November, 15 2023, 08:09am EDT

New Report from the Institute for Policy Studies Reveals the True Cost of Billionaire Philanthropy
The new analysis details how the ultra-wealthy use charitable giving to avoid taxes and exert influence, while ordinary taxpayers foot the bill.
On November 15, the Institute for Policy Studies released a crucial new report revealing the true cost of billionaire philanthropy to taxpayers, the nonprofit sector, and our society.
The report comprehensively details how the ultra-wealthy use charitable giving to avoid taxes and exert influence, while ordinary taxpayers foot the bill.
As communities prepare to enter the season of giving and highlight charitable donations as a critical way to support communities’ urgent needs, this report reveals how the wealthiest donors in our society give differently than ordinary donors.
- The ultra-wealthy claim the lion’s share of the hundreds of billions in annual tax subsidies to incentivize charitable giving.
- Yet most donations by the ultra-wealthy flow to private foundations and donor-advised funds (DAFs), intermediaries controlled by these donors (As our report shows, 41 cents of every dollar of individual giving in 2022 went to one of these intermediaries). At best, this delays the flow of funds to working nonprofit charities on the ground. At worst, it leads to a warehousing of charitable funds. Private foundations are only required to payout 5 percent of assets annually to charities and donor-advised funds (DAFs) have no payout requirement. To make matters worse, some wealthy donors are playing shell-games to fulfill these minimal obligations.
- The most charitably-orientated billionaires in the U.S., those who have signed the Giving Pledge to donate half their wealth during their lifetime, are not immune from these trends. At their current pace, most funds will end up in perpetual family foundations, not in the hands of active charities.
As wealth concentrates in fewer hands, the imbalance is having a corrosive impact on our nonprofit sector. U.S. nonprofit charities are currently experiencing a transition from broad-based support across a wide range of donors to an increasing reliance on a small number of ultra-wealthy people, a trend IPS has named “top-heavy philanthropy.”
The report sounds the alarm over the way that wealthy donors are using taxpayer-subsidized giving systems to create perpetual foundations that extend their private power and influence.
Key findings include:
WEALTHY DONORS RECEIVE THE BIGGEST TAX BREAKS.
Millions of U.S. donors give directly to local charities without any reduction in their taxes. Less than ten percent of households use the charitable deduction. Wealthy donors, in turn, receive most of the taxpayer subsidies for charitable giving. The taxpayer subsidy for charity is hundreds of billions of dollars –and the wealthier the donor, the greater the taxpayer subsidy.
- The direct taxpayer subsidy for charitable giving was $73.24 billion in 2022 due to personal and corporate charitable deductions and is $111 billion including other known reductions in taxes. But the subsidy is several hundreds of billions a year if estate and capital gains tax reductions are included.
- The wealthier the donor, the greater the taxpayer subsidy for their donation. For every dollar a billionaire donates to charity, taxpayers chip in 74 cents in lost revenue. This is because wealthy donors not only reduce their income tax obligations, but also capital gains, estate and gift taxes.
RISE OF DONOR-CONTROLLED INTERMEDIARIES.
Low and middle income givers are more likely to give directly to local nonprofit charities in their community including youth centers, food banks, and organizations addressing poverty, social needs, arts, and environmental issues.
In contrast, the report finds that wealthy donors are more likely to contribute to their own private foundations and donor-advised funds (DAF), intermediaries that they continue to control. These donors receive immediate tax reductions in the year of their donation, but as this report shows, the funds may take decades to reach working charities, if ever.
An estimated 41 cents of every 2022 individual donation going to charity went to either a private foundation or DAF, up from 37 percent in 2021. In 2022, 27 percent of individual donations went to DAFs, up from 22 percent in 2021. In 2022, 14 percent of individual donations went to private foundations.
“One of the main drivers of DAF growth is the financial industry’s aggressive marketing of DAFs for their considerable tax benefits, secrecy, and non-existent payout rate,” observed Chuck Collins, author of the report.
Over the past five years, the median payout rate for private foundations has hovered between 5.2 and 5.6 percent. And this payout includes compensation to trustees, overhead, and donations to donor-advised funds (DAFs) which have no payout.
Donations to DAFs are now more than a quarter of all U.S. individual charitable giving. The $85.5 billion donated to DAFs in 2022 made up a full 27 percent of the $319 billion in individual giving that year, up from $73.34 billion and 22 percent in 2021.
The largest DAF sponsors now take in more money each year than our largest public charities. By 2021, seven of the top ten recipients of charitable revenue in the country were DAF sponsors, including the four largest affiliated with Fidelity, Schwab, Vanguard and the National Philanthropic Trust.
