Jeff Bezos, co-founder of Amazon, has stirred up a lot of controversy over the years and is one of the richest men on earth. He previously told CNN reporters that he plans on giving away a majority of his wealth — about $128 billion of it.
His intent is that he will use his money for good, using his wealth to fight climate change and supporting others that are committed to helping others. Among those, he gave $100 million to Dolly Parton’s as part of their Civility and Courage Award for her efforts in helping those in need.
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He has also founded the Bezos Earth Fund, which he committed to distributing $10 billion to help fight climate change. While all these efforts seem noble and will hopefully have a massive impact in the world, does Bezos stand to gain more from simply personal fulfillment when it comes to giving away so much of his wealth?
Yes, his philanthropy can be profitable — and it has to do with both money and his image.
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Tax Advantages
Bezos’ charitable giving efforts may be of a wider strategy in his estate planning. By giving away his money now he may be able to avoid paying more in taxes. Meaning, if he gives away part or all of his wealth now, he may be able to lower the taxable amount of his estate and therefore lowering the amount of taxes.
Even when he’s still alive, he can benefit from his charitable work. Because he’s donating money through foundations he founded, he can receive tax deductions, which may help him avoid gift taxes.
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Plus, if Bezos donates assets that have appreciated long term, like real estate, stocks and bonds, then he may be able to avoid paying capital gains taxes and be able to deduct the fair market value of the asset, according to Fidelity Charitable.
More Control Overall
The truth is that if Bezos donates his money now, he can funnel it towards people and organizations he wants. He could even be strategic in his charitable donations in order to improve his self image or by extension Amazon’s. If the co-founder is seen as a selfless person, it could lead people to think that Amazon also embodies these values.
Aside from public image, he could use charitable donations to build better relationships with influential people, entrepreneurs and even policymakers.
Although he can’t directly create his own federal or state rules and regulations, for example, he can donate to an influential personal’s charitable organization in order to get on their good side. Bezos can indirectly influence policy if he’s able to get close to these people and the opportunity to be picked on committees or be in meeting rooms with these influential folks.
Of course, the public isn’t privy to Bezos’ true motivations when it comes to his charitable giving efforts. But most likely, we’ll all be watching for what else Bezos plans to do with his pledge to donate his wealth and how much he’ll stand to gain from his actions.
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This article originally appeared on GOBankingRates.com: Can Philanthropy Be Profitable? The Business Side of Jeff Bezos’ Donations
