Billionaire Foundation - The Most Immoral Charity In The World

Have you ever wondered what happens when a  billionaire donates to their own foundation? Like what happens to all that money? A billion  is a lot. It is all encouraged with generous tax exemptions. And I've always asked myself –  why not donate to a charity doing the work on the ground directly? There is definitely  no shortage of them. There are even well established programs by the United Nations  that millions rely on. So why is there more foundations now than ever before? [0a] [0b] Well, if

you've believed that billionaire philanthropy is the most redeeming  quality of the ultrawealthy, I am about to ruin your entire childhood. As  I've found in my investigation and you too will see in this video, billionaire philanthropy  is very far from the rosy picture portrayed in the feel-good stories by the media. Philanthropy is actually the best way how you can hoard your wealth indefinitely, pay  no taxes and get praised for it by everyone. I wanna destroy this notion that billionaires g

ive  out their wealth and expect nothing in return. The super rich are known for being extremely efficient  at avoiding as much taxes as humanly possible. And philanthropy is actually one of the most  effective ways of hoarding wealth while reducing your tax burden to 1 to 2 percent. [1] [2] Much of it happens through a powerful institution known as foundation. Private foundation is an institution with a very special status. They  are tax exempt private organizations yet they are still allowed t

o invest into for profit  companies. Foundations can hold corporate stocks and bonds and generate revenue this way. [3] There is only one major condition they have to fulfill to keep their tax exempt status  - and that is to donate 5% of foundation's total assets on annual basis. [4] So when you hear a billionaire donating their wealth to charity and it's going  through a foundation, up to 95% of it can do nothing charitable at all. In 2021, Americans donated almost half a trillion dollars into

charities.  Two-thirds of this came from individuals. Only 18% came from foundations. [5] But if all foundations' assets went to charity, they would have to donate  all of the $1 trillion some 100,000 foundations hold in the United States. Instead,  they donated only $90.88 billion in 2021. [6] Billionaire philanthropy doesn't come  for free. It comes with the benefit of legally dodging taxes by stockpiling their  wealth in a tax exempt institution. And it's the one thing billionaires consistent

ly  receive endless praise and gratitude for. I don't think many people realize that it is  completely legal for foundations to generate revenue from for-profit investments.  It's even uglier than it sounds if you zoom in on this scheme up-close. You often see headlines about the enormous generosity of the Gates Foundation.  But most of these articles won't mention that the Gates Foundation is actually  two entities - the Foundation Trust, and the actual charity. It is the Trust that holds  most

of the assets and then contributes to the charity arm on annual basis. [7] The Foundation has something called the Strategic Investment Fund, which is doing just that. Its  investment portfolio includes global conglomerates such as Coca Cola, Walmart, Berkshire Hathaway,  UPS or big pharma companies. [10] [11] Most of these investments have been criticized for  conflicting with the foundation's charitable goals. But we'll get to that later. [8] [9] So next time you hear about a billionaire foun

dation, think of the up to 95% of  assets they hold in profitable ventures. Yet even the 5% donation requirement is pretty  sketchy. You'd think that's where the rules would be strict - only allowing donations to  non-profit organizations. But you'd be wrong. In 2012, The Ford Foundation awarded a $1  million grant to the Los Angeles Times, a private for-profit media company. [12a] The donation outraged critics that complained charities shouldn't give  to for-profit organizations. But it fell fl

at because foundations have been doing  this routinely and no one cares. [12b] [13] In 2020, an excellent investigative report by  The Nation found at least $250 million that was donated by the Gates Foundation went to companies  where the foundation holds corporate stocks and bonds. A big portion of the Foundation assets come  from Warren Buffet. Buffet's hedge fund, Berkshire Hathaway, has multi-billion-dollar investments  in the same companies the Gates Foundation propped up with its charitab

le donations. [8] But isn't it illegal to make donations to a private entity you stand to make profit from?  Well, only if you are too obvious about it. Pearson Charitable Foundation once had to pay  a $7.7 million settlement for using its funds to generate revenue for Pearson Inc., the  publishing corporation. The ruling said the law prohibits charities from benefiting  their parent for-profit companies. [14] But introduce a layer of separation by  having your foundation donate to the same comp

anies you hold corporate stocks and  bonds in and suddenly all is fine. [8] [15] The purpose of donating to for-profits is  usually obfuscated with the "sharing common goals" excuse. But peel back the layer  of bullshit and you'll see more clearly. When you break down these donations and  investments individually, they seem minuscule compared to the revenue size of their companies.  But the donations aren't meant to stack up their treasure chest with cash. They are meant to  elevate the risk of

corporations trying to expand into new markets. When a project fails, the  company takes no liability. But if it succeeds, it reaps all the benefits of extra revenue  generated from a market expansion. [13] One such example is when the Gates  Foundation donated $11 million to Mastercard to cement presence in Kenya. This  act of philanthropy was accused of helping a big corporation assume a dominant position  in a risky market. And it is really hard to read into it anything other than propping  m

