Elon Musk's latest innovation: Troll philanthropy

The richest people on earth typically devote a share of their vast resources to charity. That is the bargain and the expectation, anyway.

Jeff Bezos, until very recently the world’s richest human, has been applying himself dutifully if a bit cautiously to the task, giving money to food banks and homeless families while pledging $10 billion of the fortune he earned through the online retailer Amazon to fight climate change.

The latest richest human, Elon Musk, has taken a rather different tack. There was the public spat with the director of the World Food Programme on Twitter, for instance, announcing, “If WFP can describe on this Twitter thread exactly how $6B will solve world hunger, I will sell Tesla stock right now and do it.”

There was the online poll asking whether he should sell 10% of his Tesla shares in order to pay taxes on at least part of his wealth, like most people do without running a survey first. And, of course, there is the ongoing insistence that his moneymaking efforts, running both the electric carmaker Tesla and the rocket company SpaceX are already bettering humankind, thank you very much.

Musk is practicing “troll philanthropy.”

That’s what Benjamin Soskis, senior research associate in the Center on Nonprofits and Philanthropy at the Urban Institute, has called it, noting that Musk seems to be having fun with this novel approach.

“He doesn’t seem to care much about using his philanthropy to curry public favor,” Soskis said. “In fact, he seems to enjoy using his identity as a philanthropist in part to antagonize the public.” Before this year, one estimate put his giving at $100 million, a lot by almost any standard, except for multibillionaires like Musk.

Most wealthy people do the opposite. They use philanthropy to burnish their image or distract the public from the business practices that earned them their enormous wealth in the first place.

When, how and why the ultrarich choose to give their fortunes away matters more than ever because so much money is concentrated in their hands and so little of it is taxable under current rules. Society is to some extent presently stuck relying on voluntary disbursements from those with the greatest means.

“The idea that philanthropy, that any single individual, has enough money to affect something at a global scale is a very new phenomenon,” said Homi Kharas, a senior fellow at the Center for Sustainable Development at the Brookings Institution in Washington. Most billionaires have “accumulated their wealth because the world economy is now globalized, but to sustain a globalized world economy we need to have more inclusive growth.”

There are many different kinds of givers, like Bezos’ ex-wife, MacKenzie Scott, who has focused her billions on diversity and equity. There are the self-declared “effective altruists,” like the Facebook co-founder Dustin Moskovitz and his wife, Cari Tuna, part of a movement searching for evidence-based approaches to find causes where their money does the most good. And there are the traditionalists, like Bill Gates and Michael Bloomberg, who have built institutions to handle their funding.

Musk and Bezos are, with $268 billion and $202 billion respectively, the two richest Americans for the time being, drawing sharper contrasts between their approaches to giving back.

Earlier this year, Bezos took the stage with United Nations Deputy Secretary General Amina J. Mohammed and listened as former U.S. Secretary of State John Kerry sang his praises, saying, “He is stepping up in a way that an awful lot of people who have the wherewithal do not step up.”

Musk, meanwhile, replied to a tweet by Sen. Bernie Sanders demanding “that the extremely wealthy pay their share,” by replying, “I keep forgetting that you’re still alive.”

Musk’s nontraditional approach to giving doesn’t stop people who need his donations, like David Beasley, executive director of the World Food Programme, from seeking his help. “The resources at his disposal are so vast and potentially consequential that we have to engage him, and accept some of that trolling, if we want to try to exert some pressure on him and shape his somewhat inchoate philanthropic priorities,” Soskis said.

Musk did not respond to an email asking him to discuss his philanthropic giving.

The notion that rich people have a moral obligation to give is an ancient one. Soskis, a historian of philanthropy, notes that wealthy citizens in ancient Rome tried to outdo one another paying for public baths and theaters. The inscriptions on those edifices could count as a form of early donor lists.

The idea that the richest might need charity to improve their public relations is also longstanding, driven home in the Gilded Age by the 1882 outburst by railway magnate William Henry Vanderbilt, “The public be damned!” that shadowed him to the end of his days.

Efforts to track the charitable giving of the very wealthy in the United States date to the late 19th century, when the ranks of millionaires exploded. Before long, newspapers were running front-page lists of who had made the biggest gifts. The original duo to capture public attention were John D. Rockefeller and Andrew Carnegie, whose feelings on publicizing philanthropy were diametrically opposed.

Cartoons from the era showed Carnegie, often dressed in a kilt to reference his Scottish origin, showering coins from enormous bags of money. “The man who dies thus rich dies disgraced,” Carnegie wrote in “The Gospel of Wealth,” his treatise on giving. Rockefeller preferred to keep his giving more private and had to be convinced to announce his gifts.

To those who think the trolling started on Twitter, philanthropy was never quite as polite as we imagine today. George Eastman, one of the founders of Eastman-Kodak, called those who did not give their money away during their lifetimes “pie-faced mutts.” Julius Rosenwald, the chairman of Sears, Roebuck and Co. and a major philanthropist in his day, insisted that the accumulation of wealth had nothing to do with smarts, adding, “Some very rich men who made their own fortunes have been among the stupidest men I have ever met in my life.”

