Warren Buffett and Bill Gates created The Giving Pledge
1 - Giving Pledgers promised to give their wealth away. As a group, they’re wealthier now than when they made the pledge.
2 - These high-end donors increasingly give to intermediaries rather than working charities.
3 - Some billionaires are blending their charitable giving with for-profit investment.
4 - High-end philanthropy is subsidized by regular taxpayers.
Mark Zuckerberg’s Foundation:
Following in the footsteps of eBay’s founder, Pierre Omidyar, CZI continues the tradition of “impact investing“,
which is essentially supporting nonprofit organizations in addition to selected for-profit entities…
They are dodging taxes by donating to their foundations and then using the money
to invest in the same things they would want to invest in if the money
wasn’t in a charity and they had to pay taxes on it. The whole thing is a scam!
Billionaire Philanthropy Is a Scam
The True Cost of Billionaire Philanthropy
Chuck Feeney did not get richer as he gave his money away.
4 - High-end philanthropy is subsidized by regular taxpayers.
I feel like this is really under-appreciated. Like, Rich Dude decides he wants to donate $100M to…whatever - early childhood education. In the US, he avoids up to $37M taxes, which you can either look at as other taxpayers making $37M matching donation or $37M taken from other society objectives.
To the extent that government is a (marginally) publicly accountable system for funding a society’s competing goals - education, health, defense, research - charity allows the very wealthy not just to bypass the social structure for prioritizing goals, but to force other taxpayers to adopt their personal priorities. Maybe the goal is good, maybe it’s not - the point is that they’re completely unaccountable.
What makes high-end philanthropy different from low-end philanthropy? Don’t they both get the same tax cuts?
What makes high-end philanthropy different from low-end philanthropy?
When you donate something to a charity (money or physical objects) do you then get to keep using the money or objects? No, you no longer have them in your possession - you have relinquished control of it.
The rich set up foundations called a Donor-advised fund
It is: a public charity, where an individual can make a charitable gift to enjoy an immediate tax benefit and retain advisory privileges to disburse charitable gifts over time.
Ask yourself why every single billionaire starts his or her own charity instead of giving to the thousands that already exist. Because once it is gifted like that it no longer belongs to them. They are literally donating money to themselves and avoiding taxes.
They probably do not get the same tax cuts: a “normal” person, making a paltry $250,000/year only reduces taxes by 24% of their giving, where the ultra-rich get 37%.
But the real difference is scale. A million people each giving $100 to their favorite charity is going to distribute that money more-or-less according to the community’s overall priorities. One person giving $100M to their favorite charity has no connection to the broader community and social goals. They supercharge that one thing, which takes attention and resources from everything else.
