Where Do Billionaire’s Donations Go?

There are thousands of billionaires around the world, and most of them live in the US with all things having been considered and taken into account. These billionaires enjoy the most luxurious lifestyles imaginable, but they are also known to give lots of money to charitable causes. In spite of the fact that this is the case, the money that these billionaires donate might not get used in the way that you think it does.

With all of that having been said and now out of the way, it is important to note that two of the biggest donors in the world are Warren Buffett and Bill Gates. Buffett has donated over $50 billion during his lifetime, whereas Gates has donated upwards of $38 billion. Bill Gates along with his wife Melinda collaborated with Warren Buffett to create something called the Giving Pledge, which is something billionaires can sign up for and commit to donating a majority of their wealth before they die.

While quite a few billionaires have agreed to the pledge, most of them have not yet exceeded fifty percent of their net worth in donations. Only two of these signatories have successfully managed to reach the goal of donating over half of their wealth.

Firstly, there’s the banker named T. Denny Sandford, who’s donated 53% of his overall wealth. On the complete other end of the spectrum is the man that invented Duty Free shopping, namely Chuck Feeney, who has donated around 99.98% of his wealth so far making him the most generous philanthropist out of all of the members included in this list.

Also, George Soros has given away 73% of his overall net worth, despite not being a member of the giving pledge. He appears to be making these donations completely of his own volition, which just goes to show that different billionaires can have a completely different approach based on what they are attempting to accomplish.

If we were to take a look at the list of billionaires that Forbes puts out, it becomes apparent that most billionaires have given away around 12% of their wealth on average. Jeff Bezos doesn’t even come close to this average, since he has only given away around 2.3% of his massive $117 billion net worth so far.

One heartening sign is that charitable donations from rich individuals has been going up. However, they might be donating because of the fact that this is the sort of thing that could potentially end up allowing them to take advantage of tax deductions that can occur if they donate to charity.

Around 33% of charitable deductions are going towards households that bring in over $1 million per year. This means that a small group of people are making major decisions pertaining to the issues that society tries to handle. 28% of these donations from billionaires go to education, 12% go to human services and the rest is split up between various other causes.

Many billionaires donate to causes that they are directly associated with. For example, a billionaire by the name of Phil Knight donated half a billion dollars to the University of Oregon, which happened to be his alma mater. Michael Bloomberg donated even more, touching $750 million, which he put towards the establishing of charter schools around the country.

35% of donations from billionaires go to private foundations which don’t even have to use the money for anything charitable anytime soon. Instead, they spend about 5% of the money they receive per year, while billionaires get to pocket the tax deductions instantaneously.

This just goes to show that billionaires are not actually doing as much good as they say they are. Instead, it appears that they only donate so that they can pay lower taxes than might have been the case otherwise, and their donations take many years to provide society with any real benefits.

Photo: Unsplash.
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