r/Philanthropy • u/Sea_Background_9507 • 12d ago

Can anyone explain if the wealthiest billionaires claiming to give away all their wealth worth hundreds of billions in charity is actually legit cuz most of their donations are in stocks, that too usually to their own charitable foundation and ofc stocks are not liquid..so..

1 Upvotes
  • permalink
  • reddit

60% Upvoted

20 comments sorted by

View all comments

6

u/curiouscirrus 12d ago

Usually stocks are liquidated immediately upon receipt of the non-profit foundation. Even if they aren’t, it’s a non-reversible transaction. The foundation owns the assets after the donation and it’s up to them what they do with them.

1

u/Sea_Background_9507 12d ago

Yeah but most of the time most big donations in billions are donated to the foundation belonging to the person donating it so what's the point.. and it could also help in tax savings..

6

u/curiouscirrus 12d ago

The point is that they can no longer use the money for their own benefit. They can choose when and to whom to grant the money, but they can’t do anything with it that would benefit themselves. I’m sure there are some shady kickbacks and whatnot happening all the time, but legally at least that’s how it should work and if they violate it the IRS could come after them.

Edit: As far as tax savings, they get those when the money is transferred to the foundation, not when the foundation grants to recipients.

-2

u/Sea_Background_9507 12d ago

But they could also not use that money themselves technically cuz it'd be difficult to sell those billions of dollars in stocks at once. And we never know how it's used and if even used at all since they own the charity themselves. How can a charity liquidate 36 bn dollars for eg donated by someone like Bill gates even over a long period of time. And if it was possible then elon musk wouldn't have to take loans and investments from others to buy twitter.

5

u/CitizenDain 12d ago

Not true that "we never know how it's used". If is donated to a 501c3 charity they are required to make documentation annually that is publicly available that says where the organization issued grants to.

2

u/scientooligist 12d ago

Check the 990s of the foundations and you can see exactly where the dollars go. They are also required to pay out a specific percentage each year to charitable causes

4

u/jcravens42 12d ago

"but most of the time most big donations in billions are donated to the foundation belonging to the person donating it "

No, this isn't true. Not true of Mackenzie Scott, for instance.

And the Bill and Melinda Gates foundation does amazing work - and none of that money goes back to Bill nor Melinda.

-1

u/Sea_Background_9507 12d ago

Ok we don't know for sure but still assuming it's used for good purpose. But what about them and most other philanthropists donating in stocks instead of cash.

2

u/MorePizza_Please 12d ago

We do know for sure. The financials of foundations are required to be made public. And there is a lot of regulation surrounding spending.