Elon Musk donated Tesla shares worth about $5.7bn (£4.2bn) to charity in 2021, making him likely one of the world’s top philanthropic donors last year, a security filing revealed on Monday.
The filing did not name the recipients of the 5,044,000 shares that the Tesla chief reported donating in November last year.
These donations would make Musk the second-biggest donor of 2021, according to a list of the top charitable givers last year in the Chronicle of Philanthropy. Bill and Melinda French Gates, who donated an estimated $15bn, top the list.
Last year, Musk had said he would pay more than $11bn in taxes in 2021 after being dogged by criticisms that the world’s richest man is also one of its biggest tax-dodgers.
The massive tax bill was a result of the billionaire entrepreneur selling off $16.4bn worth of Tesla shares, after he held a Twitter poll with his followers that resulted in a majority saying he should sell off 10 per cent of his stake in the automaker. Musk doesn’t get paid with a salary or bonuses at Tesla, allowing him to avoid income taxes until he sells his shares.
Analysts have suggested that Musk could get tax benefits from donating shares as charitable donations are not subjected to capital gains tax. Some experts say he may have contributed the stock to intermediaries such as “donor-advised funds,” and not outright to charitable groups.
“His tax benefit would be huge. He’d save between 40 per cent and 50 per cent of the $5.7 billion in tax, depending on whether he could take the deduction against his California income and he’d avoid the gains tax he would have to pay if he sold the stock,” Bob Lord, an associate fellow at the Institute for Policy Studies who studies tax policy, told Reuters.
Last October, the Tesla chief had also tried to dabble in larger philanthropy programmes, albeit in his own way. He had issued a provocative Twitter challenge to David Beasley, the executive director of the United Nations’ World Food Program, who had called on billionaires to help address global hunger.
Mr Beasley claimed that even just 2 per cent of Musk’s net worth would “help 42 million people that are literally going to die if we don’t reach them”. The SpaceX and Tesla chief said in response that he would sell Tesla stock if the UN organisation described how $6bn would solve world hunger.
It is however not public if Musk and Mr Beasley took the idea forward.
In 2001, the Tesla chief set up the Musk Foundation, with goals of offering grants for the “development of safe artificial intelligence to benefit humanity” among other causes.
And last year, the foundation offered to give $100m prizes to those who can come up with a technology to help remove carbon from the atmosphere. Musk said he was donating $20m to schools in a county in Texas where a Space X rocket launch site is located.
Both Musk and his rival Amazon chief Jeff Bezos have donated less than 1 per cent of their net worth, whereas other billionaires such as Warren Buffett and George Soros had given away over 20 per cent of their net worth as of early last September, according to Forbes.