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You have achieved everything in life. But are you still satisfied with
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Philanthropy will increase strongly in the coming years. For some years now, and also since the Covid-19 pandemic, the number of ultra-high net worth individuals, i.e. people with investable assets of 30 million US dollars or more, has grown strongly. Especially in North America, a „philanthropic culture“ has emerged among wealthy people.
Philanthropy
A philanthropic organization is a non-profit organization that is not an organization of a government. Ideally, this organization is also not political. Typically, community foundations, endowments and charitable trusts or wealthy individuals raise donated assets and income to provide socially beneficial services.
Charitable organizations and assessment
If these charitable organizations are officially recognized, donations to philanthropic organizations are tax deductible. As a rule, the organizations themselves do not pay income tax. If one sets up such a philanthropic organization, one should consult an expert to ensure that this organization also serves the right purpose and receives the right assessment, which are common for non-profit organizations.
Fundraising
Fundraising means advising and actively supporting non-profit organizations and philanthropists in the systematic analysis, planning, implementation, and control of all activities.
Good fundraisers are experienced and know how fundraising works and how it does not work. The specialists always advise within the bounds of what is feasible. Of course, with an appropriate positive attitude towards the subject. Experts also make use of external partners if the expertise is lacking in order to offer a seamless and comprehensive service.
Origin and background of philanthropy
Philanthropic charities date back to ancient times. One of the first laws defining charities was the Statute of Charitable Uses, passed by the English Parliament in 1601.
Types
Most philanthropic organizations are organized and operated for specific purposes. Specified purposes include charity, religion, science, public safety testing, literature, education, prevention of cruelty to animals, and the promotion of national or international amateur sports competitions. Examples of qualified organizations are churches, non-profit hospitals and other charities, alumni associations, Red Cross and Salvation Army associations, and Boys and Girls Clubs. Of course, the list can be extended.
How do charities fund themselves?
Although fundraising and receiving donations are important for philanthropic organizations, donations account for about 10 per cent of charities‘ income. Fees for services, product sales, interest and investment income make up the bulk of revenue, followed by government grants. However, contributions of shares from private assets, are also possible as a source of funding for foundations.
Requirements for foundations
In addition to restrictions on the types of purposes a private foundation may pursue, these organizations are also subject to certain tax requirements for private foundations. Foundations are also subject to rules and regulations regarding self-dealing between the organization and major donors, restrictions on the ownership of private investments and the obligation to distribute income annually for charitable purposes. The regulations also require that investments must not jeopardies the fulfilment of the exempt purposes and that expenditures must further the exempt purposes.
In Germany, non-profit status is regulated by the German Fiscal Code (§52) and carries advantages for the organization such as tax benefits and the possibility to issue donation receipts to donors for receiving donations. The amount of the donation certificate can be claimed by the donor as a relief in the tax return.
In order to be able to make optimal use of the benefits of non-profit status, the non-profit activity must be recognized as such. Recognition is granted upon application to the local tax office. To be able to make this application, the organization must already exist. Accordingly, an association must have a statute with a clearly visible non-profit purpose, a resolution passed by the general meeting and an entry in the register of associations.
Who are the generous donors?
Many philanthropists come from the IT and financial sector. They donate large sums of money for the common good and have sometimes also made a promise to spend their entire fortune on charitable purposes or progress that serves humanity until their death.
Melinda and Bill Gates Foundation
Melinda and Bill Gates committed themselves to philanthropy at an early age. The Melinda and Bill Gates Foundation focuses on health care and education, especially in Asia and Africa. In addition, Bill Gates also supports technological companies, such as a company that specializes in robots that can perform operations with precision. Bill Gates‘ fortune has accumulated to about 80 billion US dollars. According to press reports. Bill Gates wants to donate 95% of it until his death.
Warren Buffet and Berkshire Hathaway
Warren Buffet, who has also become a good friend of Bill Gates, founded the investment firm Berkshire Hathaway many years ago. Warren Buffet is considered the world’s most successful major investor. Over the decades, his investments made him a cult and a guru in the financial industry.
His fortune is estimated at just under 73 billion dollars. Warren Buffet has already donated over 20 billion dollars. Together with Gates, he founded the initiative The Giving Pledge, which calls on the world’s billionaires to donate 50 per cent of their wealth at the latest upon their death. Like Zuckerberg, Buffet wants to give 99 per cent of his wealth to charitable projects and to promote progress for humanity.
Azim Premji
Azim Premji is an Indian entrepreneur. He is India’s fourth richest billionaire after Lakshmi Mittal, Mukesh Ambani and Anil Ambani. He took over a vegetable oil
vegetable oil company from his father. Under his leadership, his company Wipro expanded into the software business and is now the world’s largest independent research and development provider and India’s largest outsourcing company.
Azim Premji’s fortune is estimated at around 19.1 billion US dollars. By now, however, it is likely to have increased. His charitable foundation, the Azim Premji Foundation, aims to promote and improve school education in India. In 2013, he spent a quarter of his fortune on charity. The Azim Premji Foundation supports a programme that reaches more than 2.5 million children.
Charles Francis
Charles Francis „Chuck“ Feeney is a US entrepreneur and philanthropist. Charles Freeney comes from a retail background and co-founded DFS Group. A duty-free shop company. Through The Atlantic Philanthropies, a foundation he funded, he donated over $8 billion to educational institutions and charitable causes between 1982 and 2020. He is an advocate for education, science, healthcare, and human rights worldwide.
Gorden Moore
Gorden Moore is a legend in the IT sector. He was a co-founder of the Intel chip company. Through the Gordon and Betty Moore Foundation, Betty Moore is his wife, 5 billion US dollars have already been donated. The Foundation is committed to promoting environmental protection and science.
