The public reaction was swift and angry. Critics were quick to point out the irony of a tech billionaire whose company is pouring billions into artificial intelligence now channeling most of his charitable efforts into AI-enabled biological research, particularly research that could extend human lifespan. As Zuckerberg himself mused when asked directly, “Do you think you will live forever, Mark?” his answer was telling: “That is an interesting question.” People can, of course, spend their money however they like. That argument has always been the bedrock defense of philanthropy. But the backlash was not really about taste or personal ambition. It was about consequences. When charitable giving is structured the way it is today, those consequences ripple far beyond the donor’s personal vision.
The most immediate and tangible illustration of this problem came when a school that had relied almost entirely on Chan Zuckerberg Initiative funding was forced to shut down overnight. Four hundred underprivileged students were displaced, and the official explanation cited “a lack of funding,” without acknowledging the uncomfortable truth that the funder itself had simply changed its mind. This was not a failure of the school, nor of the students, nor of community demand. It was a failure baked into a system where essential social services are allowed to depend on the discretionary preferences of a handful of ultra-wealthy individuals. What made the situation even more bitter was the realization that much of this funding was indirectly public money anyway, not through government appropriations, but through foregone tax revenue.
That detail is crucial. Tax deductions are often framed as benign incentives, but in practice they function as public subsidies. When a billionaire receives a deduction for a donation, the government is effectively agreeing to forgo revenue that could have been allocated through democratic processes. If a school for underprivileged children in Palo Alto was truly necessary, it could have been publicly funded by redirecting even a fraction of the tax concessions granted to massive private foundations. Instead, it was left vulnerable to the shifting interests of its benefactors. This is not an isolated case. It is a structural feature of modern philanthropy.
To understand how we arrived here, it helps to look at the broader data. According to aggregated figures from Giving USA, total charitable contributions to registered nonprofits reached approximately $593 billion in 2024. While complete data for 2025 is still emerging, the trend is unmistakably upward. On the surface, this appears to be a success story. More money flowing into charitable causes suggests a healthier civic culture and a society where people feel financially secure enough to give. And to be fair, there are genuine positives. Charitable organizations often step in where governments fall short, addressing urgent needs and experimenting with innovative solutions.
The problem begins when you examine who is doing the giving. Adjusted for inflation, in 1993 households earning under $200,000 per year accounted for roughly 77 percent of all charitable donations in the United States. Households earning over $1 million contributed about 10 percent. By 2019, those proportions had flipped dramatically. Contributions from average households fell to just 33 percent, while donations from million-plus earners more than quadrupled. Charitable giving has become even more concentrated than wealth itself. This means that nonprofits are increasingly dependent on a very small donor class, and by extension, on that class’s priorities, ideologies, and long-term whims.
Most large donations today flow into foundations that the donors themselves control. These entities decide not only where money goes, but also when it stops. Zuckerberg’s initiative made this painfully clear, but it is far from the most extreme example. In fact, Zuckerberg’s structure is comparatively restrained. The Chan Zuckerberg Initiative is not a traditional foundation at all, but a limited liability company. This design offers fewer immediate tax benefits than a conventional foundation, but it provides enormous flexibility. The founders retain control over donated shares, face fewer disclosure requirements, can invest and earn returns, and are even allowed to make direct political donations. While the organization has been relatively transparent compared to what the law requires, it also serves as a blueprint for less visible billionaires who may prefer to operate entirely out of public view.
Despite this flexibility, the tax advantages do not disappear. They are simply delayed or restructured. The result is a system where immense private influence can be exercised over public priorities with minimal accountability. When people ask whether it might simply be easier and cheaper to “pay the damn taxes,” they are not being flippant. They are pointing to a fundamental inefficiency and unfairness in the current arrangement.
Zuckerberg, however, is still not the worst offender in this ecosystem. Across the philanthropic landscape, there is a growing pattern of what might best be described as quasi-venture charity. Tech billionaire Michael Dell and his wife Susan announced donations exceeding $6 billion aimed at improving outcomes for millions of children. The Walton family has pledged tens of millions to organizations like Teach for America. Eric Schmidt and his wife Wendy have funded multiple large-scale telescope projects under the banner of the Schmidt Observatory System. Each of these initiatives sounds laudable in isolation, and in many cases, they do produce real benefits. But they also shape research agendas, education policy debates, and public discourse in ways that would be deeply controversial if they were funded directly through government budgets.
Consider education. The Waltons have supported school funding initiatives for nearly a decade, but their money has also been used to influence policy debates around charter schools versus traditional public education. Similarly, ideological think tanks across the political spectrum, from the Heritage Foundation to the Brookings Institution and the Center for American Progress, receive millions each year in tax-deductible donations. These organizations help craft policy proposals, influence legislation, and shape public opinion. Again, the issue is not that these ideas exist, but that public money, in the form of tax subsidies, is being used to amplify the voices of those who already wield disproportionate power.
