which about half of employees participate. Anthropic says the three together come to roughly 20% of its shares, not counting any milestone-based additions. Reuters reports that Anthropic is preparing to go public as a public benefit corporation (PBC).

Anthropic says the fund's governance, the valuation milestones and its first public benefit report will come in the next few months. Until then, it is not possible to tell who decides how the money is spent or when the extra 2% would kick in.

via: Anthropic: Investing in the public benefit, Reuters (via KSL): Anthropic to commit 5% stake to new public benefit fund