A significant amount of DAF grants go to other DAFs. We found $2.5 billion in grants going from national donor-advised funds to other national donor-advised funds in 2021 alone.
GIVING PLEDGERS NEED TO PICK UP THE PACE.
The report analyzes the progress of the Giving Pledge, founded in 2010 by Bill Gates and Warren Buffett, that has inspired over 220 billionaires to pledge to donate half of their wealth during their lifetime. The report found that while a handful of donors are moving funds in a timely manner, most have seen their wealth dramatically increase over the fourteen years since the start of the Giving Pledge and need to pick up the pace of giving.
The report suggests that most of these pledges will be fulfilled by donations to private family foundations and donor-advised funds, delaying the public benefit of the taxpayer subsidized donations. In the worst case, some Pledgers have used their philanthropy for self-serving purposes, such as taking out loans from their foundations or paying themselves hefty trustee salaries.
The 73 living U.S. Giving Pledgers who were billionaires in 2010 saw their wealth grow by 138 percent, or 224 percent when adjusted for inflation, through 2022. Their combined assets increased from $348 billion in 2010 to $828 billion over those twelve years.
Of these 73 people, 30 of them have seen their wealth increase more than 200 percent when adjusted for inflation. Those with the greatest growth include Mark Zuckerberg and Priscilla Chan (1,382 percent), Dustin Moskovitz and Cari Tuna (1,166 percent), Elaine and Ken Langone (755 percent), Arthur M. Blank (739 percent), and Bernie and Billi Marcus (714 percent).
Of the $12 billion in identifiable gifts of over $1 million that the Giving Pledge signers donated to charity in 2022, 68 percent — more than $8 billion — went either to foundations or to DAFs.
The action of some billionaire donors raise concerns that what began as a civic-minded initiative to spur generosity is instead serving to concentrate private wealth and power at taxpayer expense.
“The missing voice in the philanthropy discussion is the U.S. taxpayer, who subsidizes the private giving of billionaires to the tune of several hundred billion a year,” explains Chuck Collins, co-author of the report and the director of the Program on Inequality and the Common Good at the Institute for Policy Studies. “We should be alarmed at the ways billionaires use philanthropy as a taxpayer-subsidized extension of their private power and influence.”
“We need to update the laws governing philanthropy to keep the financial industry from capturing it and turning it into another tax dodge for the wealthiest people in our society,” Collins adds.
Key recommendations to reform charitable giving and ensure more money ends up in the hands of actual active charities, where it’s needed most:
- Implement a payout requirement for donor-advised funds
- Raise the minimum payout rate requirement for private foundations
- Prevent grants to DAFs from counting towards foundation payout
- Require sponsors to report on DAFs on an account-by-account basis
- Implement a universal charitable tax credit for non-itemizers
“We have to make sure that the tax breaks we underwrite are actually funding charities actively working for the public good,” warns Helen Flannery, co-author of the report and a researcher at the Institute for Policy Studies who is an expert on philanthropy and charitable giving.
“We hope this report will encourage policymakers, the media, and the public to look at the charitable pronouncements of billionaires with more scrutiny,” she adds. “Sometimes their giving is a genuine attempt to give back, but other times it is more about enhancing their political voice, their reputation, or their wallet.”
Full report: https://ips-dc.org/report-true-cost-of-billionaire-philanthropy
Institute for Policy Studies turns Ideas into Action for Peace, Justice and the Environment. We strengthen social movements with independent research, visionary thinking, and links to the grassroots, scholars and elected officials. I.F. Stone once called IPS "the think tank for the rest of us." Since 1963, we have empowered people to build healthy and democratic societies in communities, the US, and the world. Click here to learn more, or read the latest below.
LATEST NEWS
Caving to Trump, Canada Drops Tax on US Tech Firms
One journalist accused Canadian Prime Minister Mark Carney of chickening out.
Jun 30, 2025
Acquiescing to pressure from the Trump administration, the Canadian government announced on Sunday that the country will rescind the digital services tax, a levy that would have seen large American tech firms pay billions of dollars to Canada over the next few years.
The Sunday announcement from the Canadian government cited "anticipation of a mutually beneficial comprehensive trade arrangement" as the reason for the rescission.
"Today's announcement will support a resumption of negotiations toward the July 21, 2025, timeline set out at this month's G7 Leaders' Summit in Kananaskis," said Canadian Prime Minister Mark Carney in the statement.
The digital services tax impacts companies that make over $20 million in revenue from Canadian users and customers through digital services like online advertising and shopping. Companies like Uber and Google would have paid a 3% levy on the money they made from Canadian sources, according to CBC News.
