Google co-founder and billionaire Larry Page is the subject of a report Wednesday from tech journal ReCode which shows how the Silicon Valley super-rich use workarounds in managing their private foundations that avoid direct contributions to actual charities.
Page’s Carl Victor Page Memorial Foundation pushed around $400 million in publicly announced Christmastime donations between 2015 and 2017, but none of it reportedly went directly to charity.
“This a very bad look for Larry Page,” tweeted National Committee for Responsive Philanthropy researcher Ryan Schlegel.
As ReCode reporter Teddy Schleifer described in his piece on the billionaire, Page’s foundation funnels cash primarily into funds which allow their benefactor a measure of control.
“What Page was doing each year was something of a philanthropic sleight of hand,” wrote Schleifer.
Private foundations are required by law to disburse at least 5 percent of their assets a year, a requirement meant to make sure that these taxpayer-subsidized philanthropies actually took part in charity.
But in recent years, Page’s foundation has made last-minute donations to hit the threshold only by making bulk donations to separate charitable accounts Page also had some control over, donor-advised funds (DAFs). Those donations technically count as contributions by the foundation, helping it meet the 5 percent standard, even though that money can then sit in the donor-advised funds indefinitely, with no requirement that it goes to needy nonprofits.
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“Donations from the foundations to the DAF count toward the 5 percent, even if the DAF then sits on the millions indefinitely,” Schleifer added.
The billionaire did donate $21 million from his foundation to charity, but, as ReCode shows, the amount funnelled to DAFs was far greater.
As a result of the DAF system the money in the funds can remain, untaxed, forever. It’s a clever tax workaround that uses the specter of altruism to mask a cold calculation over how to hoard capital.
While experts say many charitable foundations use DAFs in a responsible and reasonable manner, ReCode‘s analysis showed that Page’s use of it is in a class of its own.
“It is possible,” wrote Schleifer, “that Page is the country’s greatest exploiter of this loophole.”
Given Page’s foundation’s size and power, said National Committee for Responsive Philanthropy’s Schlegel, the billionaire is not only sitting on tax-free money—he’s sitting on power.
“If he wants to avoid public disclosure of the recipients of his largesse he’s perfectly free to set up an LLC as some of his very rich peers have done lately,” said Schlegel. “But this set up is publicly subsidized influence laundering.”Print