Elon Musk’s charity has repeatedly failed to meet minimum donation thresholds required by tax law, potentially resulting in hefty fines from tax authorities, according to a report.
The Musk Foundation, like other charities, is required by law to donate 5% of its assets each year.
In 2021, Tesla’s president found himself owed $11 billion in taxes after just exercising stock options in a bonus plan that gave him $25 billion worth of stock.
Musk has been criticized for spending relatively little money on philanthropy compared to Bill Gates and others, but he plans to save on taxes by donating large sums of money to his charities. He chose to do so – he transferred 5 million shares of Tesla stock. Its value at the time was $5.7 billion.
The gift gives the charity more than $7 billion in assets, making it one of the nation’s largest charities.
However, tax records Quoted by the New York Times It has been revealed that the Musk Foundation, once chaired by a Russian professional gambler, did not make the legally required minimum donations in 2021 and 2022.
In 2021, the Musk Foundation was $41 million short of the minimum threshold. The following year, the shortfall grew to $193 million, according to tax returns.
By the end of 2022, the Musk Foundation was $234 million short of the legally required minimum threshold for donations. There is no data available on charity giving for 2023.
According to tax experts, failing to meet the criteria for a charitable contribution can result in a penalty of 30% of the amount needed to make up the difference.
The report said all of the money Musk donated was used for purposes that indirectly benefited himself and his business.
The foundation donated $5 million to a United Nations program that helps countries identify rural schools in need of internet access. At least two of those countries have become customers of Mr. Musk’s satellite internet service, Starlink.
In 2021, the Musk Foundation paid $55 million to St. Jude Children’s Research Hospital at the request of Jared Isaacman, a Pennsylvania billionaire who flew around the Earth aboard a SpaceX rocket.
Isaacman won one of four seats on a SpaceX rocket and used the flight as a way to raise money for the hospital.
When Mr. Isaacman failed to meet the $200 million goal he had set, Mr. Musk pledged on Twitter: “Please help me with $50 million.”
A few months later, Isaacman said he would pay to board three more SpaceX flights.
Mr. Musk’s foundation also secured funding to start an Ad Astra school, which has just a few dozen students, half of whom are children of SpaceX employees, according to the Times.
Musk’s charity also cut a $10 million check to OpenAI, an AI developer co-founded as a nonprofit by Musk and other tech giants.
Musk said he personally donated $100 million to OpenAI, but ultimately ended up leaving the organization after a power struggle with executives.
OpenAI’s deployment of ChatGPT and support from Microsoft have boosted its valuation, which is said to be over $80 billion.
The Post has reached out to Musk for comment.
Mr. Musk has argued for the past few years that his company’s purpose is to promote collective human interests, such as interplanetary travel, settlements, and electric vehicles that reduce the world’s carbon footprint.
“Tesla has done more for the environment than all other companies combined,” Musk said at the New York Times’ Dealbook conference last year.
“As a company leader, I have done more for the environment than anyone else on earth.”
