Elon Musk's Charitable Foundation Is The 28th Richest In The World, Is 'Haphazard And Largely Self-Serving'
Until recently, Elon Musk was listed as the wealthiest person in the world. As many wealthy folks do, Musk has set up a tax shelter “foundation” to oversee the Tesla and SpaceX CEO’s charitable giving. There’s just one problem, he’s not really doing any giving. The foundation, despite controlling over $7 billion in assets, has no employees, and largely gives to causes with direct links to Mr. Musk. According to reporting from the New York Times, the foundation gave just $160 million in aid in 2022, which was $234 million less than it was legally required to give. 2023 records haven’t been made public yet.
Walter Isaacson On Elon Musk(s)
The Musk Foundation’s massive endowment, largely given by Elon in the form of stocks, makes it the 28th largest charitable foundation in the world, just behind the W.K. Kellogg Foundation Trust, which paid for the elementary school I attended. It’s a bigger foundation than the John D. and Catherine T. MacArthur Foundation. Those foundations hire grants managers, investment officers, and managing directors of programs, but Elon Musk is the only listed employee of the foundation, serving on the board alongside a pair of volunteers. NYT says one of those volunteers is putting in just six minutes of work per week on foundation activities. Three people to manage a $7 billion charitable fund? Something sounds fishy here.
More from NYT:
Among the donations the Musk Foundation has made, there was $55 million to help a major SpaceX customer meet a charitable pledge. There were the millions that went to Cameron County, Texas, after the rocket blew up. And there were donations to two schools closely tied to his businesses: one walled off inside a SpaceX compound, the other located next to a new subdivision for Musk’s employees.
The foundation’s website, which lists no contact information and doesn’t allow applications for grants, claims it is interested in “science education, pediatric health and clean energy.” The foundation’s gifts, meanwhile, seem to be haphazard and without focus. The foundation has helped groups tied to him personally, including a food charity run by Kimball Musk. Elon did found a non-profit school with Musk Foundation funds. The school, a math and science-focused school was housed in Musk’s Bel-Air home, taught fourteen students in 2014, five of them Musk’s own children.
The Musk Foundation also gave $5 million to a UN program to provide internet access to rural schools. SpaceX gained at least two national-level contracts to provide StarLink internet as a result. Pennsylvania billionaire Jared Isaacman chartered a SpaceX trip to orbit, claiming the flight would “raise $200 million for St. Jude Children’s Research Hospital. When he landed and was still short of the figure, The Musk Foundation pitched in $55 million. Isaacman later committed to paying for three additional SpaceX flights.
As with everything Musk does, the charitable donations not related to making him more money have motivations that seem to be largely clout-based. Again, from NYT:
But Mr. Musk’s giving often seemed guided by Twitter, where he made splashy promises in response to challenges from internet celebrities: He gave $1 million to plant trees after prompting from the YouTuber Mr. Beast and $1 million to help small businesses during the Covid-19 pandemic after a push from Dave Portnoy, the founder of Barstool Sports.
Remember when Elon promised to clean up the water in Flint, Michigan?
The City of Flint sent Musk a four-page letter asking for funding to update the water delivery infrastructure, and begin replacing aging pipes. The city also begged Musk to expand his business operations to Flint in an effort to provide jobs for its citizens. The Musk Foundation donated $1 million to community schools to pay for water filters and buy laptops for students. An additional $125,000 was given to a youth-organized charity which sent backpacks full of supplies to Flint students. The Musk Foundation has not listed a gift related to the Flint water efforts since 2019.
By giving $5.7 billion worth of Tesla shares to The Musk Foundation in 2021, Elon Musk saved himself at least a couple billion dollars on his own personal tax bill that year. Being that it’s pretty much just him on the board of the foundation, this tiny hit to his personal wealth didn’t come with any associated dilution of his ownership of the company. The Musk Foundation votes with Elon, because The Musk Foundation is Elon. Instead of using this tax burden reduction loophole to actually help the world, he gamed the system to help himself, and The Musk Foundation isn’t even meeting the minimum obligations of a foundation, and particularly not of a foundation of its size.
Tax law requires foundations to give away five percent of their assets each year, meaning The Musk Foundation needs to give away hundreds of millions of dollars every year. In 2021 the foundation was short of the minimum by $41 million, and an extra $193 million in 2022. I’d bet that $234 million shortfall would have gone a long way toward fixing Flint’s water.
