Tesla CEO Elon Musk is not shy about promoting new products or SpaceX updates, but he can be reserved about his philanthropy. In fact, he has a right to privacy in his giving. Musk donated roughly $5.7 billion of Tesla shares to charity in 2021. No tweet or public announcement preceded or succeeded the gifts. They came to public light through a recent Securities and Exchange Commission filing. The donations were made during a series of stock sales totaling $16 billion.
These multi-billion dollar gifts earned Musk the number two spot in The Chronicle of Philanthropy’s 2021 ranking of top givers, behind Bill and Melinda French Gates. However, Musk’s move to give away the shares without public disclosure has also ranked him high on the naughty list for some in the philanthropic world who demand answers about which charities benefited.
Time reporter Alejandro de la Garza writes, “Observers have a couple big questions. Namely, where did all that money go? And why all the secrecy?”
The Urban Institute’s Benjamin Soskis told The Chronicle of Philanthropy, “When you’re giving away that much money, it is by definition a matter of public interest where it’s going to.” He also tweeted, “Come on. There has to be a middle-ground btw preening, self-congratulatory mega-giving & complete non-disclosure. If not, we’re gonna need a pretty radical overhaul of our regs relating to individual giving & anonymity.” Soskis even suggested a gift of $5 billion and over merits public announcement, calling it “a fundamental matter of public interest.”
This curiosity about charitable gifts is understandable, but the heart of the issue is donor privacy. Should philanthropists be entitled to give without putting their names on gifts? Opponents claim donors should have no such right and Musk’s undisclosed donations provide another opportunity to hit home on that point. Here’s why these critics are wrong.
Individual givers may wish to remain private for numerous reasons, including religious tradition, modesty or a desire to avoid unwanted solicitations. In today’s divided society, givers may also wish to avoid potential threats and retaliation for giving to causes that are, or may become, controversial or unpopular with individuals in positions of power. … Privacy in association fundamentally protects the voice of those with minority views.
Calls for donors to be more public about their gifts are long-standing but growing. Over the past few years, bills have been filed in a number of state legislatures to limit the rights of donors to give anonymously. These proposals for government-mandated disclosure are alarming and indicative of a rising trend that must be challenged. Make no mistake: the aim is to shame donors for political and social reasons, and starve causes of funding, thereby hampering their efforts.
Encouragingly, groups on the left, right and center are coalescing to oppose such efforts and to actively promote legislation that protects donor privacy. In a major win in 2021, the Supreme Court affirmed Americans’ constitutional rights to donor privacy in a case challenging a California disclosure law. This case joined multiple other Supreme Court precedents that upheld the right to associate – including the right to give – and to do so without the public disclosures of names and information. The Court specifically highlighted threats that forced disclosure leads to against donors and recipients, noting, “Such risks are heightened in the 21st century and seem to grow with each passing year, as ’anyone with access to a computer [can] compile a wealth of information about’ anyone else, including such sensitive details as a person’s home address or the school attended by his children.”
Musk is no wallflower. He may not worry about being canceled by social media mobs for supporting causes they disfavor. He can also afford top-notch private security. Not every donor is in such a position.
Nevertheless, he may have other motivations for keeping this round of gifts quiet. Marcius Extavour, a senior executive at XPrize, a nonprofit managing Musk’s $100 million carbon removal prize, believes Musk cares little about public recognition for the gift. “Some people are really focused on the appearance, or, frankly, the communications value. His instruction to us about the content of the prize was to make it really good. Just make this mean something,” he said.
Musk has been public about his philanthropy before. In March of last year, he tweeted about a $20 million donation to schools in a Texas county and a $10 million gift to a Texas city for downtown revitalization. Also, in 2018, he tweeted he had sold more than $100 million in Tesla stock for charity and promised to do this every two years as well as making “major disbursements” in about 20 years.
Whatever Musk’s reason for not disclosing his most recent gifts is his business. What matters most is he is following through on his commitment to help others with massive charitable donations that could be transformative for the recipients and those they serve.