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Billionaire philanthropy is mostly just another tax shelter. https://thehighasia.com/private-charity-just-another-scam-for-1-rich/ https://thehighasia.com/priv

Billionaire philanthropy is mostly just another tax shelter. https://thehighasia.com/private-charity-just-another-scam-for-1-rich/ https://thehighasia.com/private-charity-just-another-scam-fo...

zie 4y ago
Once the money is in the foundation or DAF, you can't get it back out again to use for personal gain, and you really can't use it to pay yourself. If you make a foundation, you can pay people to run it, and they can be friends of yours, even family members, but it's not like you can pay them ridiculous amounts of money compared to other foundations. That would be illegal. That's not to say some people don't try that, I'm sure. But if they abuse it to much, they will likely get caught eventually. Certainly some probably pad just a little, and nobody raises a fuss, but it's not like some instant magic hide from estate tax thing. It's more like, hire your kid that's to stupid/lazy to work for a living. Sure it can be a totally cushy job. It's not any different than mom and pop's grocery store back in the day hiring their idiot kids to make sure the back wall of the store doesn't fall over. Sure it's a mostly pointless job, but it's not illegal to do that. Since it's their money to control, they can of course use it to prop up some particular viewpoint, but it mostly washes out, since both aisles of the political camp can and do stuff like that. So that article is mostly just uninformed crap, sorry.
- fallingfrog 4y ago
  Perhaps some references from such dens of leftism like Bloomberg and the New York Times would help? https://www.nytimes.com/2018/08/03/business/donor-advised-funds-tech-tax.html https://www.nytimes.com/2018/08/03/business/donor-advised-fu... https://www.bloomberg.com/news/features/2022-10-03/rich-use-tax-loophole-to-get-deductions-now-for-donating-later#xj4y7vzkg https://www.bloomberg.com/news/features/2022-10-03/rich-use-... Archived links: https://archive.ph/n1AQy https://archive.ph/n1AQy https://archive.ph/EPyJ2 https://archive.ph/EPyJ2 From the bloomberg article: "The Mercers and the Allenders are among a small but growing number of wealthy Americans who’ve discovered how to bypass rules designed more than a half-century ago to ensure philanthropists stay accountable for the billions of dollars in tax breaks they receive each year. The key is the donor-advised fund, or DAF, which is so flexible that charitable dollars can sit in one indefinitely, and so opaque that no one needs to know either way. ... In a study of more than 2,600 DAF accounts, the Council of Michigan Foundations found that the majority of donors paid out less than 5% of assets in 2020. More than one-third gave nothing to charity at all. The biggest sponsors of the funds have rebuffed calls to release that kind of account-level data, even as the number of accounts has swelled to more than 1 million. As of 2020, DAFs held almost $160 billion, an 85% increase in four years. Although the industry says it’s paying out more than one-fifth of its assets a year in aggregate, the reality is probably less: Some of the biggest recipients of grants from the funds are other funds, as donors shift money from one sponsor to another."
  - zie 4y ago
    Yes, the money can sit in a DAF almost forever, but the original donation or any proceeds from the DAF can not be used for anything BUT charitable purposes. The money WILL eventually end up put to work for a charitable purpose. A DAF *IS* a non-profit itself. It's bound legally to only disperse the funds to other charitable purposes. So your entire complaint is, the donor gets the tax write off the day they donate it to a DAF, but the funds in the DAF might take a while before getting put to work for a charitable purpose? Why is that a bad/terrible thing?
- pmoriarty 4y ago
  "If you make a foundation, you can pay people to run it, and they can be friends of yours, even family members, but it's not like you can pay them ridiculous amounts of money compared to other foundations. That would be illegal." They can direct their foundations to give billions of dollars to corporations controlled by their friends, who use that money (after taking a cut, of course) to do whatever it is the foundation was set up to do. This is one of the things the Bill and Melinda Gates foundation was accused of doing: enriching their friends' corporations. Of course, their friends can do the same in return, or compensate them in other ways, in money or influence.
  - zie 4y ago
    Please understand the law, once it's in a Foundation or DAF, you can't then send the money to corporations, only to charitable purposes. For a Foundation, it's more limited than that, as you have to spend the money to fulfill the foundations purpose for existing.
    - pmoriarty 4y ago
      Charities buy products and services all the time... for charitable purposes, of course. That money they spend goes to corporations. That's what I meant when I said "They can direct their foundations to give billions of dollars to corporations controlled by their friends, who use that money (after taking a cut, of course) to do whatever it is the foundation was set up to do." It's not "given" in the sense of a gift, but given as part of a trade. The corporations they purchase from still profit.
      - zie 4y ago
        OK, You are correct, they can buy goods and services from corporations, but this will ONLY apply to Foundations, as DAF's are different. Plus, it's not like these foundations can get away with over-paying for goods and services. They have to file returns to the IRS, if the expenses start to look ridiculous, they can audit, just like they can audit anyone else. DAF's are not controlled by the contributor, so this does not apply to DAF's AT ALL. So I still don't see why this is somehow bad.

