Friday, October 7, 2022
HomeWorldMusk makes $5.7 Billion Mystery Gift

Musk makes $5.7 Billion Mystery Gift

Elon Musk, it seems, is finally becoming a philanthropist on the scale of his billionaire peers.

The electric car and space mogul gifted $5.7 billion worth of Tesla Inc. stock to charity in the span of 10 days in November — many times more than he’s given away through his eponymous foundation in the two decades since it was founded. Where that donation is going is a mystery, but it’s just one more signal that the world’s richest person is taking philanthropy more seriously.

The decision by Musk, 50, to donate more than 5 million shares in the electric-car maker was disclosed in a regulatory filing Monday night, and comes on the heels of some of his biggest-ever philanthropic commitments — though nothing has come close to the scale of billions of dollars. It would also help reduce what he called the biggest tax bill in U.S. history.

The Musk Foundation in the past couple of years has made eight-figure grants to the city and local school system near his South Texas spaceport, a $100 million ready-made competition to fight climate change and millions of dollars to a pair of Covid-19 researchers.

Almost all of those recipients have been primarily working with Igor Kurganov, a professional poker player-turned-philanthropist, who Musk has recently enlisted to keep in contact with grantees and consider their proposals.

Kurganov, who has won more than $18 million during his poker career, is active in the world of so-called effective altruism, a philanthropic and philosophical movement that tries to have the greatest impact by carefully spending money to solve problems. Kurganov is the co-founder of Raising for Effective Giving, an organization created by a group of poker players that recommends “highly cost-effective charities.” He’s also an adviser to the Forethought Foundation, a project by the Centre for Effective Altruism.

Calls and emails to Kurganov haven’t been returned. Jared Birchall, the managing director of Musk’s family office, and Aaron Beckman, Tesla’s senior manager of stock administration, didn’t respond to requests for comment.

If Musk’s foundation is turning to effective altruism, it hasn’t showed yet, said Alixandra Barasch, an associate professor of marketing at New York University who has done research on the movement.

Musk doesn’t regularly publicize his gifts and tax documents that provide such disclosures have a years-long delay. What Musk has shared recently includes $10 million to Brownsville, Texas, near where SpaceX is located, to revitalize its downtown. So far, that money has gone to a grants program for local property owners, lighting projects and murals.

Saving lives is the primary focus of effective altruism, and “murals don’t do that much good in terms of the way it’s measured and defined in the movement,” Barasch said.

Other gifts from Musk, like the $20 million for Cameron County schools, the $100 million commitment for the XPrize Carbon Removal competition and $5 million for Khan Academy, similarly don’t have the focus that effective altruism typically does, Barasch said. But scale is also a factor, she said, and if Musk’s foundation is influenced by the philosophy, his giving could increase significantly.

“Looking at those amounts I’m like, ‘Holy moly, there’s millions of dollars, it’s a lot of money,'” Barasch said. But “it’s nothing compared to what he’s worth.”

Musk has a $227 billion personal fortune, according to the Bloomberg Billionaires Index. The donation of $5.7 billion of Tesla stock could be a sign that he’s picking up the pace of his giving — but it also doesn’t mean he’s actually sent much to charity yet.

The gift likely went to Musk’s foundation, said Brian Mittendorf, an Ohio State University professor who studies nonprofits. Given Musk’s previous use of donor-advised funds, or DAFs, the public might never know where much of the money is going unless he chooses to share it on Twitter or the Musk Foundation’s website, he said.

“We shouldn’t have to play this guessing game,” said Benjamin Soskis, senior research associate at the Center on Nonprofits and Philanthropy at the Urban Institute. “It’s a matter of public interest where the money is going because the scale is so large.”

Musk’s November gifting spree came around the time he was sparring with politicians on Twitter about his taxes. A large gift to charity would help reduce what he owed to the government. Days before he completed a series of stock sales worth more than $16 billion — much of which was to cover the exercise of almost 23 million options — Tesla’s chief executive tweeted he would pay more than $11 billion in taxes for the year.

In the weeks leading up to the gift, Musk also suggested he’d sell stock if the United Nations proved $6 billion would help solve world hunger, after the head of the organization’s World Food Programme called for billionaires like Musk to “step up.”

Musk’s penchant to be provocative and his large gift announcements have made it hard for the public to figure out what his intentions are. What the hiring of Kurganov and the recent $5.7 billion gift actually mean for Musk’s philanthropic future is a mystery, Soskis said.

“Your guess is as good as mine,” Soskis said of where Musk’s gift might end up. “If you look at what he’s done, there’s no discernible pattern.”

RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -

Most Popular

Recent Comments