Carlos Slim Helú
Carlos Slim Helú first made a large fortune in real estate. Before his companies Telemax and Grupo Carso took him to the top of the richest people on the Forbes list. Carlos Slim Helú is known as a billionaire in the telecommunications industry. His fortune is estimated at over 81 billion US dollars. Through his foundation, the Carlos Slim Foundation, he supports, for example, the project, One Laptop per Child. The revitalization of the old city – Mexico City. The foundation is said to have donated a total of 4 billion US dollars.
Eli Broad
Eli Broad built his wealth through real estate and insurance. Eli Board passed away in April 2021, Broad was considered a philanthropist and was known for his art collection of nearly 2000 works of modern and contemporary art. He founded the Broad Art Foundation and endowed the Broad Contemporary Art Museum and The Broad art museum, which opened in 2015. He was a member of the American Academy of Arts and Sciences from 2001.
With his foundations, however, he is one of the top ten philanthropists worldwide. The art lover and collector is said to have donated over three billion dollars.
Chan Zuckerberg Initiative
The charity „The Chan Zuckerberg Initiative (CZI)“, is an organization owned by Mark and Priscilla Zuckerberg. The organization is said to be worth $80 billion. The charity is not a trust or foundation that is tax exempt, but a normal business that pays tax. Therefore, the initiative is seen as an example of philanthrocapitalism, which combines capitalism with the achievement of social and societal goals.
The initiative was founded in 2015. The couple aims to spend 99 per cent of their wealth through this initiative during their lifetime. The main areas of the Chan Zuckerberg Initiative include science and research, education, and social justice and inclusion. Which is why, in addition to carrying out projects, the organization also engages in political lobbying to achieve, for example, reform of the US judicial system and immigration law.
Sir Richard Branson
The billionaire is a well-known entrepreneur and the first person to fly into space in his own spaceship. The Briton, however, is also a very big philanthropist who wants to spend half of his fortune, estimated at around 5.9 billion dollars, on charitable projects. He is currently underwriting around 28 projects.
In addition, he has set up a foundation, Virgin Unite. Through this foundation, he campaigns for issues that play a role in leadership. The aim of Virgin Unite is to unite people and take an entrepreneurial approach to tackling social and environmental challenges affecting the world. The organization’s work focuses on four key areas. Transforming business into a driver of social benefit, tackling climate change and protecting the environment,
helping entrepreneurs grow and protecting human rights and freedoms.
The billionaire donor is campaigning for LGBTQ+ rights, drug policy reform, giving ex-offenders a second chance, climate change issues and against the death penalty. Another big issue the billionaire is campaigning for is keeping the oceans clean.
Together with his organization, Virgin Unite, Sir Richard Branson, with Peter Gabriel and Nelson Mandela, has founded a group of global leaders, The Elders, who work together for peace and human rights.
Leonardo DiCaprio
The famous and award-winning actor, Leonardo DiCaprio, is not only active and brilliant in front of the camera, he is also an active advocate for environmental protection behind the camera. Already at the age of 24, the Hollywood star became a philanthropist who protects the earth. The deciding factor was a conversation with Al Gore.
At the age of 24, he founded the Leonardo DiCaprio Foundation, which now deals with 4 thematic groups. Animal rights (WWF, Wild aid, Save the Elephants), sustainable development (Stop Global Warming, Global Green, Green Cross International), film promotion (Cinema for Peace, Motion Picture and Television Fund Foundation) and children’s health (SOS Children’s Villages, Pediatric Epilepsy Project).
Founded in 1998, the LDF has made it its mission to protect the world’s last wild places. Thanks to this foundation, Leonardo DiCaprio was able to donate 59 million US dollars. The LDF supports about 65 organizations and more than 70 projects.
MacKenzie Scott
American businesswoman and author helped build the world’s largest company, Amazon, with her ex-husband Jeff Bezos. This made her the 2nd richest woman after Françoise Bettencourt-Meyers. The cut-off date for this statement was 30 June 2020.
MacKenzie Scott’s net worth was $60 billion as of July 2020.
In February 2021, she announced her intention to donate at least half of her current wealth, preferably to smaller charitable organizations.
Hasso Plattner
One of the biggest benefactors from Germany is SAP co-founder Hasso Plattner. The „Hasso Plattner Foundation„, which he endowed, financed the reconstruction of Potsdam’s Palais Barberini with the Museum Barberini, which opened in 2017. Plattner is an honorary citizen of Potsdam and holder of the Federal Cross of Merit. The patron focuses primarily on promoting science and research. The Hasso Plattner Institute for Software Systems Engineering at the University of Potsdam, which he founded, is backed by donations, and pledges he has already made to the tune of around 200 million euros. In addition, there are numerous other commitments.
The Dietmar Hopp Foundation GmbH
Another co-founder of SAP, Dietmar Hopp, is also one of the biggest philanthropists in Germany and Europe. The foundation’s assets consist of SAP shares that Dietmar Hopp contributed from his private holdings. Since its establishment, the foundation, which is one of the largest private foundations in Europe, has distributed around 800 million euros (as of December 2019).
The focus of its activities is on the Rhine-Neckar metropolitan region in Germany. The foundation supports projects in the four areas of medicine, education, social affairs, sports, and climate protection. The promotion of youth sports plays a central role.
Of course, the list of major donors could go on indefinitely. This is only a small excerpt. We are happy to add to the list, please let us have some input.
You might also be interested in Philanthropy – contact Family Office Service.
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