Elon Musk’s Latest Innovation: Troll Philanthropy

The richest people on Earth normally dedicate a portion of their vast resources to charity. At least, that’s the deal and the expectation.

Jeff Bezos, until very recently the richest human in the world, has dutifully applied himself to the task, giving money to food banks and homeless families while pledging to donate 10 billion of the fortune he earned to through retailer Amazon to combat climate change.

The richest human today, Elon Musk, has taken a different path. For example, he had a public fight with the director of the World Food Program (WFP) on Twitter, where he posted: “If the WFP can describe in this Twitter thread exactly how $ 6 billion would solve hunger worldwide, I will sell Tesla shares right now and I will. “

He also conducted an online survey in which he asked whether he should sell 10 percent of his Tesla shares, so he could pay taxes on at least part of his fortune, as most people do without taking a survey first. Plus, of course, there’s the continued insistence that his money-making efforts, operating both the electric vehicle maker Tesla and the space company SpaceX, are already improving humanity and he thinks we should thank him.

Musk practices “troll philanthropy.”

This is how Benjamin Soskis, a senior research associate at the Urban Institute’s Center for Nonprofits and Philanthropies, called it, noting that Musk seems to have fun with his new strategy.

“He doesn’t seem to care much about using his philanthropy to gain popular favor,” Soskis said. “In fact, he seems to enjoy using his identity as a philanthropist in part to antagonize the public.” Before this year, one estimate put his donations at 100 million, a lot by almost any standard except for billionaires like Musk.

Most wealthy people do the opposite. They use philanthropy to polish their image or distract the public from the business practices by which they obtained their enormous wealth in the first place.

When, how and why the ultra-rich decide to donate their fortunes matters more than ever because there is so much money that is concentrated in their hands and only such a small part of it can be taxed under the current rules. Society is to some extent stuck today depending on the voluntary outlays of those with the greatest resources.

“The idea that philanthropy, that any individual, has enough money to affect something on a global scale is a very new phenomenon,” said Homi Kharas, a senior partner at the Center for Sustainable Development at Brookings in Washington. Most billionaires have “accumulated their wealth because the world economy is now globalized, but to sustain a globalized world economy, we need to have more inclusive growth.”

There are many different types of donors, like MacKenzie Scott, Bezos’s ex-wife, who has focused her billions on diversity and equality. There are the self-proclaimed “effective altruists,” such as Facebook co-founder Dustin Moskovitz and his wife, Cari Tuna, who are part of a movement seeking evidence-based approaches to finding causes where their money is best used. And there are the traditional ones, like Bill Gates and Michael Bloomberg, who have built institutions to handle their financing.

Musk and Bezos are, with 268,000 and 202,000 million respectively, the two richest Americans at the moment, which generates marked contrasts between their plans to donate.

A few months ago, Bezos took the stage alongside United Nations Deputy Secretary-General Amina J. Mohammed and heard former United States Secretary of State John Kerry praise him when he said: “In some ways, you are doing more than many people who have the means and don’t do it ”.

Meanwhile, Musk responded, “I keep forgetting you’re still alive” to a tweet from Senator Bernie Sanders demanding “that the extremely wealthy pay their fair share.”

Musk’s nontraditional approach to donating doesn’t stop people in need of his donations, like David Beasley, executive director of the World Food Program, from seeking his help. “The resources at his disposal are so vast and can have consequences in such a potential way that we have to reach out to him, and accept some of that trolling, if we are to try to put some pressure on him and shape his somewhat nascent philanthropic priorities,” said Soskis.

Influence and power

A troll philanthropist could be an easy target for criticism. However, donating money in all the usual ways does not avoid critical blame.

There are several schools of criticism displayed for different types of donors. There is a structural argument that philanthropy serves as another means of using wealth to cement power and influence. Large grants are often compared to the total value of the donor to show that, as a percentage of their fortune, the donations are much smaller than they appear in absolute terms. Contributions to cultural institutions like the Metropolitan Museum of Art in New York and elite schools are now frequently criticized for reinforcing the status quo. Even contributions to rebuild Notre Dame Cathedral in Paris after the fire generated negative comments.

Technocratic institutions that set rigorous benchmarks for gifts and impose strict limits on the ways in which money can be spent are branded as controlling and hierarchical. In contrast, support that generally operates without guidelines on how money can be spent has been applauded by many as of late as the best strategy.

Bezos was named by the Chronicle of Philanthropy last February at the top of its 2020 “Philanthropy 50” list, even though most of his $ 10 billion donation went to his own Bezos Fund for the Earth, which was just starting up. It was a bit like Barack Obama’s surprise Nobel Peace Prize less than a year into his presidency in the way he seemed to sharpen criticism rather than silence it.

However, after a slow start to donations, Bezos has started to look like a good student. He gave $ 100 million to the Feeding America food bank network and another $ 100 million to the Obama presidential center. Money has flowed faster from the Bezos Fund for Earth. Just last week, it announced another 44 grants totaling $ 443 million to groups working on issues including climate justice and conservation, as part of that $ 10 billion pledge.

“You have to have a lot of analytical skills if you want to allocate funds well,” Andrew Steer, the president of the Bezos Fund for Earth, said in an interview.

Musk himself started with what seemed like a somewhat conventional strategy for donating. He created the Musk Foundation in 2002 and signed the non-binding Donation Pledge to donate half his fortune in 2012. (The Musk Foundation website could, by itself, be considered a bit of a troll, for its 33 words in black text with a white background).

Musk Foundation Donations

For the fiscal year ending June 2020, the Musk Foundation made donations of just under $ 3 million to nine groups, most related to education, and gave $ 20 million to Fidelity Charitable, which operates the type of funds. Advised by donors who critics claim can double as a parking lot for charity dollars. That came out of nearly $ 1 billion available in the Musk Foundation coffers by the end of the fiscal year.

Since then, it has announced $ 150 million in grants, including a $ 100 million and $ 30 million Carbon Sequestration Innovation Award to nonprofits in South Texas’ Rio Grande Valley. They may have been both a legal requirement and a new sense of generosity. Tax laws require private foundations to pay about five percent of their funding each year.

“The particular barrier for donors from the tech industry is that they don’t just think their genius has made them good at what they do; they also think that what they do commercially also makes society better, “said Rhodri Davies, a philanthropy analyst who wrote an article on Musk called” The Edgelord Giveth. “

For example, Musk has said that getting humanity to Mars via SpaceX is an important contribution. and he has written and spoken scathingly about what he calls “anti-billionaire nonsense,” including attempts to tax billionaires.

“It makes no sense to take the job of allocating capital away from people who have shown great skills in capital allocation and give it to an entity that has shown little skill in allocating capital, which is the government,” Musk said at an event Monday. hosted by The Wall Street Journal.

At the same time, Kharas said that a more charitable reading of Musk’s exchange with the WPF is possible. It could be that you really just want to know how the money will be spent and are posting, on Twitter, the due diligence work that institutional donation does behind closed doors.

“I think this idea that he was willing to get involved was very good,” the Brookings’s Kharas said of Musk. “I think his response was extremely sensitive. It was basically ‘Show me what you can do. Prove it. Give me some evidence. I will do it'”. The WFP published a breakdown of how it would spend the $ 6.6 billion, but it is still unknown if Musk will make a donation. (I)