Elon Musk is facing the risk of having to pay billions of dollars in fines after the Tesla boss’s charitable foundation was discovered to not hire anyone and was only active when it had to pay too much tax

The New York Times (NYT) reported that while Bill Gates used his fortune to try to improve health care services across Africa, Walmart’s Walton family pushed for change in the system. American education, Elon Musk, the second richest billionaire in the world, has charitable activities indiscriminately and mainly to serve his own interests.

More specifically, Elon Musk’s charities are mainly to polish his name, enjoy tax incentives and sometimes for personal benefit.

Don’t hire anyone

According to NYT, Elon Musk has continuously built a charity fund named after him with tax-deductible stock donations with a total value of more than 7 billion USD, making this the largest charity fund in the US at that time.

However, this fund failed to make the minimum donations required by law to justify tax breaks, leaving Elon Musk at risk of facing significant penalties for taking advantage of loopholes to evade taxes. tax.

Shocking investigation: Elon Musk donated 7 billion USD to charity for himself, was exempted 2 billion USD in taxes for donations but did not hire anyone, only serving personal benefits – Photo 1.

Tax records show that Tesla boss does not hire any employees for charity. Billions of dollars are handled by just a committee consisting of Elon Musk himself and 2 volunteers. Responding to NYT, one of the volunteers said they spend very little time for this fund, on average only about 6 minutes per week.

In 2022, this charity fund will only disburse donations of 160 million USD, 234 million USD lower than the requirement for tax reduction. This is the fourth largest deficit among all unsatisfactory charitable funds in the US.

Although Elon Musk believes that his business has brought many good things to the world and has no obligation to do charity. But NYT believes that establishing a tax-exempt non-profit organization requires Tesla’s boss to act for the public according to the law instead of serving his own interests.

The NYT investigative report shows that the Musk Foundation’s 2021-2022 donations (the period for which the most complete donation data is available) showed that half of the money was related to Elon Musk’s interests.

Among the donations the Musk Foundation has made is $55 million to help a major SpaceX customer, then the charities were only disbursed when millions of people in Cameron County – Texas were affected after the rocket exploded. toss.

The foundation also made donations to two schools tied to Elon Musk’s business activities. One school is located in the SpaceX complex, the other is next to the new subdivision for Tesla’s employees.

Research expert Benjamin Soskis of the Urban Institute said that while other billionaires try to multiply the effectiveness of each dollar of charity to society, the Musk foundation does not have any direction or focus but only revolves around the boss’s business.

Indeed, before March 2021, the Musk foundation had never announced any donations to Cameron County, an impoverished area in Texas where the SpaceX launch site is located. But after a SpaceX rocket exploded that month and fell in the area, the fund began donating to compensate people.

Elon Musk’s Ad Astra aristocratic school

Noble school

Elon Musk and his brother Kimbal founded the Musk Foundation in 2001 before selling Paypal to eBay for $1.5 billion. This Tesla boss earned $175 million from the above deal, thereby contributing shares worth $2 million to charity.

The fund’s website has many beautiful animations with messages encouraging people to donate money, but they have not had any contact information when NYT reporters have checked from 2005 until now.

As of September 2014, Elon Musk’s total net worth is more than 10 billion USD but this entrepreneur does not do much charity.

Tax records show that the Musk fund at that time had only $40,121 in its account.

This is consistent with Elon Musk’s disinterest in doing charity because he believes his business has helped society.

“Tesla has done more to protect the environment than all other companies combined. As the company’s leader, I have done more for the environment than any other person on earth,” Elon Musk proudly speaking at NYT’s DealBook conference in 2023.

Most of the money disbursed by the Musk fund is tied to individuals familiar or related to Elon Musk, including events organized by his brother.

In addition, Elon Musk also used this fund to establish a non-profit school called Ad Astra, mainly to raise his children with the children of Tesla or SpaceX leaders.

The Musk Foundation only does charity around the interests of the boss or business

Principal of Astra School, Joshua Dahn, said that Elon Musk’s five children are studying here and most of the students are children of SpaceX employees.

Two former SpaceX executives, who spoke on condition of anonymity, said Astra was considered a privilege for the children of executives and that it was almost impossible for regular employees to get their children into this aristocratic school.

In addition, the Musk fund also disburses many projects but does not have a specific strategy but is simply related to Elon Musk’s verbal commitments or related to the company’s business activities.

In 2016, the Tesla boss donated 254 million USD in shares to charity and it was this source of money that disbursed 10 million USD to OpenAI, the controversial creator of ChatGPT. But this disbursement is also related to the benefits when Elon Musk wants to profit from the project in the context of electric cars facing difficulties at that time.

Only positive when reducing taxes

At the end of 2021, Elon Musk received 25 billion USD in bonus shares from Tesla and had to pay up to 11 billion USD in taxes.

So from here, Elon Musk began actively doing charity work to receive tax reductions according to the recommendation of his lawyer.

In October 2021, Elon Musk publicly announced the idea of ​​a huge charitable gift. Accordingly, he will sell Tesla shares and give 6 billion USD to the Food and Agriculture Organization (FAO).

Excited with the above idea, the FAO side established a plan, but Elon Musk surprisingly did not say anything. Instead, the Tesla boss poured $5.7 billion in shares into the Musk fund, making this organization one of the 20 largest charitable funds in the US and helping Elon Musk save more than $2 billion in taxes.

By law, charitable foundations must disburse at least 5% of assets each year, equivalent to hundreds of millions of dollars for the Musk foundation.

But this Elon Musk charity organization cannot do that because there are only 3 people running it: Elon Musk himself and 2 volunteers.

Tax records even show that one of the volunteers, Matilda Simon, is a personal employee of the Musk family, only working 6 minutes a week for the Musk foundation. The other person is Mr. Jared Birchall, who is the Musk family’s general asset manager, and only works 1 hour a week for the charity fund.

In 2021, the Musk fund missed benchmark by 5% to $41 million. Entering 2022, this number increased to 193 million USD and only gave away 2.25% of its total asset value of 7 billion USD.

Currently, this fund does not have information on charity disbursements in 2023 and will likely be subject to a tax penalty equal to 30% of the shortfall amount from 2022.

Even the disbursement packages of the Musk fund are related to the Tesla boss’s business activities.

For example, the Musk Foundation gave $5 million to a United Nations program to help some rural schools in many countries access satellite Internet, a service of Starlink-SpaceX. In at least two cases, these countries later became Musk customers by connecting their schools to the Starlink satellite service.

Obviously, Elon Musk is doing charity work for himself and if this trend continues, it is likely that the tax authorities will step in and make the Tesla owner face a billion-dollar fine for tax evasion.