this post was submitted on 09 Dec 2024
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What makes high-end philanthropy different from low-end philanthropy? Don't they both get the same tax cuts?
When you donate something to a charity (money or physical objects) do you then get to keep using the money or objects? No, you no longer have them in your possession - you have relinquished control of it.
The rich set up foundations called a Donor-advised fund
It is: a public charity, where an individual can make a charitable gift to enjoy an immediate tax benefit and retain advisory privileges to disburse charitable gifts over time.
Ask yourself why every single billionaire starts his or her own charity instead of giving to the thousands that already exist. Because once it is gifted like that it no longer belongs to them. They are literally donating money to themselves and avoiding taxes.
They probably do not get the same tax cuts: a "normal" person, making a paltry $250,000/year only reduces taxes by 24% of their giving, where the ultra-rich get 37%.
But the real difference is scale. A million people each giving $100 to their favorite charity is going to distribute that money more-or-less according to the community's overall priorities. One person giving $100M to their favorite charity has no connection to the broader community and social goals. They supercharge that one thing, which takes attention and resources from everything else.