But the idea that giving helps the reputation is at best only partially true. Givers are celebrated at times but just as often the higher profile means their motives and choices are picked apart. Oracle co-founder Larry Ellison and Google founders Larry Page and Sergey Brin are each worth over $120 billion, per Forbes, but none of them receives the level of scrutiny that Gates does, for instance.

“If you put your head above the philanthropic parapet and say, ‘I’m interested in the environment,’ or whatever cause area, people can start to question it,” said Beth Breeze, author of the recent book “In Defence of Philanthropy.” Breeze has pushed back against the recent trend of criticizing philanthropists, who, she says, are regularly described as “tax dodging, egotistical, irritating” — criticism they may earn, but not comments that she views as useful to the greater good.

“My concern is not for the thin skins of the rich people. They can take care of themselves. My concern is if the money dries up,” said Breeze, who was a fundraiser for a youth homeless center before becoming an academic and identifies as a left-wing Labour Party supporter in Britain.

A troll philanthropist might be an easy target for criticism. But donating money in all the usual ways is no break from critical rebukes.

There are several different schools of criticism deployed for different kinds of givers. There is the structural argument that philanthropy serves as another means of using wealth to cement power and influence. Large grants are often compared with the giver’s total net worth to show that as a percentage of their wealth the gifts are much smaller than they appear in absolute terms. Gifts to cultural institutions like the Metropolitan Museum of Art and Ivy League schools are now regularly assailed for reinforcing the status quo. Even gifts to rebuild the Notre Dame cathedral in Paris after it caught fire earned significant blowback.

Technocratic institutions that set exacting benchmarks for gifts and place strict limits on how their money can be spent are tagged as controlling and hierarchical. In contrast, general operating support without guidance on how the money can be used has been applauded by many lately as the best approach.

Bezos was named by the Chronicle of Philanthropy this past February to the top spot on its 2020 “Philanthropy 50” list, even though most of that was for his $10 billion pledge to his own Bezos Earth Fund, which had barely gotten up and running. It was a bit like Barack Obama’s surprise Nobel Peace Prize less than a year into his presidency in the way that it seemed to sharpen critiques rather than dull them.

But after a slow start to his giving, Bezos has begun to look like the good pupil. He gave $100 million to the Feeding America food bank network and another $100 million to Obama’s presidential center. The money has been flowing more quickly out of the Bezos Earth Fund as well. Just this past week he announced another 44 grants worth a total of $443 million to groups working on issues including climate justice and conservation, part of that $10 billion pledge.

“You need to have a pretty sharp pencil of analysis in order to allocate funds well,” said Andrew Steer, president of the Bezos Earth Fund, in an interview.

Musk himself started out with what seemed like a somewhat conventional approach to giving. He created the Musk Foundation in 2002 and signed the nonbinding Giving Pledge to give away half his wealth in 2012. (The Musk Foundation website could, itself, be considered a bit of a troll, with its 33 words in black text on a white background.)

For the fiscal year ending June 2020, the Musk Foundation made donations of a little less than $3 million to nine groups, mostly related to education, and gave $20 million to Fidelity Charitable, which operates the kind of donor-advised funds that critics say can function as a parking lot for charitable dollars. That was out of nearly $1 billion available in the Musk Foundation coffers by the end of the fiscal year.

Since then he has announced $150 million in gifts, including a $100 million innovation prize for carbon removal and $30 million to nonprofits in the Rio Grande Valley in South Texas. Those may have been at least as much about a legal requirement as a newfound sense of munificence. Tax laws require private foundations to pay out roughly 5% of their endowments annually.

“The particular barrier for donors from a tech background is they don’t just think their genius has made them good at what they do, they also think what they do commercially also makes society better,” said Rhodri Davies, a philanthropy commentator who wrote a piece on Musk called “The Edgelord Giveth.”

Musk, for instance, has said that getting humankind to Mars through SpaceX is an important contribution and has written and spoken acerbically about what he calls “anti-billionaire BS,” including attempts to target taxes at billionaires.

“It does not make sense to take the job of capital allocation away from people who have demonstrated great skill in capital allocation and give it to an entity that has demonstrated very poor skill in capital allocation, which is the government,” Musk said Monday at an event hosted by The Wall Street Journal.

At the same time, Kharas said a more charitable reading of Musk’s exchange with the World Food Programme is possible. He could just genuinely want to know how the money will be spent and is putting in public, on Twitter, the due diligence work that institutional giving does behind closed doors.

“I think this idea that he was willing to engage was really good,” Kharas of the Brookings Institution said of Musk. “I think his response was extremely sensible. It was basically, ‘Show me what you can do. Demonstrate it. Provide me with some evidence. I’ll do it.’” The WFP published a breakdown of how they would spend the $6.6 billion, but there’s no word yet on whether Musk will make a donation.

MacKenzie Scott’s latest letter about her giving included a lot of philosophical musings most billionaires do not routinely share. But she left out precisely the details everyone was waiting for — how many billion dollars went to which groups? Instead she said, stop paying so much attention to billionaires and think about what you can give.

In a winking gesture to everyone waiting for the latest cash tally, she wrote the whole thing without using a single dollar sign. Classic troll move.