Hundreds of billionaires pledged to donate their fortune. The philanthropic era of Bill Gates and Warren Buffett has come to an end

In 2010, Bill Gates and Warren Buffett teamed up on an unusual project: convincing hundreds of millionaires that They didn’t need half his fortune and they owed billions of dollars to philanthropic projects. Sounds crazy, right? Well they got it. However, the model promoted by these two regular figures in the top 10 with the greatest fortunes in the last four decadesappears to be reaching a tipping point. They are coming tax reforms and moral incentives are not supported by the always convincing fiscal incentives. The golden age of philanthropy among millionaires could be in its final stages. Gates and Buffett’s original plan. The project The Giving Pledgelaunched by Gates and Buffett 15 years ago, invited hundreds of the world’s billionaires to sign a non-binding pledge promising to donate at least half of their fortune to charitable causes during their lifetime or after their death. Since its creation, more than 250 billionaires from 30 countries have signed this commitment, adding a combined fortune close to $600 billion in potential donations. according to calculations of Business Insider. Despite the magnitude of the figures, in recent years the viability of this model of collective philanthropy has been questioned. Warren Buffett himself recognized in his last letter to Berkshire Hathaway shareholders that its plan to engage and motivate the ultra-wealthy “hasn’t worked,” assuming the idea of ​​a golden age of mass philanthropy may be coming to an end. According to a recent report of the Institute of Political Studies, of the 256 signatories of the commitment to donate half of their fortune, only nine have fulfilled their promise. Open doors to philanthropy. The approval of the “One Big Beautiful Bill” Act, a fiscal package that imposes a 10% tax to foundations with more than $5 billion in assets, has significantly altered the philanthropic plans of many billionaires. The withdrawal of tax incentives makes donations They are no longer such a priority for great fortunes. According to what he told Fortune Kathleen McCarthy, director of the Center on Philanthropy and Civil Society“The insidious thing about this is that it will seriously affect the large liberal foundations like Gates, Ford and Soros”, which contributed millions of dollars to social, health and educational projects. “Whereas conservative foundations are much smaller and will pay a much lower rate,” McCarthy stressed. New ways to donate. This new scenario, which alienates large foundations from the front line of giving, is pushing philanthropists to look for alternative ways to give and modify their strategies. “Billionaires will begin to look for alternative mechanisms when they realize that they are being forced to close their foundations,” explains McCarthy. Practices like direct donation practiced by MacKenzie Scott, ex-wife of Jeff Bezos, and her Yield Giving foundation are gaining ground. Your strategy: donate the money directly to the organizations that develop the projects. Without intermediaries or segmentation of funds. According to a report of the Center for Effective PhilanthropyScott has already awarded more than $19.25 billion to 2,450 nonprofit organizations. This is how Bella DeVaan, from the Institute for Policy Studies in the article Fortune“I think she sets the trend and is an ethical reference in the way of donating money, as Gates has been.” Buffett’s family legacy. Although the era of massive philanthropy seems to end, Warren Buffett has not stopped giving. With Buffett’s retirement as head of Berkshire Hathaway, the investor has delegated part of his fortune in donations to the charitable foundations of his three children and his late wife. Annually, the veteran investor has been distributing billions in the form of actions to strengthen the family legacy and ensure that its wealth benefits society. However, in his latest donations from the millionaire a striking absence has been noted: the Bill and Melinda Gates Foundation has already does not appear among its beneficiaries. In Xataka | The True Legacy of the Duty Free Founder: How Chuck Feeney Inspired Bill Gates and Warren Buffett Image | Flickr (Fortune Live Media)

“I told Musk not to donate his money, it would end up in organizations chosen by Bill Gates”

Peter Thiel is one of the most influential and controversial names in the technology world, known both for his business success with projects such as PayPal or Palantir, and for his unconventional ideas. about education either religion. Recently, Thiel has generated a lot of debate after Reuters had access to recordings of a series of private conferences in which he warned Elon Musk about where his fortune could end up if he donated it to the wrong people. Peter Thiel and his influence in Silicon Valley. Peter Thiel is a key figure in Silicon Valley, being one of the founding members of the so-called “PayPal mafia“, a group of businessmen who revolutionized technology and currently accumulate great economic and political power. Their role as mentor and investment partner of other majors in the sector, like Mark Zuckerberghas allowed him to control venture capital funds that drive many decisive companies in the San Francisco Bay Area. One of the figures with whom Thiel has had a particularly complex relationship is Elon Musk, with whom he founded the company PayPal. In transcripts seen by Reuters of Thiel’s private talks, he explained how he warned Musk against donating his fortune to Bill Gates through The Giving Pledgean agreement by which millionaires agree to donate a large part of their assets to social causes. Thiel told his audience: “I told (Elon Musk) that his money would end up in the hands of organizations selected by Bill Gates.” In response to this message, the millionaire said that Musk responded: “What am I supposed to do, give it to my children? It would be worse to give it to Bill Gates,” is recorded in the leaked transcripts. Then Musk ruled out Gates. A few years ago, Bill Gates and Elon Musk held a series of meetings in which Gates proposed a series of impact investments in which the founder of Space X could be interested in investing philanthropically through the Gates Foundation. Within the framework of this approach, the founder and his son Rory They even visited the Tesla factory in Austin. However, when Musk’s donation commitment seemed to come to fruition, the South African millionaire suddenly changed his mind and he sent Gates away in bad waysblaming him for how incoherent that someone who claims to fight against climate change would have short positions (at losses) of a company like Tesla, which worked to reduce fossil fuels. From that moment, the relationship between Musk and Gates they have been like water and oil. Thiel’s story in which he advised Musk to distance himself from Gates, and the abrupt breakdown of philanthropic talks with the Microsoft founder could be related. The fear of global power and the figure of the “Antichrist”. According what was published by Guardianthe transcripts also revealed other concerns of Thiel, who in his workshops warned about the risk of the emergence of a figure of global power, which he figuratively called “Antichrist”, who could emerge from the dominance growing of artificial intelligence. According to Thiel, this entity, which represents a form of power, could be presented as a solution to face global crises such as the climate change or nuclear threatsbut in reality it would end up limiting individual freedoms and promoting a uniformity of thought. As and as pointed out Fortunethis concern is based on his personal interpretation of the biblical text and what he considers the danger of developing science without a solid ethical basiswhich could generate a global system that demands obedience in exchange for order and security. Technology will set you free. Peter Thiel argues that large technological fortunes should not be donated to charitable causes, but rather, in his words, “large technological fortunes should be used to protect human freedom” from the risk of a centralized global system that controls the flow of capital and innovation. The millionaire warns that, if governments and international institutions control investments and innovation, could curb creativity and human potential under the pretext of global security. The Twitter purchase on the part of Elon Musk, his involvement in the Trump campaign and his subsequent role in DOGEshow that Thiel’s words have influenced Musk to reconsider his commitments and think about how to protect the legacy of his fortune in the face of these concerns. In Xataka | Some millionaires didn’t like the ideology of universities, so they created their own university: an “Anti-Woke” Image | Flickr (Gage Skidmore, Statsministerens kontor)