arket expansion of a multinational. [16] I want to flip the narrative on its head  for a bit. When billionaires reduce their taxes by funneling their wealth into a  foundation, let's call it out for what it is. A government subsidy. Tax exemption  is a forgone revenue that could have been used to better fund public programs. Instead, the  uncollected taxes go to support whatever ventures billionaires decide on a whim. This completes  the circle of perverse incentives. [17] In my previous video o

n Bill Gates  influence on US education policy, I showcased how billionaire philanthropy heavily  subsidized and pushed through flawed educational standards into US public schools. [18 – 22] Throughout his efforts, Gates was donating millions into various software and publishing  companies to ease their entrance into the market for new educational materials. The  companies went on to book billions in revenue and substantial boosts to their profits. All  of that off the backs of the American taxp

ayer, who had to subsidize public schools purchasing  the trademarked and copyrighted materials sold by these companies. [23] [24] [13] The Gateses refuse to admit they have an outsize influence on public spending. [25] [26] Let me break this down to you, Bill. Federal state budgets were following your advocacy. Not vice  versa. Your rounding-error billions of dollars, influence how trillions of tax  payers money have been spent. Foundations are extremely powerful  institutions. Not just due to

their wealth and assets. It is also thanks to the lax  transparency rules and zero accountability. It is very difficult to find real tangible  information about foundation finances and inner workings. 90% of foundations don't have a website  and many of those that do function just as front page promotional materials. The worst example  I've found is the Musk Foundation website, whose text you could fit inside a tweet. [17] Due to these lax and vague rules, foundations enjoy a position of tremend

ous privilege.  Unlike any other private or public institution, foundations are beholden to nobody. They are  undemocratic because there is no electorate to hold them accountable to. They don't answer  to market mechanisms because they have no bottom line, no shareholders,  no competitors, no customers, and they are not required to submit quarterly  or annual reports. And by default, billionaire foundations are perpetual - locking up their  wealth behind the 5% rule indefinitely. [17] [26] By no

w, I have dunked on charitable giving  so much that it feels like beating a dead horse at this point. But I am still seeing some  twitching so let's double tap just to be sure. It is very easy to be impressed with all the  billions that get poured into charities. But how much of that money actually reaches  those most in need is a question of a long-standing debate. Even so, looking at the  statics paints a pretty pessimistic picture. According to Giving USA, up to 45% of all  charitable donatio

ns go towards religion and arts. Giving to health programs and overseas is tiny by  comparison. So helping the global poor is a really minor concern to the world's richest. [27] Now subtract from those raw numbers all the administrative costs and the obscene salaries  paid to senior management and even less is left for those in most dire need. [28] So if we leave it to the rich to decide where to help, 95% of their philanthropy is going  to be just a perpetual investment trust, and half of the r

emaining 5% is gonna do fuck'ol.  We could have been taxing them like the rest of the population and fund programs based on need  rather than whims and passions of individuals. Charity is a group of the ultrawealthy  "searching for answers with their right hand to problems that others in the  room have created with their left." This isn't a quote from Slavoj Zizek. It's  from Peter Buffet, the son of Warren Buffet, saying the quiet part out loud - billionaires  are responsible for the problems t

hey promise to solve with philanthropy. [29] [26] This is a notion that no big philanthropist will admit to. But what does the reality say? In 2007, the LA Times published a series of investigations exposing controversial investments  of the Gates Foundation, that conflicted with its charitable causes. It revealed investments of  $423 million in big oil companies operating in Africa. Not a big deal until you get to the  part where these companies have been responsible for pollution around their

operation in African  regions, causing significant spikes in cancer and respiratory diseases. That's almost twice as much  as the Foundation donated to polio and measles immunization and research worldwide. [30] [31] That's not an outlier. That's part of 41% of the Foundation's total assets that have been invested  in companies that counter its charitable goals. It includes investments in companies using child  labor, and big pharma pricing their medicine beyond the reach of patients in need. [3

2] This controversial investment strategy continues to this day either  through the Strategic Investment Fund or Berkshire Hathaway holdings. [8] Whether its hedge funds, venture capitalist firms or foundations, billionaires are building  up their wealth in investments in multinational corporations exploiting workers and resources  from developing countries. They don't invest into worker co-ops, or unionization advocacy groups,  or farmers' communes. It's big oil, big pharma, big agro, big tech

. Billionaires are talking big  on climate change and the environment yet they are polluting a million times more than an average  person in the bottom 90%. And majority of that pollution is coming from their investments. [33] Billionaires are talking big on poverty and inequality. All of the world billionaires,  some 2,000 people, have more wealth than the bottom 4.6 billion people. The top 1% have  double the wealth of the bottom 6.9 billion people. The more this wealth gap between  the ultrar

ich and everyone else widens, the more blame they carry on their shoulders  for the misery caused by the system that allows for this. [34] [35] End If philanthropy is truly about helping others, why do we  allow billionaires to hoard their wealth indefinitely in perpetual foundations that  wouldn't dissolve even after their founders' deaths? Why is up to 95% of their wealth allowed  to be reinvested in for-profit ventures? Why are donations allowed to go to for-profit companies? Philanthropy is

not about solving problems so that people don't live in misery. It's an investment  strategy with long-term ROI expectations.