The giant charity founded by tech titan Elon Musk could face a multi-million dollar fine for donating so little of his vast wealth.
The world’s second-richest man has avoided billions in taxes by donating Tesla shares to the Musk Foundation, which he created in 2001.
But that provided less than half of what was needed for Musk to qualify for the 2022 tax break, and much of it went to employees, companies and projects with which he is personally affiliated.
The billionaire SpaceX boss is one of just three people running the fund, one of whom says he devotes just six minutes a week to the task.
“The really striking thing about Musk is the discrepancy between his outsized public persona and his very, very minimal philanthropic presence,” philanthropy expert Benjamin Soskis told the New York Times.
Elon Musk visiting Flint, Michigan, where he donated $1.25 million in 2019 to decontaminate the water supply for local schools
Five of Musk’s children were among the first 14 pupils at the ultra-exclusive Ad Astra school, which his charity has supported
Donations for Cameron County, Texas began minutes after this SpaceX rocket blasted over the area after blasting off from the Boca Chica launch site in March 2021
Musk has created one of the world’s largest charities with more than $7 billion in donations since 2020 alone.
But charities are required to give away at least five percent of their assets each year to qualify for tax breaks, but Musk’s foundation managed just under two percent in 2022, the last year for which records are available.
One of its favorite causes is Musk’s non-profit school project called Ad Astra, which he founded in Bel-Air Los Angeles in 2014, with five of his own children among the first 14 students.
Now centered on the SpaceX campus in Boca Chica, Texas, it caters to 250 students, but former SpaceX executives told the newspaper it is nearly impossible for lower-ranking employees to access their children.
The South African-born billionaire has done little to promote his charity, insisting that it is his for-profit companies such as Tesla, SpaceX and social media platform X that will do the most to change the world for the better.
“Tesla has done more to help the environment than all other companies combined,” he said last year.
‘As the head of the company, I have done more for the environment than any single person on earth.’
Musk donated $55 million to Pennsylvania billionaire Jared Isaacman (third from left), who is pledging to raise $200 million for St Jude’s Children’s Research Hospital by raffling off a seat with him on a SpaceX rocket flight
The first Ad Astra was registered at this Musk property in Bel-Air Los Angeles before moving to SpaceX headquarters in Hawthorne, California
But he has made a number of high-profile charitable interventions since making his billions, most notably in Flint, Michigan, where he donated $1.25 million in 2019 to decontaminate the water supply for local schools.
He originally promised to ‘fund the repair of the water in every house in Flint that has water contamination above FDA levels’ and open a manufacturing plant in the city.
Those promises came to nothing, but Mayor Karen Williams Weaver said she was still grateful for his help: ‘He didn’t have to do anything.’
The charity increased in size in 2022 after a stock option gave Musk Tesla shares worth about $25 billion.
Musk complained that he was facing an $11 billion tax bill and was hunting around for a charitable cause that would qualify him for a tax deduction.
He offered $6 billion to the World Food Program if it would satisfy his questions about how it would be spent, but in the end he handed over $5.7 billion of stock to his own foundation—saving him $2 billion in taxes.
Musk’s family office manager Jared Birchall is one of just three people running the charity
But he donated $5 million to a United Nations program that promotes Internet access for schools in remote areas, and eventually signed up two of the countries involved for his Starlink satellite service.
Donations to Cameron County, Texas, began minutes after a SpaceX rocket blasted over the area after blasting off from the Boca Chica launch site in March 2021.
“I’m donating $20 million to Cameron County schools and $10 million to the City of Brownsville for downtown revitalization,” Musk tweeted that morning.
“He’s given to every organization that exists here in Brownsville, from our homeless shelters to the city of Brownsville to our school kids — just about everything I can ever think of,” City Commission member Jessica Tetreau said.
And many of the donations have been close to home, including $100 million to OpenAI, the one-time non-profit whose board he sat on.
More than $100 million has gone to Texas startup education organization The Foundation, run by Musk family office manager Jared Birchall, who also co-trusts the Musk Foundation.
The start-up has bought land outside Bastrop, Texas, just two minutes from a housing project for staff at Musk’s Boring Company, and is running recruitment ads for a new Ad Astra school on the site.
And his biggest donation of 2021 went to Pennsylvania billionaire Jared Isaacman, who is pledging to raise $200 million for St Jude’s Children’s Research Hospital by raffling off a seat with him on a SpaceX rocket flight.
When Isaacman announced he had missed his goal, Musk tweeted back: ‘Count me in for $50 million,’ and eventually donated $55 million through his charity.
Council on Foundations President Kathleen Enright accused Musk of abusing his position at the supposedly independent charity he established.
Musk at the Boca Chica site of his SpaceX headquarters in South Texas
The site is SpaceX’s fourth active launch facility and its first private facility with over 2,100 full-time employees
‘It’s not his checkbook,’ she said, ‘it’s not a private, family-owned company. It’s a charity.’
The charity fell $234 million short of donations required by tax law between 2021 and 2022, leaving it with a 30 percent penalty of the total if it has not made up the shortfall in the meantime.
“That tells you it’s not yet ready for prime time,” said professor Brian Galle, who studies nonprofit law at Georgetown University.
‘It is not yet a professional organisation.’