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>> The Musk Foundation in particular has donated less than 1% of the "charities" assets That is how almost all endowments work -- they give away their interest
by TuringNYC 4y ago
>> The Musk Foundation in particular has donated less than 1% of the "charities" assets
That is how almost all endowments work -- they give away their interest income or other income, not the principal, this way they can theoretically last forever. In the past, this was easier since you could earn 5% or 7% interest on a 1-yr Certificate of Deposit. Now, rates have been 0% so charities have to either dig into principal and risk their longevity or give out very little.
- boringg 4y agoOh but most people think how it works is you give away all your money and if you don't do that you aren't very charitable. However the smart way to donate is keep principal alive and any money that money makes it goes to the charity therefore ensuring money in perpetuity. You bring up the challenge in the current environment.
- hcknwscommenter 4y ago"smart"? I'm not so sure. That assumes doing good deeds later (forever later really) is more valuable than doing them now/soon.
- boringg 4y agoId say being able to fund people to work on a problem over a long haul has a lot of value. Theres obvious short term needs and funding that is also important. I guess it also depends on how that money is making money
- TuringNYC 4y ago>> "smart"? I'm not so sure. That assumes doing good deeds later (forever later really) is more valuable than doing them now/soon. I can see both sides of the argument here. I think we can at least appreciate many instances of endowments. A great example might be universities...some of which have been around for hundreds of years c/o endowments. It also allows individual programs and facilities to be funded forever so they do not need to fight yearly for budgets. https://www.harvard.edu/about/endowment/ https://www.harvard.edu/about/endowment/