Elon Musk Donates $112M To Charities In A Move That Will Save Him $2B In Taxes

According to an analysis from Alan Cantor Consulting, Musk's charity is little more than a tax shelter to avoid being taxed on money he generates.

On the heels of a New York Times report that indicates that Elon Musk’s charity missed the required 5% donation mark for three consecutive years, the world’s richest man has donated 268,000 shares of Tesla stock, valued at $112 million to unnamed charities as part of his year-end tax contributions.

According to Bloomberg, a Securities and Exchange Commission filing registered on Dec. 31 states that the donation is part of Musk’s “year-end tax planning” and went to “certain charities,” which were unnamed in the documentation.

In 2021, Musk made a similar transaction and circulated $5.7 billion in Tesla stock to an unnamed charity, later revealed to be his own nonprofit organization, The Musk Foundation.

Per Bloomberg‘s reporting, the foundation appears to be little more than a shell company. In 2024, most of the $237 million in gifts it gave away were simply funds redirected to Musk’s own companies.

Per the aforementioned New York Times report, between 2020 and 2023, the Musk Foundation was well short of the amount it was required to give away as a charitable organization.

As a result, Musk had to give away at least $421 million of his funds tied up in the foundation by the end of the year or face a sizable penalty from the Internal Revenue Service.

As the Times noted, although other large charitable organizations have failed to distribute the minimum amount required by the IRS, the Musk Foundation is unique regarding the speed with which its shortcomings have increased and the shortfall amount.

Brian Mittendorf, an accounting professor at Ohio State University, told the New York Times that it is clear to him that the shortfalls indicate an organization that is not motivated to spend its money.

“The distributions made by the foundation are meeting the bare minimum to avoid penalties. It is clear that the organization is not in a hurry to spend its money,” Mittendorf said.

According to an analysis from Alan Cantor Consulting, Musk’s charity is little more than a tax shelter to avoid being taxed on the money he generates.

The group’s analysis indicated that Musk saves approximately $2 billion in tax payments by moving money from Tesla to the Musk Foundation.

The Alan Cantor Consulting group also makes parallels between Musk’s foundation and President-elect Donald Trump’s Donald J. Trump Foundation, which was shut down by the State of New York in 2019 after it was discovered that Trump’s foundation was basically used as a checkbook for whatever Trump thought would bolster his public image or pay for his personal obligations.

According to Alan Cantor Consulting, “Essentially, Musk –- like Trump -– thinks the rules don’t apply to him. If Musk says it’s a charitable priority, it is. He can make the decisions himself and have the bookkeeper at the Musk family office cut a check. If he fails to make the requisite payout, he has the foundation pay the fine. He gets to keep his tax break whether he runs the foundation well or poorly. Meanwhile, he gives to causes that enhance his businesses and image, and he doesn’t quite step over the legal line into self-dealing.”

They continued, “And throughout, he maintains power. Even though he’s done a miserable job of distributing grants to worthy causes, and even though his charitable preferences have more to do with helping himself than making the world a better place, Musk nevertheless holds the keys to one of the largest charitable foundations in the country. The potential grants from his foundation give him power. People will cozy up to him in the hope that some money will eventually flow their way if they only play their cards right. Musk is a terrible man, but he’s not stupid. This all works for him.”