Charitable giving of the ultra-wealthy

[Cowperson]

What percentage of your wealth do you estimate you give to charitable causes?

There is a chart with this Forbes story on what the ultra-rich have donated for a percentage comparison.

http://www.msnbc.msn.com/id/6123392/

Cowperson

[albertGQ]

Originally posted by Cowperson@Sep 28 2004, 07:37 PM
What percentage of your wealth do you estimate you give to charitable causes?

There is a chart with this Forbes story on what the ultra-rich have donated for a percentage comparison.

http://www.msnbc.msn.com/id/6123392/

Cowperson

Wow!!! Gates gives alot of money to charity.

If only he would give 0.01% of his wealth to me and I would be set for life

[CaramonLS]

Don't read too much into this. They mostly do it for tax breaks.

[RougeUnderoos]

Originally posted by CaramonLS@Sep 28 2004, 08:05 PM
Don't read too much into this. They mostly do it for tax breaks.

Who cares why they do it? Certainly not the people that benefit. 23 billion dollars is 23 billion dollars.

Regarding Gates, I read something about him long ago that he plans to give almost all of it away before he dies, and leave his children with "only" 50 million dollars each. That is an amazing amount of money to literally give away, tax break or not, and if he's dead, I don't think the tax break matters much.

On a more local note -- this reminds me of the Flames minority owner who gave 18 million bucks to the U of C a few weeks back. Good for him.l

[Clarkey]

Originally posted by RougeUnderoos+Sep 29 2004, 02:39 AM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (RougeUnderoos @ Sep 29 2004, 02:39 AM)</td></tr><tr><td id='QUOTE'> <!--QuoteBegin-CaramonLS@Sep 28 2004, 08:05 PM
Don't read too much into this. They mostly do it for tax breaks.

Who cares why they do it? Certainly not the people that benefit. 23 billion dollars is 23 billion dollars.

Regarding Gates, I read something about him long ago that he plans to give almost all of it away before he dies, and leave his children with "only" 50 million dollars each. That is an amazing amount of money to literally give away, tax break or not, and if he's dead, I don't think the tax break matters much.

On a more local note -- this reminds me of the Flames minority owner who gave 18 million bucks to the U of C a few weeks back. Good for him.l [/b][/quote]
Agreed.

People always get all up in arms about the motives of charitable donations, why worry about it, people are being helped who wouldn't otherwise.

Bill Gates is a good man in my books.

[Cowperson]

Originally posted by CaramonLS@Sep 29 2004, 02:05 AM
Don't read too much into this. They mostly do it for tax breaks.

There are 20 individuals in our society on that list who gave away $48.23 billion to charitable causes.

I'm not an accountant, but I couldn't see retrieving even half that through tax recovery. Even if the donation is tax deductible. I'm not questioning the motivation because they're outright poorer for the effort regardless.

In the case of one, Bill Gates, if you give away $23 billion, that's $23 billion you don't have any more.

Gates, Mr. Softie to his critics, has set out on a path to become the greatest philanthropist in the history of the world. That's the legacy he wants. He has a full time staff helping him with both the big things and the small things, the latter includes sifting tons of correspondence for worthy projects for him.

Cowperson

[CaramonLS]

I don't know exactly how tax law works in the United states, but a person who is much wealthier than me donates 5-7% of his income (roughly 10,000$) to a charity and gets it all back and more at tax time.

[stamps]

Originally posted by CaramonLS@Sep 29 2004, 05:15 AM
I don't know exactly how tax law works in the United states, but a person who is much wealthier than me donates 5-7% of his income (roughly 10,000$) to a charity and gets it all back and more at tax time.

I could be wrong but is'nt the charitible donation right-off at 27%, so lets say you donate 1000.00$, you write off 270.00$, take that 270 and subtract it from your gross income and that is what you save, depending on your tax bracket it's not alot of money, so if your in the 50% tax range for every 1000 dollars your write-off you get 135.00$ back from the government... about 13.5%.. I could be wrong here but from the days when I use to do my own taxes this is how I assumed it worked...

[moon]

I could be wrong but I am fairly sure that Bill Gates doesn't really worry about paying his taxes each year. I would also imagine that everyone else on that list would be able to find the money needed to pay their taxes without having to use charitable donations as ways to avoid paying higher taxes.

[Daradon]

Originally posted by CaramonLS@Sep 28 2004, 11:15 PM
I don't know exactly how tax law works in the United states, but a person who is much wealthier than me donates 5-7% of his income (roughly 10,000$) to a charity and gets it all back and more at tax time.

Yeah I'm not sure how you could get it all back and more, especially when you can only write off a percentage of donations AND THEN it gets factored into your taxes. You end up getting back a percentage of a percentage. I don't know what the available write off percentage is in the States, nor do I know Bill's tax percentage, but common logic would seem to suggest you can't get more back then you put in.

The rich (or really anyone with a corporated business) have lots of way to hide and move their money to pay LESS tax, but you can't pay none or get money back.

[Cowperson]

Originally posted by CaramonLS@Sep 29 2004, 05:15 AM
I don't know exactly how tax law works in the United states, but a person who is much wealthier than me donates 5-7% of his income (roughly 10,000$) to a charity and gets it all back and more at tax time.

I doubt that very much.

