Was the FUPA Fund a scam?

The Fair Use Protection Account

Background

In 2016, Ethan Klein was sued by Matt Hosseinzadeh for copyright infringement.^[1]
Philip DeFranco launched a GoFundMe to help fund Ethan and Hila in defense of the lawsuit. It raised $170k.^[2]

Claim

Ethan committed some sort of financial impropriety with the FUPA fund.

Truth

The express purpose of Philip DeFranco's GoFundMe was: "Please join me in donating to H3H3's defense fund and taking a stand together as a community. If you don't have the cash, please just get the word out about this."^[2] So, at the time everyone donated, there wasn't even a concept of the FUPA Fund. It was intended solely for the Klein's.
The GoFundMe page was launched on the 25th of May whereas FUPA was announced on the 27th. By the time FUPA was announced, the campaign had already raised $117k, well surprassing its goal of $100k.^[3]
The original estimates from their attorney was that the legal defense would cost $100k.^[4]
Since they raised much more, the Kleins generously came up with the idea of the FUPA fund to give money back to the community after their lawsuit. Saying that the money raised would become a community fund with them "...as the first clients".^[5]
The creation of the fund was guided by the advice of their original attorney, who proved to be incorrect that this non profit would be able to legally be used to even support the Kleins.^[6]
The result of the lawsuit, was establishing a case law precedent for all reaction content. Proving that H3's reaction was "quintessential fair use" and protecting future creators from legal threats over fair use commentary.^[7]
The legal defense, however, ended up costing well over $170k. With even the first month of fees totalling over $56k. This was well past the estimate of their original lawyer and caused Ethan and Hila to additionally pay over $15k out of their own pocket.^[8]
Although the FUPA fund did not materialize, Ethan and Hila continue to advocate for small creators against abuses of fair use. The House of Tabula, for example, praised Ethan and Hila for helping with a predatory lawsuit against them.^[9]
There is not a single reputable news source that alleges any financial impropriety on the Kleins.
This is an in-depth, 41m video that delves deeper into the topic

Conclusion

All money raised for the Klein's legal defense was raised under the pretense that it would only be used for the Kleins. The Kleins were misinformed on how much their legal fund would cost and, in a gesture of good will, said they would give excess funds to the community. The lawsuit ended up costing far more than the funds raised and the logistics of setting up a public legal fund were intractable. For these reasons, they gave up on the idea of the FUPA fund.

Background

Claim

Truth

Conclusion

References