Billionaires Giving Pledge: Serving Society or Evading Taxes

Amassing huge fortunes is one of the biggest driving forces for hard-working and striving. Thus many businessmen spend the most important years of their life making money. However, many billionaires decided to donate their wealth to charitable causes and initiatives that benefit society.

Some of them decided to bequeath their wealth to public institutions that manage it for charitable works, and some of them decided to establish institutions under his management for the benefit of charitable works and the fight against poverty.

Amazon founder Jeff Bezos announced that he will donate the majority of his fortune during his lifetime, becoming the latest in a series of billionaires who have pledged to donate most of their vast fortunes. He announced this in a joint interview on CNN with his girlfriend, Lauren Sanchez, on November 14.

 

Giving Pledge

Forbes estimates Bezos’s fortune at $124.1 billion. Bezos did not specify how or to whom he would donate his fortune, but said he and his girlfriend are building the capacity to do so.

He explained that the hard part is figuring out how to do it in a balanced way. He said: “It’s not easy. Building Amazon was not easy. It took a lot of hard work, a bunch of very smart teammates, hard-working teammates, and I’m finding—and I think Lauren is finding the same thing—that charity, philanthropy, is very similar.”

Bezos had previously been criticized for not signing the Giving Pledge, a campaign launched by Bill Gates, Melinda French Gates, and Warren Buffett to encourage billionaires to donate most of their fortunes to charitable causes.

So far, the Bezos Earth Fund has pledged to provide 30% of its $10 billion in capital to conserve nature and help it recover. The fund is seeking to form an alliance with African and European countries at the United Nations climate summit this year to increase efforts to reform Forests.

A statement from French President Emmanuel Macron’s office said last week that the Bezos Earth Fund, set up by Amazon founder Jeff Bezos, pledged $1 billion by 2030 to help protect forests and biodiversity.

Bezos also gave $510.7 million to NGOs last year. On November 12, Bezos and Sanchez announced an unconditional $100 million grant to singer Dolly Parton, whose charitable work that helped bring about the Moderna vaccine against Corona is always praised.

 

Famous Donators

Bill Gates decided not to give his children the majority of his fortune, estimated at $110 billion. Gates, who has maintained the top spot on Forbes lists between the first and second richest men in the world, is keen on charitable work.

With his wife, Melinda Gates, he founded a charitable foundation to fight poverty, which is working with all its energy to achieve humanitarian progress in many countries of the world, and the couple also contributed to signing a giving pledge in 2010 that encourages the world’s richest men to leave the majority of their wealth to charitable causes.

Mark Zuckerberg’s fortune is estimated at $71 billion, and after the birth of his first daughter Max in 2015, he and his wife, Priscilla Shane, announced their plan not to inherit their daughter, and to establish the Shane Zuckerberg Charitable Initiative, which contributes to many community activities in the fields of education and health.

Zuckerberg engaged in charitable work, intending seriously and legally not to bequeath his children, and published on his Facebook page a letter confirming that this community participation is minimal if compared to the volume of resources and global consumption and the participation of other wealthy people who intend to donate their wealth.

Michael Bloomberg is the mayor of New York and a pioneer of journalism and media, who withdrew from the 2020 US presidential election.

Bloomberg’s fortune exceeds $50 billion. He has only one daughter and plans to invest his entire fortune in philanthropy for a “better future.”

While signing the pledge of giving, he wrote a letter in which he said, “If you want to do something for your children to express how much you love them, there is one thing that is undisputed best, and that is to support institutions that will contribute to a better world for them and their children.”

Letters of pledge-to-give encouraged many rich people to get involved in this initiative, and the list reached dozens of people in that pledge, and some of them took other ways to establish independent institutions to manage their charitable vision, including Australian chef Gordon Ramsay, one of the wealthy owners who refused to bequeath their children. Even now, Ramsay is keen to book economy tickets for his four children while he and his wife are enjoying first class, sometimes on the same flight.

Ramsay’s intentions in doing so are not to “spoil” his children, saying that “the only thing I’ve agreed with Tana [his wife] is they get 25% deposit on a flat, but not the whole flat.” Ramsay sees that he has been lucky in the past 15 years, which is the sum of his years of experience and his obtaining of great fortune, and for that, he respects everything he has got, according to the Telegraph.

 

Tax Evasion?

Although billionaires seem to be generously donating billions of dollars to charities, they are at the same time avoiding a lot of millions in taxes. The Guardian published an article entitled, We don’t want billionaires’ charity. We want them to pay their taxes.

By donating shares, rather than selling shares and donating money, the billionaires avoid paying a capital gains tax of at least 20 percent. The tax system in the United States of America allows a reduction in the tax on income directed to charitable causes by up to 50 percent if the charitable organization is public and up to 30 percent if the charitable organization is private, such as Zuckerberg’s case.

In a report on its website, Forbes says that Zuckerberg’s initiative can be used to house billions in other revenues, and the initiative also allows his children to be spared from paying property taxes when they inherit his wealth.

Zuckerberg is among 138 individuals and families of the world’s wealthy who have signed the Giving Pledge, which requires giving away most of their wealth in an attempt to fix society’s problems. Like many tech giants, Facebook is one of a series of tax-avoiding companies, according to its fair share of society.

Microsoft, owned by Bill Gates, has been accused of avoiding £3 billion a year in tax by shifting profits between low-tax countries. In Britain alone, it reported revenue of around £1.7 billion in one year through sales of online software, on which corporate tax is not paid.

Larry Ellison, president of the tech giant Oracle and the ninth richest person in the world, has also promised to donate much of his fortune. So far, his company is among the largest companies accused by the US Congress of tax evasion.

Zuckerberg said he would not sell or give away more than $1 billion in Facebook shares a year at current stock prices. This means that he will not donate more than 9.27 million shares in one year, which is only about 2 percent of his total 462 million shares currently.