Cowperson

[FlamesAddiction]

I heard that Gates gives a lot of money anonymously to avoid public attention. He, like other very wealthy people, know that if such things were public, people would start begging them or expecting money from them. Anonymous donations are a way of limiting expectations from others that could be constricting.

If true, I doubt there would be an tax breaks either.

[Cowperson]

Originally posted by FlamesAddiction@Sep 29 2004, 02:42 PM
I heard that Gates gives a lot of money anonymously to avoid public attention. He, like other very wealthy people, know that if such things were public, people would start begging them or expecting money from them. Anonymous donations are a way of limiting expectations from others that could be constricting.

If true, I doubt there would be an tax breaks either.

I have a 1963 National Geographic with a photo and a passing reference to the former President of Coca Cola who was known around LA as "Mr. Anonymous Donor" given his support of various causes without taking credit.

Cowperson

[Daradon]

This is all true, there are many anonymous donors and to those individuals the hat should be truly tipped, as that is the TRUE meaning of charity.

I have heard stories that Bill is probably one of these individuals who is both generous in money and spirit. I may dislike him for his business practices and his seemingly slowing down of computer technology tokeep his competitive advantage, but in this area I have the utmost respect for him.

Good on him. He is a better man than I am in this respect. I give, but very rarely anonymously...

[Lurch]

Well, I don't know about the US, but here in Canada you could save more in taxes from a charitable donation than it actually costed you in the first place up until February 1 (I think) when they closed the loophole. The way it worked was through charitable donation of medical supplies to 3rd world countries. A bunch of companies were set up that allowed you to buy drugs for donation at big discount and give the drugs to charities, for which you were credited a tax credit at the market value of the drug. It gets a little complicated due to the capital gain in the equation, but the end result was a $1 donation created a tax credit of over $1 if you were in the highest tax bracket.

[Daradon]

I did hear about this loophole and saw ads for it, but like you said you had to be in the highest tax bracket (and spend like at least 10,000 on a single donation). But yeah, there were companies set up to help people take advantage of this loophole. Probably lawyer or accounting firms.

[CaramonLS]

Originally posted by Cowperson+Sep 29 2004, 02:38 PM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (Cowperson @ Sep 29 2004, 02:38 PM)</td></tr><tr><td id='QUOTE'> <!--QuoteBegin-CaramonLS@Sep 29 2004, 05:15 AM
I don't know exactly how tax law works in the United states, but a person who is much wealthier than me donates 5-7% of his income (roughly 10,000$) to a charity and gets it all back and more at tax time.

I doubt that very much.

Cowperson [/b][/quote]
Cow this person wouldn't donate a cent of his money if he wasn't getting it all back. That I can promise.

There are some very interesting tax laws in Canada.

[CaramonLS]

Originally posted by Daradon@Sep 29 2004, 03:29 PM
I did hear about this loophole and saw ads for it, but like you said you had to be in the highest tax bracket (and spend like at least 10,000 on a single donation). But yeah, there were companies set up to help people take advantage of this loophole. Probably lawyer or accounting firms.

Yes thats it Dar - this person is in the highest tax bracket.

I am not sure how it works though.

[Daradon]

Originally posted by CaramonLS+Sep 29 2004, 09:32 AM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (CaramonLS @ Sep 29 2004, 09:32 AM)</td></tr><tr><td id='QUOTE'> <!--QuoteBegin-Daradon@Sep 29 2004, 03:29 PM
I did hear about this loophole and saw ads for it, but like you said you had to be in the highest tax bracket (and spend like at least 10,000 on a single donation). But yeah, there were companies set up to help people take advantage of this loophole. Probably lawyer or accounting firms.

Yes thats it Dar - this person is in the highest tax bracket.

I am not sure how it works though. [/b][/quote]
That's in Canada though, I don't know if that works in the States.

Plus too I doubt it works when you give away over 30% of your earnings. BY the time you have given away that much, it's unlikely that you could recoup that back EVEN with that strange loophole working in your favor. There is no way the U.S. government would give back 17 billion back to Bill ESPECIALLY if much of the donations are heading overseas. It's more likely he saved maybe 10%, maybe less?

Look at it this way, IF IT WAS TRUE in the States, why wouldn't the other philanthropists be that close to him in percentage given? Obviously he's not the only one who knows about it.

[Cowperson]

Originally posted by CaramonLS+Sep 29 2004, 03:32 PM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (CaramonLS @ Sep 29 2004, 03:32 PM)</td></tr><tr><td id='QUOTE'> <!--QuoteBegin-Daradon@Sep 29 2004, 03:29 PM
I did hear about this loophole and saw ads for it, but like you said you had to be in the highest tax bracket (and spend like at least 10,000 on a single donation). But yeah, there were companies set up to help people take advantage of this loophole. Probably lawyer or accounting firms.

Yes thats it Dar - this person is in the highest tax bracket.

I am not sure how it works though. [/b][/quote]
If you were to commit to charitable giving and use an insurance policy in a certain way, the net result through time might be to retrieve a good part of the money so that you can give it to your kids when you die. I believe that's the way it works.

But that's quite different than simply giving the money to a charity and getting it back in April from the government.

I think that's the only way to get to the point you're telling us about.

It also seems quite different than what we're seeing broadly from the individuals in the USA.

Just thinking out loud. I'm not an accountant.

I will make another point - a person is under no obligation to pay any more taxes than they are obliged to. If tax law allows for them to donate to a good cause and retrieve the cash via a loophole, more power to them.

Cowperson