BY FUAD ABDIRAHMAN
What would you think if you heard about someone giving away $1b dollars to charity? You would probably think they are the most humane people on this Earth. However charity from the ultra-rich is not what it looks like. The wealthy have transformed the act of charity to something more insidious and certainly not pure. To them, giving away is investing.
In 2014, Mark Zuckerberg, co-founder, chair and CEO of Facebook spoke about his plans to donate $1b of his huge empire to charity. The world buzzed and showered him with praises for his charitable donations. The Business Insider even went as far as calling him the planet’s best human being. However when you look past the press coverage and the guise of corporate social responsibility, one can’t help but wonder if Mr Zuckerberg is not trying to placate his critics. Facebook has been facing serious issues especially relating to monetization and lack of privacy of its consumers. Apparently these acts of charity should be enough to silence the critical voice in anyone’s head.
There is a need to follow up on these extraordinary charity donations. Most of the time rich people use charity causes as a means to avoid taxation. In 2014, Nicholas Woodman, the founder and chief executive of GoPro, publicly announced that he will be giving approximately $500m worth of GoPro stock to the Silicon Valley Community Foundation, an organization based in Mountain View, California, that would house the assets of the freshly formed Jill and Nicholas Woodman Foundation. At the time of the announcement GoPro was worth almost $3b.
Fast forward, 2018 and there is no trace of the foundation, they have no website or listed areas of focus. Apparently the foundation only has one beneficiary, an elementary school in California. There is no trace of the $500 million dollars either, which is really not surprising. In 2014, GoPro faced a huge tax bill but that was immediately solved when they donated to the Silicon Valley Community foundation. Not only was he saved from paying million of dollars to taxes but Mr Woodman probably cut his personal tax bill by half for years to come. The best part is, he also got his company great positive media coverage and if negative press is still good press, imagine what good free positive press can do for a business.Donor-advised funds enable the rich people to donate their assets whether in cash, company stock, real estate , crypto currencies or art to charity foundations without relinquishing control. This also allows the donors to be relieved of the burden to pay taxes immediately they give their assets to these sponsoring institutions but the institutions may have to wait for a long time for the funds and in some cases they never get it at all.
According to critics, the donor-advised funds have created the worst form of philanthropy today. Philanthropy has simply become a way that gives perks to the riches and a wave of uncertainty to the rest who don’t have cushy millions in the banks. It has enabled the rich the perk of privacy whereby they are not required to disclose how and why they choose to give to charity. They are free from public scrutiny and can fund whichever cause they choose whether it is political or not. This has allowed them the perk of obscuring their political activities and with President Trump in charge in the USA, it is getting more easier.
In their book, The philanthrocapitalism, the authors, Matthew Bishop and Michael Green delves into a belief on how the rich can save the world. Apparently there are some big problems in the world that only the rich can solve and make it right. This begs the question, do we really need the ultra rich to save the world. The truth about these charitable donations from the rich is that very few go into helping to make the world a better place. Less than 5% of these extremely huge donations go to helping the poor.
As we celebrate philanthropists who are clearly working and funding good causes, we must also open our eyes to those who have turned charity into businesses ventures and protection strategy. To them, philanthropy is simply moving money from their left to their right pocket.