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Billionaires have a lot of money, obviously. But they also give a lot of money away. Back in 2010, Bill Gates and Warren Buffett created something called “The Giving Pledge,” an initiative to help the super-wealthy donate the majority of their money to charity. And recently, former world’s richest man and Amazon CEO Jeff Bezos pledged to give away most of his wealth to charitable causes before he dies. This all seems like pretty positive news.
One of the major benefits of this is this kind of philanthropy can end up funding projects and research that really help humankind. For instance, abortion and contraception access worldwide is almost entirely billionaire-funded, with advances in safe abortion and contraception made through billionaire-funded research. And, when the pandemic was just beginning, billionaire-financed Fast Grants moved money quickly into COVID research.
But that’s not the whole story. Billionaire philanthropy isn’t always a totally selfless act.
Billionaires have been known to spend their money helping nonprofit causes, yes – but those causes are sometimes directly linked to public policy, shifting the priorities of democratically-elected governments and local authorities. For example, George Soros and Charles Koch are pretty widely known for using philanthropy as a tool of power.
And then there are the tax loopholes. Did you ever notice that a lot of billionaires don’t just donate to existing charities but actually create their own? Think of the Bill and Melinda Gates Foundation. But sometimes, these charities are donor-advised funds (DAF). The New York Times defines a DAF as “a sort of charitable checking account with serious tax benefits and little or no accountability.”
DAFs work by allowing the wealthy to give assets to an organization, but not making them give up control of those assets. The organizations will only make grants at a donor’s request, essentially just holding onto these assets without doing anything with them until given the go-ahead. So, donors get the immediate tax benefits of donating to charity, and the charitable funds or assets don’t actually have to be given up for a while – or maybe forever.