The reversal comes after U.S. President Donald Trump on Friday blasted the digital services tax, calling it a "direct and blatant attack on our country" on Truth Social.
Trump said he was suspending trade talks between the two countries because of the tax. "Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately. We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period," Trump wrote. The United States is Canada's largest trading partner.
Payments from tech firms subject to the digital services tax were due starting on Monday, though the tax has been in effect since last year.
"The June 30, 2025 collection will be halted," and Canada's Minister of Finance "will soon bring forward legislation to rescind the Digital Services Tax Act," according to the Sunday statement.
"If Mark Carney folds in response to this pressure from Trump on the digital services tax, he proves he can be pushed around," said Canadian journalist Paris Marx on Bluesky, speaking prior to the announcement of the rescission. "The tax must be enforced," he added.
"Carney chickens out too," wrote the author Doug Henwood on Twitter on Monday.
In an opinion piece originally published in Canadian Dimension before the announcement on Sunday, Jared Walker, executive director of the progressive advocacy group Canadians for Tax Fairness, wrote that all the money generated for the tax could mean "more federal money for housing, transit, and healthcare transfers—all from some of the largest and most under-taxed companies in the world."
Walker also wrote that the digital service tax could serve as a counterweight to the so-called "revenge tax" provision in Trump's sprawling domestic tax and spending bill.
Section 899, called "Enforcement of Remedies Against Unfair Foreign Taxes," would "increase withholding taxes for non-resident individuals and companies from countries that the U.S. believes have imposed discriminatory or unfair taxes," according to CBC. The digital services tax is one of the taxes the Trump administration believes is discriminatory.
"If 'elbows up' is going to be more than just a slogan, Canada can't cave to pressure when Donald Trump throws his weight around," wrote Walker, invoking the Canadian rallying cry in the face of American antagonism when it comes to trade.
"But this slogan also means the Carney government has to make sure it is working on behalf of everyday Canadians—not just the ultra-rich and big corporations that are only 'Canadian' when it's convenient," Walker wrote.
Keep ReadingShow Less
Sanders Calls Trump-GOP Budget Bill 'Most Dangerous Piece of Legislation' in Modern US History
"In my view, nobody in the Senate or the House should vote for this legislation," said Sen. Bernie Sanders.
Jun 30, 2025
U.S. Sen. Bernie Sanders condemned the Republican budget reconciliation package in stark terms during a floor speech late Sunday, calling the measure "the most dangerous piece of legislation in the modern history of our country" and warning that its massive cuts to Medicaid, federal nutrition assistance, and other programs would have deadly consequences nationwide.
"Over 50,000 Americans will die unnecessarily every year," said Sanders (I-Vt.), referring to a recent study by researchers at the University of Pennsylvania and Yale, who examined the likely impacts of Republicans' proposed healthcare cuts.
The nonpartisan Congressional Budget Office estimated over the weekend that the Senate reconciliation package, which could pass as soon as Tuesday, would slash Medicaid by more than $1 trillion and strip health insurance from nearly 12 million Americans over the next decade.
All of that "to give tax breaks to billionaires who don't need them," Sanders said Sunday, calling the Republican legislation "a death sentence for low-income and working-class people."
"This legislation is the most significant attack on the healthcare needs of the American people in our country's history," the senator added.
Sanders' remarks came hours before the Senate was set to begin the notorious vote-a-rama process whereby senators can offer an unlimited number of amendments to the reconciliation package, which, if passed, would trigger what analysts have described as the largest transfer of wealth from the poor to the rich under a single law in U.S. history.
The Vermont senator said Sunday that he intends to offer amendments aimed at slashing prescription drug costs, removing an estate tax break from the GOP legislation, and eliminating a provision that would give the Pentagon another $150 billion.
"We don't have enough money to feed hungry children," Sanders said sardonically. "We don't have enough money to make sure that people continue to have the healthcare that they need. Don't have enough money to make sure the kids can get a decent education. But somehow, the military-industrial complex is going to get another $150 billion."
"In my view," Sanders continued, "nobody in the Senate or the House should vote for this legislation."
Keep ReadingShow Less
Trump Urges Gaza Cease-Fire Deal—And End to Netanyahu Corruption Trial in Israel
The U.S. president's comments came as Israel's military continued to kill Palestinians and order evacuations in the besieged enclave.
Jun 29, 2025
"MAKE THE DEAL IN GAZA. GET THE HOSTAGES BACK!!!" U.S. President Donald Trump said on social media early Sunday, as Israeli forces—armed with billions of dollars in military support from the United States—continued their nearly 21-month annihilation of the Palestinian territory.