If the question is how much money you can donate to a child without declaring it to the Treasury, the law makes it clear: none

An increasingly widespread trend among millionaires is the Do not leave inheritance To your children. Bill Gates either Warren Buffett There are good examples of this new trend that seeks to convey the heritage of parents to children in alternative ways. However, it is not necessary to go to fortunes so bulky to meet cases of parents who want to convey part of their heritage to their children when they are still young. Patrimonial donations and movable property. According to him Article 618 of the Civil Code“Donation is an act of liberality by which a person has one thing for free in favor of another, that accepts it.” Thus, as defined by the regulations on the Inheritance and Donations Tax, Donating money, goods or any other form of patrimony to children will be considered as a donation by the Tax Agency. That implies that the donation must meet a series of characteristics and pay similar taxes to those that would be paid in case of inheritance without any limit value. Namely: Plusvalía tax, IRPF and Inheritance Tax and Donations. When donating money seems simpler, but Hacienda Vigila. If, as in most cases, the donation consists of an amount of money not very high, temptation is simply giving it to it. But how much money can you give a child without declaring it as a donation? The law does not establish any type of limit that forces donations to declare, so, technically, it would be donation to even give it a euro. However, such and as indicated From lawyers and inheritances, it is not common for the Treasury to pursue the small deliveries of money or gifts of little value. Nevertheless… Finance can request bank information by detecting certain movements due to the regulations of Prevention of capital laundering and terrorism financingso keep it in mind: Income of more than 3,000 euros in cash to review that its origin is justified profits. Income in 500 euros tickets. They are the most monitored tickets by the Treasury because they are used for criminal activities. Entering a large amount of cash in these tickets will sow many suspicions. Recurring income. The entry of a fixed, periodic amount and from the same origin, indicate some type of commercial transaction and the Treasury will show interest in their nature. The small amounts sent to the same account in a short period of time have the same effect Transfers Entities notify the credits of more than 6,000 euros, and transactions of 10,000 euros or more. Whether they are bank transfers and cash movements. How do they pay children’s money to children? Donations, like inheritances, are taxed by the Donation and Succession Tax. Each autonomous community manages this tax under its criteria, so taxation will depend on the Autonomous Community in which the donor has resided in the last five years. Madrid, Basque Country, Murcia, Castilla-La Mancha, Asturias, Balearic Islands, Canary Islands, Galicia, Extremadura, La Rioja and Navarra are exempt from this tax or bonus it to 99.9% for spouses, parents and children. Andalusia bonuses 99% and other communities apply exemptions of up to 400,000 euros. If the donation exceeds that limit, it must be taxed by it. It is not a donation, but I “preside”. If what is intended with donation is to help financially in a complicated stage, there is an alternative to donation: formalize a loan without interest. This assumption is not subject to taxes or expenses and it is only necessary to formalize a private loan contract and the donor will have to submit the settlement of the property transmissions tax at zero cost. However, in that document the deadlines and the way in which the money will be returned, which can be extended both in time as desired, will be specified, which makes it especially interesting for the donation of large sums of money. What if the donation is not declared? If you choose not to declare the donation and hacienda, it detects that money has been received without justifying its origin, it will be interpreted as an unjustified assets. In that case, such and as indicated the OCU, a Taxation of the IRPF to the marginal type that can reach up to 56% of the donated amount, plus the corresponding sanction. In Xataka | Why Millionaires like Zuckerberg and Gates decide not to leave their children with their children? Image | Unspash (Alexander Gray) *An earlier version of this article was published in July 2024

Log In

Forgot password?

Forgot password?

Enter your account data and we will send you a link to reset your password.

Your password reset link appears to be invalid or expired.

Log in

Privacy Policy

Add to Collection

No Collections

Here you'll find all collections you've created before.