Columnists
(Charitable) Adventurers in Space
Maybe they all grew up watching the dashing, pompous and utterly incompetent Link Hogthrob captain the Swinetrek segments on that old television series The Muppet Show. Because there’s a confluence of the energies of Jeff Bezos, Richard Branson and Elon Musk around space travel.
Mr. Bezos has announced that he will enter orbit on his Blue Origin spacecraft on July 20 this year. Having just shed his mantle as the CEO of Amazon, he is free to indulge his space travel fantasies. He is taking along with him his brother, 82-year-old female former trainee astronaut Wally Funk, and the winner o f a charity auction (top bid: $28 million). No word on what his insurance coverage is. Come to think of it, he could probably scrape by without insurance;
Mr. Bezos is seeking to be on first privately owned aircraft into outer space. Not to be outdone—and because boys will be boys with their toys—Mr. Branson’s Virgin Galactic will launch on July 11, nine days before Mr. Bezos, Mr. Branson will be on board; standing in line to take trips are about 600 people who have made deposits at over $200,000 a pop.
In the meantime, Mr. Musk, who has committed his SpaceX enterprise to putting a million people on Mars by 2050, has been sending spacecraft to the International Space station and the moon, and launching satellites hither and yon to bring Internet coverage to the whole world.
Some may agree with their enthusiasms. Many others will not. Are we entitled to knock these tech billionaires for spending too much money on their pet projects? In their defence, they all came by their fortunes honestly, they’ve paid taxes, and a goodly chunk of their money is at least circulating around in the economy rather than sitting rotting in a vault.
More pointedly, should they be entitled to indulge their fantasies because they are philanthropists?
That they are philanthropists is beyond doubt. Mr. Branson and Mr. Musk have signed the Giving Pledge —a billionaires’ club covenant to give away at least half of their estates to charity on or before their deaths. Initiated 10 years ago by Warren Buffet and Bill and Melinda Gates (when they were still an item), the pledgor list includes Michael Bloomberg, Charles Bronfman, David Rockefeller and Mark Zuckerberg.
And Mr, Bezos, even though he is not a pledgor, has given $2 billion to a charitable fund fo fight homelessness and support early childhood education; has pledged $10 billion to address climate change; and has given his former wife $38 billion as a divorce settlement—$ 4.2 billion of which she has already given away to charity.
But should all three of our space heroes should get a free pass to self-indulgence? Not necessarily so, say the authors of Gilded Giving 2020, a report by the US based Institute for Policy Studies. They cite a number of problems:
Billionaires’ wealth is increasing at a faster rate than they can give it away. In the US, it nearly doubled over the 10-year period between 2010 and 2020. And giving money away thoughtfully requires hard work and takes time.
A lot of money is ‘warehoused’—given to charitable foundations that are allowed to exist in perpetuity, and that distribute only their net income to on-the-ground charities. The authors argue that there should be higher minimum distribution thresholds—something that our finance minister is also looking into here in Canada.
Donors exercise too much control over their money after it has been set aside for charity by giving it to family-controlled foundations or funds where the donor has the ongoing authority to decide which charities receive grants.
Charitable giving has become ‘top heavy’ as smaller and medium sized donors are marginalized —which is undemocratic, because it means that social priorities are effectively being set by the wealthy and not by elected governments.
Donations are smaller than they appear: There is a de facto subsidy to billionaire donors in foregone tax revenue of around 75 per cent of the face value of their donations.
So the answer to my question is, no, these billionaire space adventurers shouldn’t get a free self-indulgence pass just because they are also philanthropists.
Maybe the solution is to give people the same tax breaks for paying their taxes as they would for making charitable gifts. Or by taxing trips into the stratosphere at stratospheric levels Link Hogthrob would approve.
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