Elon Musk is known for spending billions of dollars on building better electric cars and bigger rockets. Since 2008, Tesla CEOs have spent more than $ 80 billion just rolling out the electric carmaker’s first three models, according to government financial records.
But when it comes to giving money away, the billionaire and leader of the Musk Foundation is a little less busy.
Founded in 2002 by Musk and his younger brother Kimbal, the Musk Foundation is a private 501 (c) (3) nonprofit. Kimbal Musk serves as secretary, treasurer and board director, while the older Musk serves as president and the sole financier after starting the organization with $ 2.5 million in 2002.
Every year, nonprofits like the Musk Foundation reveal their assets and donations to the IRS as paper or digital filing. Quartz collected nearly two decades of IRS records to analyze the fund̵
Between 2002 and 2015, the foundation averaged $ 493,801 a year, with assets falling to $ 57,000 in 2015. But the balance sheet rose dramatically next year with Musk’s contribution of 1.2 million shares of Tesla stock and launching a number of significant donations – the most of them to financial institutions that began to control his philanthropy.
So far, Musk has donated at least $ 257 million to the fund, most of which is Tesla shares. And its grants have risen again: Between 2016 and 2018, the Musk Foundation distributed $ 65 million, slightly more than the minimum (5% of assets) that the fund must pay annually to avoid IRS penalties. The fund’s latest archiving (tax year 2017) shows that most of the contributions have gone to approx. 200 non-profit organizations focusing on education, health care, community service, environment and space.
Most of the fund’s grants have received smaller contributions. The median amount is $ 10,000, and approx. 20% of the funds went to research, technology and community services in line with the Musk Foundation’s mission, as evidenced by its bare-bone resume on its (Yahoo! -Hosted) website.
Over time, IRS records show that Musk’s gift has shifted toward the intersection of his business interests and his home base in Los Angeles. In 2012, he donated $ 8,750 to neurosurgery researchers at the University of California, Los Angeles (Musk’s company Neuralink seeks to build a direct computer-brain interface), $ 10,000 to the Los Angeles Police Foundation and $ 25,000 to The Rose Foundation for Angelenos vs. Gridlock ( traffic is one of his bugbears).
In general, the foundation’s causes have fallen back from the center, including a $ 2,500 donation to the Transgender Law Center and $ 19,200 to the William J. Clinton Foundation in 2011. But he is also given to right-wing organizations like the Cato Institute, a $ 5,000 donation. in 2007 to “promote public policy based on individual freedom [and] limited government ”and the conservative National Taxpayers Union Foundation in 2005. You can search for each of them in the table below.
But all of those sums are dwarfed by donations to just three organizations: a $ 10 million donation to YC.org, a research group created by Silicon Valley accelerator Y Combinator (run by Musk’s partner at OpenAI, Sam Altman) with the goal of “At provide grants for other 501 (c) (3) initiatives and activities seeking to address the world’s problems, “and two donor-funded ($ 50 million) funds run by Vanguard and Fidelity. Together, these account for 86% of the reported task to date. The group that manages the Musk Foundation’s finances, the Catalyst Family Office in Menlo Park, CA, did not respond to press inquiries.
Musk follows a strategy that the ultra-rich in technology (and elsewhere) have been pursuing for years: Create a donor-funded fund to give your gift. These are like checking accounts for wealthy donors, where funds can grow tax-free and grants can be directed anonymously over time. Fidelity Charitable, now the richest nonprofit in the United States, calls this the “easiest and most tax-advantageous” way to donate to charity. They have grown so large that they are now a new source of Wall Street profits.
Nothing about this is unusual for Silicon Valley founders. As New York Times reported, include billionaires who have donor-funded Silicon Valley Community Foundation (with $ 13.5 billion in assets), Facebook’s Mark Zuckerberg, Netflix’s Reed Hastings, Twitter’s Jack Dorsey, Google’s Sergey Brin, Microsoft’s Paul Allen, and WhatsApp’s Jan Koum and Brian Acton.
These financial vehicles are essentially black boxes with no transparency or annual requirements. Critics argue Donor-advised funds distort the purpose of the tax code, which gives donors a general tax exemption immediately, leaving uncertain how and when these funds should be used.
The benefit for billionaires is clear: Money donated to such funds provides immediate tax relief by reducing taxable income and assets, especially in years of large unmanageable profits or major life events (such as a stock exchange listing or divorce). However, unlike family funds, which have to distribute a certain proportion of their assets each year, there is no time requirement for donor-funded funds. Their money can be stored for 100 years (or more). Funds that donate the money to non-profit organizations, even party political (501 (c) (4) under the tax code), can be anonymous gifts unrelated to the donor himself.
Of course, society should make it easy to give money away. But the lack of transparency and rules have prompted movements by politicians in Washington and California to bring donor-funded regulation in line with those that control other funds. So far, those bills remain in limbo.