Why not give all your money to charity?
In all my years as a philanthropist, I've never been asked this question.
But I've definitely thought about it a lot. I have more than I need myself. Why not
give virtually all of it to charity today and keep maybe $20M or so to live on?
There are several reasons you don't want to do this.
- I just started another company. I don't want to be diluted as I raise more rounds.
Having the ability to fund it myself means I have the freedom to pursue ideas that I think
are important. And being able to participate in future rounds to preserve my equity means
everyone wins. And it means I can make a lot more money to give to charity, more money
than would have been donated had I taken everything and just put it in my charitable fund
now. Because if I transferred in the cash and then created the new startup and asked my
fund to invest, they would wisely view it as an "unsafe" and risky investment
and financially irresponsible.
- There are some charitable causes that can't be funded from my foundation because the
government doesn't view them as "charitable". So things like:
- supporting a candidate for political office
- reforming politics, e.g., campaign finance reform
- putting an initiative on the ballot, e.g., to have dirty vehicles subsidize EVs or to
make it legal to sell body parts of dead people (sounds gross I know, but it's a great
cause that can save tens of thousands of lives)
- ...and probably others I haven't thought about...
- I have a lot more control on how the funds are invested now, than if they are donated to
my foundation. I can use that to get a higher return.
- I have more flexibility with the funds. Once donated to the foundation, I can never get
it back. It's a one-way street.
So the bottom line is that it is a balancing act. Keeping some in reserve now can mean
a lot more later. But keeping it all in reserve now is foolish.