Billionaire Charity Isn't Real: The Myth of Elite Philanthropy
- Kevin Lankes
- 1 day ago
- 10 min read
Watch on YouTube: https://youtu.be/jAzp6voksWo
Probably the single loudest argument against government benefits, welfare, food stamps, and the social safety net, is the idea that somehow we don’t need government to solve the problems of society because rich people will just do it for us. They give a whole lot of money away to charity, right? So therefore, they’ll voluntarily recreate a social safety net so that we don’t need a government benefits system. Billionaire philanthropy will feed the poor, they’ll take care of the elderly, and give so much to charity that we won’t need any of the government services that we have now. All through private funds and the goodness of their hearts.
If this is also how you feel, or maybe you’re a little suspicious at this point because you clicked on the video and you just want to know the actual numbers, then I’d like to introduce you to the real data on billionaire philanthropy. And you definitely don’t have to take my word for it, because I’ve repeatedly researched this exact thing for various projects over the course of my career, including once for an article in a major lifestyle publication where I worked as a senior editor.
There is so much research surrounding this today that there’s simply no real question about it anymore. The math is mathin’. The numbers are very clear. Rich people’s charitable giving does not work like they want you to think it does.
How do I know this? Let’s talk turkey. Rich, billionaire turkey. I do have to say up front that there are some people who do genuinely try to give away a lot of money to do some effing good, but the vast majority of the ultra-wealthy are simply purchasing the image that they’re doing something good in the world. And we’ll talk about that in a minute.
Forbes tracks the charitable giving of the richest 400 Americans. They put out an annual report about it. The latest 2025 report found that the 400 richest people in the U.S. gave away just 4.6% of their total net worth. This number represents their collective giving over their entire lifetime, not just like, in a year. That’s genuinely shocking, because if you listen to all the PR initiatives they put out about all the charity they’re doing you’d probably think the amount of money they give could absolutely do what all the people who argue against government spending are saying it could. I personally spend more than 4.6% of my net worth on books and video games in like a week. Like every week. And a whopping 40% of these folks have given away less than 1% of their net worth.
Way, way, way worse than that though, we have to talk about where this money actually goes. And that’s going to make you really sad. As of 2022, just under half of all donations go to private foundations and donor-advised funds, which are then supposed to give out the money. These are two entities created by the wealthy donors themselves. 41 cents out of every dollar is donated by a wealthy person to themselves. And you’re thinking, well, the foundations have to give the money away, right? Kind of. There are mandated donation amounts. For instance, private foundations are required to give away just 5% of their assets each year. Donor-advised funds have no requirements for giving away anything. So billionaires are handing money from one hand to the other, and then the government, i.e., us, the taxpayers, are handing them hundreds of billions of dollars in tax cuts each and every year for their supposed charitable giving. And everyone looks at them and thinks, wow what really nice people they are.
Under 10% of households use the charitable deduction when filing their taxes, because nobody else qualifies. So no one gets money back from charitable giving except for the wealthiest Americans. Regular, middle-class and impoverished people are subsidizing billionaire donations. I’m not even sure if it’s a subsidy in any meaningful way because they’re actually just giving their donation money to themselves, so we’re not returning anything, and instead just handing them more money in exchange for at a minimum, a 5% donation in an entire year. Alternatively, private foundations can themselves just give their required donation to a donor-advised fund, which has no required payout. Totally insane.
And donor-advised funds are hugely popular now, no surprise. Seven out of the ten top recipients of philanthropic donations in America in 2021 were donor-advised funds. The four largest of those funds were directly associated with gigantic corporations like Schwab, Vanguard, and Fidelity. And a considerable amount of all this money donated from donor-advised funds just goes to other donor-advised funds. And the big financial groups like those I mentioned are making huge amounts of money managing these funds and they’re lobbying Congress to make sure they don’t crack down on them.
