Elon Musk donated over $5 billion to a charity in November
Elon Musk, the world's richest person, donated over $5 billion of Tesla stock to an unnamed charity over a period of ten days in November 2021, Reuters reported. The philanthropic gesture was revealed in Tesla's Securities and Exchange Commission (SEC) filings.
Tesla and Elon Musk have had a huge 2021 after the company's valuation crossed the one trillion mark and Musk's personal worth swelled, resulting in him becoming the richest person in the world. The new riches also attracted the ire of lawmakers in the U.S. who have been working to bring in a "Billionaires Tax" that would be applicable to the less than 1000 people in the country and tax the growth in their personal fortunes, even if they appear only on paper.
Musk was finally going to pay taxes
Musk has been quite vocal against the differential treatment he thinks, entrepreneurs were being subjected to and decided to sell 10 percent of his Tesla stock that under current laws would make him liable to pay taxes. Towards the end of the year, Musk declared that he would be paying over $11 billion in taxes.
However, recent filings with the SEC reveal in November, Musk donated a total of 5,044,000 Tesla shares to an undisclosed charity over a period of ten days. Calculated on the basis of the closing stock price on the five days, the stock was donated, the donation is worth $5.74 billion, Reuters reported.
Experts on taxation told Reuters that the donation of shares could bring in up to 50 percent savings in payable tax as Musk can avoid capital gains tax as the shares were not sold in the market. The secrecy around the organization that received this stock makes it even more intriguing as Musk is now the second-largest donor in the U.S. after Bill and Melinda Gates, Reuters stated in their report.
Who got the money?
Musk also runs a charitable foundation in his own name, where his brother Kimbal is the director. According to its website, the Foundation supports causes such as renewable energy research, human space exploration, development of safe artificial intelligence (all business areas of Musk companies) as well as science and engineering education and pediatric research.
Bloomberg reported that the Musk Foundation has become more active in its donations in recent years with tens of millions donated to a school in Texas where Musk's SpaceX has moved most of its operations to, $100 million in prizes for a competition for carbon removal and another $10 million given to two scientists for COVID-19 research.
It is also unclear whether the stock was donated outright to the charity or as donor-advised funds (DAFs), a mechanism that allows funds to be parked in perpetuity with the organization, Bloomberg reported. Interesting Engineering has reached out to Tesla seeking further details and will update this story when a comment is received.
Interestingly, the donation is just a billion dollars short of the amount that the United Nations World Food Programme (WFP) was seeking to address humanitarian concerns last year. WFP chief David Beasley had even provided a detailed split-up on how the organization would spend the money, as requested by Musk, around the dates Musk made this donation.
We can only hope that Musk found a larger cause than this at the unnamed charity to have made this decision.