Why rich people donate to charity

A lot of people donate period. But.. a lot of rich people donate even more. Are they really that generous? Is there no truth to the old adage that “you always want more”, and “you never get rich by giving your money away”? or is there some ulterior motive that we’re all missing out on? They must be on to something. Well, not all the rich guys are art-flipping (buying a piece of art for $1, donating it, and getting a receipt back for $3), cos that’s illegal. Instead, they’ve set up their own charity trust and doing a bit of deferred giving.

A charity trust is a place you can stash your extra funds to reduce your extra income for the year. It’s still a ‘charity’, ie. you can’t use it to benefit yourself, but the benefit is that you don’t have to donate it straight away. So what you do is stash your money in the trust, invest it, and only donate all the profit proceeds to a charity of your choice when you feel the time is right - it could be this year, it could be next year, it could be next decade.

This form for charity is also called planned giving. It’s great. You get to reduce this years taxable income, still play with your money, and look like you’re the next Mother Teresa. Of course, there are some mega rich philanthropists giving from their hearts (Olivia Newton-John’s Cancer Foundation?), then then there are those who just have way too much (Bill Gates and Warren Buffett’s combined donation towards AIDS research and African poverty), and then there’s the average Jerry who’s idea of deferred giving is saving my money now so that I can give more later… deferred for later when I’m filthy rich and have way too much.

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