Okay, so you might recall that there’s this group of billionaires who signed the giving pledge, which is a big public pledge that was spearheaded by Bill Gates and Warren Buffet. The stated goal of the pledge is for the mega rich people who sign it to give away over half of their wealth throughout their lifetimes. Maybe you’re thinking that this group of truly kind-hearted philanthropists is going be able to turn things around. And you’d be wrong. Because 68% of giving pledge donors are also donating their money to private foundations and donor-advised funds. The nature of the giving pledge itself may also be completely implausible for any of them to complete. Giving away 50% of your assets is hard because of the mechanism of billionaire wealth that manifests in compound financial hoarding. Their total assets are just constantly skyrocketing. So what’s half of an ever-increasing amount? Recently, over about a ten-year period, Mark Zuckerberg, who is a signer of the pledge, saw his net worth rise 1,382%. Can you even imagine having your salary grow by over 1,000% in a decade? What do you get, if you get a cost of living raise at all? Maybe 50% percent in a decade? A NerdWallet survey tells us that over the last year, the median pay increase was 5%, so five times ten is fifty. The wealthiest 400 Americans, the Forbes 400, went from a collective net worth of $1.2 trillion to $6.6 trillion, just since last year. That jump, in a single year. Good f*cking god people.
I really think that we just don’t have the capacity to truly comprehend the amount of money we’re talking about. Elon Musk will likely soon be a trillionaire. If you made one million dollars every single day, in order to amass a trillion dollars, it would take you 2,700 years. If you laid a trillion dollars end to end in one-dollar bills, you could reach the sun from Earth, and still keep going. Elon could buy all major American sports and still have half his wealth left over, and I mean the entire NBA, NFL, MLB, and NHL. He could pay off the entire national debt of South Korea. I just don’t think humans are built to even fathom this kind of wealth.
And yet, the argument remains; rich bazillionaires could theoretically and magically donate money to charity and pay to fix the immense societal problems of our time, and that would take the onus away from government spending, and people who want the government to spend less and to be smaller would be happy.
Okay, so what are the actual reasons that this doesn’t work the way we’re told by the super wealthy? Because again, what about like Elon Musk? Couldn’t the richest person in the world single-handedly solve a lot of major social problems if he wanted to? Yeah, he definitely could. But he doesn’t. And that’s the point.
Elon could personally donate enough money to solve world hunger. And that’s not just a random example. Back in 2021, he tweeted that he would donate the money to solve world hunger if the United Nations could tell him exactly how they’d use it to feed hungry people around the world. So the UN World Food Program came up with a detailed proposal for just $6 billion of his Elon bucks to feed people who were in imminent danger. And of course, Elon never responded or donated anything after being handed a detailed plan. I’m not picking on Elon specifically about this problem, he’s just very visible as the richest man in the world, and very very goofy, and he’s going to let us examine this elite philanthropy issue better than someone else might. And in many ways, he’s a perfect example.
Researchers have analyzed the patterns of wealthy philanthropy enough to figure out that there’s rarely any actual charity happening here. Instead, what billionaires are doing is exchanging dollars for other forms of capital, like social and political capital, that they can then use to benefit themselves. It’s always quid pro quo with people who’ve dedicated their lives to amassing the most amount of wealth and resources possible. Charity requires a quid without a quo, and you just never see that with charitable giving from billionaires. There are numerous studies now that show us how wealthy giving is intimately entwined with the accumulation of power, including this one from the International Journal of Management Reviews, and I’ve put others down in the didgeridoo so you can dig deeper into the citations for that. Because it’s a big claim, and a big deal, that the research is telling us billionaires are basically lying. They’re not giving away money to charity, they’re purchasing more power, and coming away with more money as a result.
The NYTimes has written about this, using Elon Musk as an example. The Times reporting found that Elon’s charitable giving is "haphazard and largely self-serving - making him eligible for enormous tax breaks and helping his businesses.” His personal foundation that’s supposedly built for the express purpose of giving away money to further the future of science and tech failed to meet its required giveaway threshold three years in a row. So even when a foundation has a required minimum donation of 5%, you can just not do that and face no consequences. So like, even when billionaires are pretending to do charity they don’t actually do it right.
