The private foundation of the world’s richest man failed to donate the legally required amount for the third consecutive year.
Per what’s known as “the 5 percent rule,” private foundations are required by law to direct at least 5 percent of their assets toward charitable causes. The Musk Foundation is among the largest of such foundations, boasting $9 billion in assets, including millions of shares of Musk’s electric vehicle company, Tesla.
But The New York Times reported Thursday that the Musk Foundation fell $421 million short of the 5 percent rule in 2023, making it the third year in a row that it missed the mark. The foundation was short by $234 million in 2022 and $41 million in 2021, but later forked up to cover those gaps and avoid a penalty tax.
In contrast to the foundations of other wealthy philanthropists, which tend to focus on broad social causes and the public good, Musk’s private foundation is somewhat unconventional in its focus on serving the interests of its founder. The charity also has no hired staff and is instead run by a three-member volunteer board, including Musk himself.
As the Times reported in March, the Musk Foundation “has been haphazard and largely self-serving—making [Musk] eligible for enormous tax breaks and helping his businesses.” In 2021 and 2022, around half of the foundation’s donations were linked in some way to Musk himself, his businesses, or his employees, according to the Times.
For failing to meet the legal minimum, the foundation “can distribute more the following year as a make-good”—or pay a hefty penalty to the IRS.
But Musk recently indicated that the IRS could be on the chopping block of the proposed Department of Government Efficiency under the Trump administration. “The IRS just said it wants $20B more money,” Musk posted on his platform X last month, asking users to vote on whether its budget should be “increased,” “same,” “decreased,” or “deleted.” The latter won with 60 percent of users’ votes.