It's kind of his money that he controls. He can do a lot with it, but he can't buy a yacht with it... You don't get the favorable tax treatment without a ton of restrictions on how you can spend the money.
He can't buy a yacht with his Foundation money, but he already has a yacht.
Think of it this way: Gates has a certain list of things he wants to spend money on. The government likes some of those things and forgoes taxes on them.
That doesn't change the fact that Gates is spending his money on exactly what he wants to. The restrictions are essentially irrelevant to him.
Yea that’s pretty much the only way. Mercy Ships is a major charity that does similar. And to the commenter who mentioned the trump foundation, it was charged with fraud, fined $2M, and dissolved. So probably not a great example.
My understanding is that there are actually very few restrictions on what kind of expenses charitable foundations can use their funds toward. The public’s attention was drawn to this because of media reporting on some of the more ludicrous outlays of the Trump Foundation.
>It's kind of his money that he controls. He can do a lot with it, but he can't buy a yacht with it... You don't get the favorable tax treatment without a ton of restrictions on how you can spend the money.
Bill Gates would never need to buy a yacht with his foundation money because he would buy a yacht before he made it foundation money.
It's like saying I can't buy a new TV with my retirement funds, but, I can certainly buy a new TV and contribute less to my retirement funds -- the end result is the exact same dollars went to the exact same end, I just organized them differently.
A version of this is that every kid who got scholarship money or loans knows how to bucket expenses to use your "limited use" dollars on qualifying expenses that would otherwise be paid by general funds, freeing up general funds for things. The net result is that the loans paid for nonqualified expenses, but they were organized appropriately.
To be a bit facetious, that's like saying that I still possess all of the money I spent on groceries because I chose to spend it that way... at some point it's not my money anymore. I agree that Bill Gates still exerts some control over the money, but if he can't actually do anything he wants with it, then it's not wealth the same way cash, or even stock is.
At a certain point it starts to become silly to talk about wealth as the ability to buy things, rather than the ability to organize a large portion of the world's economic systems. That's specifically what his foundation can do as long as it's within a fairly broad set of parameters.
> To be a bit facetious, that's like saying that I still possess all of the money I spent on groceries because I chose to spend it that way... at some point it's not my money anymore.
I mean, you could say that groceries are part of your net worth, and immediately after purchase are roughly similar in value to the money you traded for them. Obviously people don't tend to bother counting their groceries as part of their net worth, mostly because they go bad or are consumed quickly and comprise a tiny percentage of most people's net worth.
But, in general, yes, your net worth is the value of everything you own (minus your debt). It's not at all crazy to say that, when you buy something very valuable or transfer money to a foundation which you control, your net worth is not changing much.
The point was that this is how he chooses to spend his money. For whatever reason I guess it makes him feel good. Which his cool but he has vastly more autonomy over his money than regular mortals - as do many other HNW individuals, they’re not all as kind hearted as Bill though.
> that's like saying that I still possess all of the money I spent on groceries because I chose to spend it that way... at some point it's not my money anymore.
Yes, but that point comes when you eat the groceries, not when you buy them.
No need to buy anything with it when he still has enough outside of that money. It still gets used to further his initiatives, although no longer personal like one would do with money in their direct control.