Even when the agenda is not overtly political, the benefits of elite philanthropy are often skewed toward elite consumption. Walk through major concert halls, museums, or university campuses and you will see family names etched into walls and buildings. Ballet theaters, curated art galleries, and endowments for prestigious institutions flourish, while more urgent needs, such as affordable healthcare and basic social services, remain underfunded. Harvard University’s endowment, which has grown to around $57 billion, is a frequently cited example. Donations to the endowment are tax-deductible, yet the institution already has more than enough resources to fund scholarships and infrastructure without additional public subsidy. The question is not whether art, culture, or elite education have value. It is whether taxpayers should be implicitly funding them at the expense of more immediate public needs.
This tension becomes even sharper when philanthropy intersects with emerging technology. Zuckerberg’s pivot toward AI-powered health research is a case in point. Advanced medical technologies that aim to extend human lifespan are fascinating, and they may eventually produce breakthroughs that benefit society as a whole. But right now, many of the most impactful health outcomes could be achieved by simply funding basic healthcare access for people who cannot afford it. The marginal public benefit of speculative longevity research must be weighed against the guaranteed benefit of universal care. When charitable donations displace tax revenue, that tradeoff becomes unavoidable.
The art world offers perhaps the clearest illustration of how charitable giving can be manipulated. Art valuation is notoriously subjective, and that subjectivity creates opportunities for abuse. A donor can purchase a piece of art for a relatively small sum, support galleries and exhibitions that increase its perceived value, and then donate the artwork to a foundation at an inflated appraisal. The result is a massive tax deduction that bears little resemblance to the donor’s actual economic sacrifice. While this practice is technically regulated, enforcement is inconsistent, and the incentives remain firmly in place.
For many observers, the most troubling example of quasi-venture charity is OpenAI. When it was founded, OpenAI was explicitly framed as a nonprofit organization dedicated to advancing artificial intelligence for the benefit of humanity. Early donations were tax-deductible, and the organization positioned itself as a counterweight to profit-driven AI development. Today, OpenAI exists as a complex hybrid structure, with a nonprofit entity holding a minority stake in a for-profit subsidiary that is preparing for a potential public offering. The organization’s leadership now speaks openly about shareholder value and market dominance.
In a widely circulated exchange, OpenAI’s CEO responded to criticism about the company’s massive spending commitments by saying, “First of all, we’re doing well more revenue than that. Second of all, if you want to sell your shares, I’ll find you a buyer.” He added that many of those expressing concern would be “thrilled to buy shares.” The shift in tone was unmistakable. What began as a philanthropic research effort has evolved into one of the most commercially significant AI companies in the world.
This evolution reveals a powerful incentive structure. If philanthropic funding leads to a breakthrough technology, that technology can be spun off, licensed, or otherwise transferred into a for-profit entity. If the research fails, donors still benefit from tax deductions and reputational gains. If it succeeds, the financial upside can dwarf any lost tax benefit. This asymmetry effectively turns charitable giving into a low-risk, high-reward form of venture capital.
Technically, tax law prohibits donors from receiving tangible benefits from charitable contributions. In practice, there are ways around these restrictions. Intellectual property can be licensed rather than sold. Talent can be hired away from nonprofits into affiliated companies. Analysts have begun referring to this practice as “halo acquisitions,” where companies avoid direct purchases that might trigger regulatory scrutiny by instead hiring staff and licensing technology. In the nonprofit context, the same approach allows valuable research to migrate into the private sector with minimal oversight.
Regulators are supposed to intervene when these arrangements cross legal or ethical lines. But enforcement has lagged far behind innovation. The complexity of modern corporate structures, combined with the political influence of major donors, makes meaningful oversight difficult. As a result, philanthropic entities increasingly operate in a gray zone between public good and private gain.
None of this is to say that all philanthropy is harmful or insincere. Many charitable organizations do extraordinary work under challenging circumstances. Countless lives are improved by donations large and small. The problem is not generosity itself, but the concentration of power that accompanies it. When a small group of individuals can decide which social problems are worth addressing, which scientific fields deserve funding, and which policy debates receive oxygen, democratic accountability erodes.
There is a growing recognition that the current system may be unsustainable. As charitable giving continues to rise, so does skepticism about its role in public life. People are beginning to ask whether it would be more efficient, equitable, and transparent to simply tax extreme wealth more effectively and allocate resources through democratic institutions. That approach is not without its own challenges, but it would at least ensure that essential services are not subject to the personal interests of a few.
The irony is that many of the world’s wealthiest donors genuinely believe they are doing good. They see inefficiency in government, urgency in technological progress, and opportunity in private initiative. In some cases, they are right. But good intentions do not negate systemic consequences. A world where schools can close overnight, research agendas can shift on a whim, and public priorities are shaped by private fortunes is not a stable or equitable one.
If the AI investment bubble has taught us anything, it is that unchecked enthusiasm, combined with enormous capital, can distort markets and expectations. Modern philanthropy is beginning to show the same symptoms. Until society grapples with the underlying incentives and power dynamics, charitable giving will continue to function less as a supplement to democracy and more as a substitute for it. And that is a tradeoff worth examining very carefully.
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