Billionaire philanthropy is mostly just another tax shelter. https://thehighasia.com/private-charity-just-another-scam-for-1-rich/ https://thehighasia.com/private-charity-just-another-scam-fo...

zie 4y ago

Once the money is in the foundation or DAF, you can't get it back out again to use for personal gain, and you really can't use it to pay yourself. If you make a foundation, you can pay people to run it, and they can be friends of yours, even family members, but it's not like you can pay them ridiculous amounts of money compared to other foundations. That would be illegal. That's not to say some people don't try that, I'm sure. But if they abuse it to much, they will likely get caught eventually. Certainly some probably pad just a little, and nobody raises a fuss, but it's not like some instant magic hide from estate tax thing. It's more like, hire your kid that's to stupid/lazy to work for a living. Sure it can be a totally cushy job. It's not any different than mom and pop's grocery store back in the day hiring their idiot kids to make sure the back wall of the store doesn't fall over. Sure it's a mostly pointless job, but it's not illegal to do that. Since it's their money to control, they can of course use it to prop up some particular viewpoint, but it mostly washes out, since both aisles of the political camp can and do stuff like that. So that article is mostly just uninformed crap, sorry.

fallingfrog 4y ago
Perhaps some references from such dens of leftism like Bloomberg and the New York Times would help? https://www.nytimes.com/2018/08/03/business/donor-advised-funds-tech-tax.html https://www.nytimes.com/2018/08/03/business/donor-advised-fu... https://www.bloomberg.com/news/features/2022-10-03/rich-use-tax-loophole-to-get-deductions-now-for-donating-later#xj4y7vzkg https://www.bloomberg.com/news/features/2022-10-03/rich-use-... Archived links: https://archive.ph/n1AQy https://archive.ph/n1AQy https://archive.ph/EPyJ2 https://archive.ph/EPyJ2 From the bloomberg article: "The Mercers and the Allenders are among a small but growing number of wealthy Americans who’ve discovered how to bypass rules designed more than a half-century ago to ensure philanthropists stay accountable for the billions of dollars in tax breaks they receive each year. The key is the donor-advised fund, or DAF, which is so flexible that charitable dollars can sit in one indefinitely, and so opaque that no one needs to know either way. ... In a study of more than 2,600 DAF accounts, the Council of Michigan Foundations found that the majority of donors paid out less than 5% of assets in 2020. More than one-third gave nothing to charity at all. The biggest sponsors of the funds have rebuffed calls to release that kind of account-level data, even as the number of accounts has swelled to more than 1 million. As of 2020, DAFs held almost $160 billion, an 85% increase in four years. Although the industry says it’s paying out more than one-fifth of its assets a year in aggregate, the reality is probably less: Some of the biggest recipients of grants from the funds are other funds, as donors shift money from one sponsor to another."
- zie 4y ago
  Yes, the money can sit in a DAF almost forever, but the original donation or any proceeds from the DAF can not be used for anything BUT charitable purposes. The money WILL eventually end up put to work for a charitable purpose. A DAF *IS* a non-profit itself. It's bound legally to only disperse the funds to other charitable purposes. So your entire complaint is, the donor gets the tax write off the day they donate it to a DAF, but the funds in the DAF might take a while before getting put to work for a charitable purpose? Why is that a bad/terrible thing?
pmoriarty 4y ago
"If you make a foundation, you can pay people to run it, and they can be friends of yours, even family members, but it's not like you can pay them ridiculous amounts of money compared to other foundations. That would be illegal." They can direct their foundations to give billions of dollars to corporations controlled by their friends, who use that money (after taking a cut, of course) to do whatever it is the foundation was set up to do. This is one of the things the Bill and Melinda Gates foundation was accused of doing: enriching their friends' corporations. Of course, their friends can do the same in return, or compensate them in other ways, in money or influence.
- zie 4y ago
  Please understand the law, once it's in a Foundation or DAF, you can't then send the money to corporations, only to charitable purposes. For a Foundation, it's more limited than that, as you have to spend the money to fulfill the foundations purpose for existing.
  - pmoriarty 4y ago
    Charities buy products and services all the time... for charitable purposes, of course. That money they spend goes to corporations. That's what I meant when I said "They can direct their foundations to give billions of dollars to corporations controlled by their friends, who use that money (after taking a cut, of course) to do whatever it is the foundation was set up to do." It's not "given" in the sense of a gift, but given as part of a trade. The corporations they purchase from still profit.
    - zie 4y ago
      OK, You are correct, they can buy goods and services from corporations, but this will ONLY apply to Foundations, as DAF's are different. Plus, it's not like these foundations can get away with over-paying for goods and services. They have to file returns to the IRS, if the expenses start to look ridiculous, they can audit, just like they can audit anyone else. DAF's are not controlled by the contributor, so this does not apply to DAF's AT ALL. So I still don't see why this is somehow bad.