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I miss the good old days, when impetuous-genius, entrepreneur-chief executives such as Steve Jobs acted out in relatively charming ways. He parked his car in forbidden spots and drove on the freeway without license plates. He humiliated people, typically the ones who worked for him, the old-fashioned way: in private. Even when Jobs skirted the law — by backdating stock options for his employees, for example — his transgressions were more arcane and tedious than outrageous and infuriating.
All that has changed with the reigning bad boy of the technology industry and Jobs’s sole heir as multi-company founder and world changer, Elon Musk. He publicly insults all manner of impressive people, generally behaves as if society’s rules were written for others and might have run afoul of tax laws in a way that’s relatively easy to track.
The tax matter has to do with how much — or how little, rather — Musk appears to be giving to charity. It’s particularly galling because the tech titan is availing himself of a section of the tax code that encourages rich people to be philanthropic in exchange for lowering their taxes.
The New York Times splashed on its front page last weekend an account of how Musk very likely abuses rules governing nonprofits in two ways. According to records the Times scoured, Musk hasn’t met the minimum requirement for giving away 5 percent of the funds in his foundation for two consecutive years. He might have caught up by now — public records don’t show one way or the other — but if he hasn’t, he could be slapped with penalty payments by the Internal Revenue Service.
Not living up to required contributions isn’t a trivial matter. The rich can reduce the taxes they pay by shifting funds into nonprofit foundation accounts. The Times estimates that Musk could have saved $2 billion in taxes from one donation worth $5.7 billion of Tesla stock.
It also appears that Musk is using his philanthropic piggy bank to do the public-relations bidding of at least one of his companies, SpaceX. The Times reported that just hours after a SpaceX rocket exploded in Texas, spewing debris across Cameron County, Musk’s charitable foundation began spreading money around town. That would seem to be an instance of using tax-advantaged philanthropic dollars to boost the reputation, if not the prospects, of a profit-seeking business.
Odds are that Musk’s behavior is seedier than it is unlawful. Brian Mittendorf, an accounting professor at Ohio State University’s business school, says Musk’s actions likely test the spirit of the law rather than its letter. “We often have donors using charity to cover bad PR,” he says.
Murkier though, the professor says, is that Musk has moved money from his foundation to donor-advised funds. Once there, these funds can be disbursed without being tracked back to the individual donor. “Is moving money from a foundation to a donor-advised fund consistent with the spirit of the law?” he asks, rhetorically. “The disclosures show only where the money goes when the foundation wants you to know.”
The Times also detailed how Musk founded a nonprofit school named Ad Astra — Latin for “to the stars” — that initially educated several of his children and later those of SpaceX executives. The newspaper talked to two former executives who said they considered their children’s admission to the school a perk of employment.
Silicon Valley types — Musk was one for two decades before he decamped to Austin — have long been known for their lopsided lack of giving. A New York fundraiser who came out of the banking world told me years ago that however greedy and rapacious the lions of Wall Street were, they were far more generous than their newer-money counterparts on the West Coast. Several tech moguls have since become known for their largesse, notably Bill Gates, Marc Benioff and Mark Zuckerberg. Still, the titans of tech are better known for their gleaming buildings on the campus of Stanford University than for true acts of charity. (It would be tough to find a less needy beneficiary in the country than the Palo Alto campus that has been rich since it was endowed by its robber-baron founder.)
Musk has said little about his philanthropy and did not respond to a request for comment. But his apparent stinginess hasn’t stopped him from criticizing the contributions of other fabulously rich people. He recently went after Mackenzie Scott, the ex-wife of Amazon founder and Post owner Jeff Bezos, who has given away some $16 billion in the past five years. In a post that has since disappeared from X, which Musk owns, the impulsive enemy of woke-dom criticized Scott for giving to outfits that “deal with issues of race and/or gender.” He added gratuitously: “Super rich ex-wives who hate their former spouse’ should be listed among ‘Reasons that Western Civilization died.’”
It’s more likely that civilization as we know it will die because the most powerful and successful among us lack a basic sense of decency and civility — or the grace to follow the rules they think apply to everyone but them.
Is Elon Musk’s philanthropy just a form of self-help?
9
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18.03.2024
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I miss the good old days, when impetuous-genius, entrepreneur-chief executives such as Steve Jobs acted out in relatively charming ways. He parked his car in forbidden spots and drove on the freeway without license plates. He humiliated people, typically the ones who worked for him, the old-fashioned way: in private. Even when Jobs skirted the law — by backdating stock options for his employees, for example — his transgressions were more arcane and tedious than outrageous and infuriating.
All that has changed with the reigning bad boy of the technology industry and Jobs’s sole heir as multi-company founder and world changer, Elon Musk. He publicly insults all manner of impressive people, generally behaves as if society’s rules were written for others and might have run afoul of tax laws in a way that’s relatively easy to track.
The tax matter has to do with how much — or how little, rather — Musk appears to be giving to charity. It’s particularly galling because the tech titan is availing himself of a section of the tax code that encourages rich people to be philanthropic in exchange for lowering their taxes.
The New York Times splashed on its front page last weekend an account of how........
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