I just felt like whacking my very rich Republican neighbor over the head with my shovel.

[HiPointDem]

47. That's the PR face. It sounds good, but when you learn a bit more about how foundations

Last edited Sun Sep 9, 2012, 05:11 AM - Edit history (1)

work and what they do, it doesn't sound as good.

1) The wealth is not 'given away' -- it remains under the control of captive boards (if the donors are saavy enough to set things up to ensure that, & i'm sure warren is). In the case of the gates foundation, warren is currently on the board, & i'm sure his kids or some proxy will be when he dies.

Warren is not giving BH stock away all at once, or even at his death: it is being given bit by bit each year, and only so long as there are Gates family on the foundation board.

Only 5% of foundation assets must actually be 'given away' each year, which means on average, foundation principal will grow, not shrink.

2) Foundation capital is subject to no or very minimal taxation.

Q: How does a private charitable foundation lower my personal tax liability?
A: You as Founder can contribute up to 30% of your "adjusted gross income" which lowers the amount your tax is figured on and also lowers the %. This can be in cash or in personally owned assets. For example, a W-2 income of $100,000 can create a $28,000 tax liability; donating $30,000 to your foundation reduces that liability to $19,600, and saves you $8,400. For operating foundations 50% can be donated; in the same example as above, a $50,000 donation saves you even more. Results are dramatic for all tax brackets.

Q: Does my foundation have a required annual payout instead of paying taxes?
A: Yes. "Qualified Distributions" equal 5% of the average value of invested assets. (This 5% includes a 1-2% excise tax.) Distributions are paid out for administration and expenses, and to charitable activities of your choice.

Q: What taxes is my foundation exempt from?
A: Federal income tax, capital gains tax, estate and gift taxes. It also is exempt from sales tax on purchases it makes, and property taxes in some counties.

Q: You mean that it pays no capital gains on real estate or investments? Ever?
A: Correct.

Q: Who has control and makes the decisions for the foundation?
A: You and the Board of Trustees which you appoint.

http://www.the7thfire.com/freedom_sovereignty/private_foundations.html

3) Foundation investments can be and are used as financial & political weapons to steer the (global) economy & politics in desired directions -- for example, as the gates foundation is currently using theirs to privatize public education, marketize remaining peasant economies, promote genetically modified crops, and buy off scientists and others.

To take one little-known example of foundation influence -- they influence the cases the supreme court takes and the decisions they make.

http://journal.telospress.com/content/1984/62/59.short

Having insider information about what the foundation will be investing in is also useful when making one's private investments.

Foundations can also be used to prop up or crash stocks.

4) The 'investments' made by foundations are subject to no democratic oversight by the larger society, just the desires and power grabs of a handful of rich people. I doubt a majority of americans, or even world citizens, want an agriculture dominated by proprietary genetically modified crops, but that's what we're going to get -- and gates and buffett (his son's foundation is also significantly pushing this sector) are a large reason for that. Gates & Buffett are tightly partnered with Monsanto, for example.

5) Foundation actors can and do act in concert, moving huge amounts of capital to achieve their goals -- as Gates, Walton, and other foundation players are currently doing in education -- though as representative 'liberal' and 'conservative' actors, they are supposedly playing for different political 'teams'.

6) High-paid foundation jobs can provide nice sinecures for heirs, political payoffs, etc. Not to mention pay their health insurance & pensions, transportation including personal vehicles, furnish other tax writeoffs, etc.

7) There is also a certain amount of 'charitable immunity' in the law -- meaning that the foundation is somewhat immune from responsibility for harm it does, lawsuits, etc. In a number of states trust assets are completely immune.

8) Foundation grants are a means of controlling and in effect 'buying off' local/regional activist or charitable organizations that otherwise might cause trouble for the big boys, and to direct their activities into 'safe' channels.

The rise of foundation funding is probably the reason there are so many people to 'good works' out there while nothing much ever changes in the big picture and the need grows greater.


There is a reason that every wealthy person (and a lot of less wealthy ones) has their own foundations these days, and a reason that buffett set up his kids with their own foundations, as well as control of one in his wife's name -- let alone whatever private trusts he's set up for the kiddies. The reason is that you get to keep control of the money, no matter what the press releases say. People don't get to be rich as croseus because they're good guys who want to help other people. They get that way because they have a single-minded devotion to accumulating money and power.


Warren Buffett choose to celebrate the 82nd year of his life in a different way, announcing that he is donating shares of his company equivalent to $3.1 billion to his three kids’ foundations.

In 2006, Buffett made an initial contribution to the three foundations of 17.5 million Class B shares of his firm, Berkshire Hathaway. In an open letter published Thursday, he announced to his three children, Peter, Susan, and Howard, that he would be upping that donation by 12.2 million shares each by next July, decreasing by 5 percent per year subsequently.


In this pathbreaking study of foundation influence, author Joan Roelofs produces a comprehensive picture of philanthropy's critical role in society. She shows how a vast number of policy innovations have arisen from the most important foundations, lessening the destructive impact of global "marketization." Conversely, groups and movements that might challenge the status quo are nudged into line with grants and technical assistance, and foundations also have considerable power to shape such things as public opinion, higher education, and elite ideology. The cumulative effect is that foundations, despite their progressive goals, have a depoliticizing effect, one that preserves the hegemony of neoliberal institutions.

http://www.sunypress.edu/p-3716-foundations-and-public-policy.aspx