Here's an explanation I saw once before of how the wealthy save money by donating to their alma mater: 'So what an individual can do is offer to donate, say, 1

Here's an explanation I saw once before of how the wealthy save money by donating to their alma mater: 'So what an individual can do is offer to donate, say, 10% of his company to a charity. Let's say that the company did really well last year so that guy can easily find an accountant to say that 10% is worth $10M. So the guy has a $10M tax deduction he can use as he sees fit (subject to AMT and other shit, but you get the point). The guy also knows that last year's performance was a blip and if he repeated that 10% donation this year, he'd only get a valuation of $5M. In effect he's got an extra $5M from the valuation. When I was younger, I was on the young alumni board for the university I went to for undergrad and we used to see this all the time. Someone would donate property/illiquid securities/art/etc with an 'assessed' value of (say) $10M, but when the school went to sell it, they'd only realize (say) $3M in cash. But the guy would still get to keep the $10M tax deduction. To a guy like that, a $10M tax deduction could be worth $4m to $5M easily. I'm sure you're wondering, and yes this is in that 'gray zone' that's just millimeters from being tax fraud. However, the IRS rarely pursues these cases 1) because they are really hard to win, 2) the school doesn't really care b/c they still just got a $3M donation, and 3) the school isn't going to 'help' the IRS (beyond bare minimum compliance) b/c the school would have to give up the $3M.'