Elon Musk debates how to give away world’s biggest fortune

Tesla founder turns to Twitter for advice after becoming richest man on Earth

FILE PHOTO: Tesla Motors Inc CEO Elon Musk unveils a new all-wheel-drive version of the Model S car in Hawthorne, California October 9, 2014. REUTERS/Lucy Nicholson/File Photo

Elon Musk is not only the world’s richest person, he lays claim to the biggest net worth ever recorded: $209 billion as of Friday.

What he does with it will be closely watched.

One of the Tesla founder’s first reactions on becoming the wealthiest human, after an initial shrug, was to ask for advice on how to give it away.

Mr Musk, 49, is a newcomer to philanthropy, compared with those beneath him on the Bloomberg Billionaires Index of the world’s 500 wealthiest people.

Long-time number one Bill Gates and his friend Warren Buffett, co-founders of the Giving Pledge initiative that urges the ultra-wealthy to donate at least half their fortunes, have each given away tens of billions in cash and stock.

Even Jeff Bezos, who has been criticised as slow to enter philanthropy, has stepped up his game.

Mr Bezos pledged to give $9.99bn to issues related to climate change last year and handed out $787 million to 16 environmental groups in November.

Despite signing the Giving Pledge, Mr Musk has done relatively little publicly in the way of charity.

He has donated more than $250m to the Musk Foundation, equal to about 0.1 per cent of his current net worth. It distributed about $65m between 2016 and 2018 to about 200 non-profit organisations, analysis by Quartz showed.

Had Mr Gates not given away so much, or Mr Bezos not been divorced, their fortunes would be far bigger, possibly greater than Mr Musk’s.

But he has indicated that the reason he’s accumulating wealth is to give it away, or at least redirect it to his passion projects, namely space exploration.

“It’s going to take a lot of resources to build a city on Mars,” he told German publisher Axel Springer last month. “I want to be able to contribute as much as possible.”

Benjamin Soskis, senior research associate at the Urban Institute’s Centre on Nonprofits and Philanthropy, said: “It’s impossible to overstate the potential his fortune could have.

“We’re dealing with a scale that is difficult to fathom.”

The surge in Mr Musk’s wealth means he will need to greatly increase the pace of donations to have any shot at fulfilling his pledge to give more than half of it away, Mr Soskis said.

“He needs to be much more aggressive than he’s being now.”

The question from philanthropy experts is how Mr Musk will go about doing so. The world’s richest people have taken a variety of approaches.

Mr Gates has become a full-time philanthropist and public figure in areas such as public health.

Twitter co-founder Jack Dorsey has made his giving transparent by posting each donation to a publicly available spreadsheet.

By turning to Twitter to get suggestions for donations, Mr Musk is following in the footsteps of Mr Bezos, who sent out a similar tweet requesting ideas from his followers in 2017.

MacKenzie Scott, Mr Bezos’s former wife, has pioneered another model for billionaire giving.

Ms Scott approaches hundreds of non-profits and educational institutions, handing over big cheques with no strings attached. Her gifts in 2020 were of almost $6bn.

Brian Mittendorf, an Ohio State University professor who studies non-profit organisations, suggested Mr Musk follow Ms Scott’s lead and restrain his instincts to innovate.

“A trap that many wealthy philanthropists fall into is a desire to reinvent philanthropy on their own, rather than rely on those who already have expertise and experience but simply need the funds in order to expand their impact,” Dr Mittendorf said.