Elon Musk donated roughly $US5.7 ($8) billion in shares of Tesla to an unnamed charity late last year, according to new filings with the SEC and a report from the Wall Street Journal. But one big question remains: Who got the money?
Right around the same time as his newly publicized charitable donation in late 2021, Musk sold about $US16 ($22) billion worth of Tesla stock, something he claimed would create one of the larges tax bills in history for the billionaire. But the revelation of Musk’s large charitable donation might change that, given the fact that money handed to many charities can be written off at tax time.
The $US5.7 ($8) billion in donations were made in five payments between November 19 and November 29, 2021, according to the SEC documents, and facilitated by a trust. Donations of stock are valued for the IRS based on their worth at the time of donation, but that same $US5.7 ($8) billion worth of stock is only worth about $US4.4 ($6) billion today given Tesla’s plunging stock price.
The two most likely candidates for Musk’s donations are the billionaire’s personal charity foundation, and the United Nations World Food Program — the latter of which made headlines in late October when its director said Musk could save 42 million people from starvation with just 2% of his wealth.
“The governments are tapped out. This is when the billionaires need to step up now on a one-time basis — $US6 ($8) billion to help 42 million people that are literally going to die if we don’t reach them. It’s not complicated,” UN executive director for the World Food Program, David Beasley, told CNN at the time.
Musk replied on social media that he’d donate to the program if it could solve world hunger for good, something that Beasley never claimed could be done with a one-off donation. But the World Food Program declined to tell news organisations if Musk has made any donation.
The other likely possible recipient of Musk’s money is his own foundation, which was set up in 2002. The Musk Foundation awards grants for things like renewable energy research and artificial intelligence development, among other things, though the design of its website is almost laughably bad and Musk has been incredibly stingy about giving money to his own charity in the past.
But, again, wherever he put his money, this is likely to offset Musk’s tax bill for 2021, according to the Wall Street Journal:
Donations of appreciated stock are particularly attractive for wealthy people. The forgone capital gains aren’t taxed. The value of the stock is a charitable deduction, subject to limits. And the stock comes out of the person’s taxable estate.
Elon Musk is currently worth about $US242 ($336) billion, according to Forbes, making him the wealthiest person on the planet. Amazon’s Jeff Bezos, the second wealthiest, is currently worth about $US179 ($248) billion.