Trump's Truth Social post came after he suggested on Friday that there could be a cease-fire deal between the Israeli government and Hamas, a Palestinian militant group that governed Gaza for nearly two decades and led the October 7, 2023 attack on Israel, "within the next week."
As The Associated Pressreported Sunday:
Ron Dermer, a top adviser to Prime Minister Benjamin Netanyahu, was set to travel to Washington this week for talks on a cease-fire, an Israeli official said, and plans were being made for Netanyahu to travel there in the coming weeks, a sign there may be movement on a deal.
Netanyahu was meeting with his Security Cabinet on Sunday evening, the official said on condition of anonymity to discuss plans that hadn't been finalized.
Trump's post calling for a deal also came just hours after he took to his Truth Social network to criticize the corruption trial that Netanyahu faces in Israel. Some critics of the prime minister have accused him of continuing the assault on Gaza to avoid his legal issues at home.
Saturday evening, Trump wrote:
It is terrible what they are doing in Israel to Bibi Netanyahu. He is a War Hero, and a Prime Minister who did a fabulous job working with the United States to bring Great Success in getting rid of the dangerous Nuclear threat in Iran. Importantly, he is right now in the process of negotiating a Deal with Hamas, which will include getting the Hostages back. How is it possible that the Prime Minister of Israel can be forced to sit in a Courtroom all day long, over NOTHING (Cigars, Bugs Bunny Doll, etc.). It is a POLITICAL WITCH HUNT, very similar to the Witch Hunt that I was forced to endure. This travesty of “Justice” will interfere with both Iran and Hamas negotiations. In other words, it is INSANITY doing what the out-of-control prosecutors are doing to Bibi Netanyahu. The United States of America spends Billions of Dollar a year, far more than on any other Nation, protecting and supporting Israel. We are not going to stand for this. We just had a Great Victory with Prime Minister Bibi Netanyahu at the helm—And this greatly tarnishes our Victory. LET BIBI GO, HE’S GOT A BIG JOB TO DO!
Then, Reutersrevealed Sunday that the Jerusalem District Court canceled this week's hearings for Netanyahu's trial, "accepting a request the Israeli leader made citing classified diplomatic and security grounds."
The news agency noted that "it was unclear whether a social media post by... Trump influenced the court's decision."
Meanwhile, Netanyahu's military kept slaughtering Palestinians in Gaza this weekend. In addition to the warrant for the prime minister issued last year by the International Criminal Court—which sparked retaliation from Trump—Israel faces a genocide case at the International Court of Justice.
Gaza health officials said that as of midday Sunday, Israeli attacks had killed at least 86 people in the previous 24 hours, and put the death toll since October 2023 at 56,500, with 133,419 others wounded.
With thousands more Palestinians missing in the destroyed enclave, researchers have warned that the true toll could be far higher, particularly when accounting for deaths from causes such as disease, hunger, and exposure to cold temperatures.
The Israeli military on Sunday issued evacuation orders for neighborhoods in Gaza City and other northern areas of the strip.
According to the BBC:
Medics said five people were killed in an Israeli airstrike on a tent housing displaced people in al-Mawasi near the southern city of Khan Younis—an area where people in the north had been told to evacuate to.
Five members of the Maarouf family, including three children, were killed.
"They bombed us while we were sleeping on the ground," their mother Iman Abu Maarouf said. "We didn't do anything wrong. My children were killed, and the rest are in intensive care."
Israel's attacks have crippled Gaza's healthcare system, and its blockade has limited the flow of essentials, from medical supplies to food. Israeli troops have also killed Palestinians seeking aid from the U.S.-backed Gaza Humanitarian Foundation (GHF).
The Médecins Sans Frontières (MSF)—or Doctors Without Borders—emergency coordinator in Gaza, Aitor Zabalgogeazkoa, excoriated the GHF operation and Israeli forces in a Friday statement.
"The four distribution sites, all located in areas under the full control of Israeli forces after people had been forcibly displaced from there, are the size of football fields surrounded by watch points, mounds of earth, and barbed wire. The fenced entrance gives only one access point in or out," he said. "GHF workers drop the pallets and the boxes of food and open the fences, allowing thousands in all at once to fight down to the last grain of rice."
"If people arrive early and approach the checkpoints, they get shot. If they arrive on time, but there is an overflow and they jump over the mounds and the wires, they get shot," Zabalgogeazkoa continued. "If they arrive late, they shouldn't be there because it is an 'evacuated zone,' they get shot."
Sharing the statement on social media Sunday, MSF said: "This is not humanitarian aid. It is slaughter."
Keep ReadingShow Less
Most Popular