We can use Elon again for some real-world examples of how billionaire giving works in practice to enhance a rich person’s own interests. During a three-year period from 2020-2023, Elon donated around $7 billion in stock to the Musk Foundation. This gave him a return of $2 billion dollars in tax deductions, so $2 billion that you and I paid him.
Alright, that’s irritating, but who does the Musk foundation give its money to? A big part of donations go directly to a nonprofit school Elon founded called Ad Astra. You might think that’s at least somehow positive until I tell you that five of Ad Astra’s students were Elon’s own kids in its first year of operation, and other kids there belonged to top SpaceX executives. Ad Astra is also on campus at SpaceX in Texas and though technically public, is not practically accessible by the public in any meaningful way.
And maybe you’re like, well he deserves to give his own kids the education he wants, I guess, even though the rest of us can’t do that and we’re paying him the money he’s using in part to do so. But another fun place the Musk Foundation gives its money is to a United Nations program called Giga. And Giga helps connect developing nations and rural communities access the internet. That’s a cool thing, right? Except that the access that’s being given leads them directly to becoming customers of Elon’s own company, Starlink.
Alright, just so you don’t think I’m deliberately picking on Elon, I’ll pick on Creamsicle Caligula for a minute. Let’s take the trump foundation. Do you guys even remember that at this point? Many, many trump scandals ago, a lawsuit led to the courts shutting down the trump foundation and banning trump from operating any business in the state of New York for two years, because the evidence shown through court documents proved that trump was using the foundation as his own personal piggy bank. It was “little more than a checkbook to serve Mr Trump’s business and political interests.” Of course, the appellate court lowered the fines involved and also stayed the business ban. Because we have a real problem holding wealthy people accountable for anything.
Which is a big reason why lots and lots of people keep telling you that billionaire charity is the way to go and should replace government benefits, even while every shred of evidence allows us to clearly see that wealthy donors are simply practicing self-serving pseudo-philanthropy that garners tax breaks and bolsters their personal businesses. That’s where the genuine truth about rich people charity actually lives. It’s once again a mechanism for accumulating wealth and power. The ultra wealthy are paying themselves pretend donations and then we’re individually through our taxes paying them more money on top of that. Cool cool cool.
Even the way that charities capitalize on this is just so gross. It’s so cynical. At the end of the year, the development arm of every 501c3 in the country comes out and basically says, what’s up billionaires, we know this is about when you’re starting to look around at places to use to cheat on your taxes, so why not cheat with us? Dress up that new scanner in the pediatric cancer ward in some lingerie and see if Zuckerberg is into it. My guess is he would be.
It’s time to stop being fooled by the messaging from their side. Let’s stop pretending that we should let the wealthy just voluntarily fix everything. We have the data, they’re not doing that. It looks like they’re helping sometimes, though, and they’re very very public about those particular moments. And that is intentional.
And, for the most part, that visibility is exactly the point; they want you to think what they’re doing works. They want you to think nice things about them, all while they insist that you don’t need government or public services that every other developed nation on Earth takes for granted, because that translates to less taxes and more profits for them.
If we want to fix the big social problems of our day, we’re going to have to recognize that the richest people in the world are one of the biggest of those problems. Billionaire charity is never going to provide the same services that government can, just by virtue of being so individualized and preference-based to begin with. And then there’s the fact that it’s not even really charity in the first place.
The next time someone tells you we should trust billionaires over the government, don’t argue with them. Show them this video. Point out the data. Show them how their choices affect real people. Research tells us that appealing to emotions is the best way to change someone’s mind, even when the data can’t. So keep that in mind, and use it to do some f*cking good wherever you personally can in the world. I’ll see you next time.
Sources:
https://onlinelibrary.wiley.com/doi/full/10.1111/ijmr.12247?campaign=wolearlyview#ijmr12247-bib-0005
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