(Bloomberg) -- Elon Musk is not only the world’s richest person, he lays claim to the biggest net worth ever recorded: $208 billion as of Friday. What he does with it will be closely watched.
Judging by Twitter, the Tesla Inc. co-founder’s preferred medium of communication, philanthropy is on his mind. One of his first reactions on becoming the wealthiest human -- after an initial shrug -- was to solicit advice on how to give it away.
Musk, 49, is a philanthropy neophyte compared with those he just leapfrogged on the Bloomberg Billionaires Index of the world’s 500 wealthiest people.
Longtime No. 1 Bill Gates and his friend Warren Buffett, co-founders of the Giving Pledge initiative that urges the ultra-wealthy to donate at least half their fortunes, have each given away tens of billions in cash and stock. Even Jeff Bezos, who has been criticized for being slow to establish himself as a philanthropist, has stepped up his game. He pledged to give $10 billion to issues related to climate change last year and handed out $791 million to 16 environmental groups in November.
Despite signing the Giving Pledge, Musk has done relatively little publicly in the way of charity. He’s donated more than $257 million to the Musk Foundation -- equivalent to .001% of his current net worth -- which in turn distributed $65 million between 2016 and 2018 to about 200 nonprofits, according to an analysis by Quartz.
Had Gates not donated so much -- or Bezos not gotten divorced -- then their fortunes would be much bigger, possibly greater than Musk’s.
Yet Musk has indicated that the reason he’s accumulating wealth is to give it away, or at least redirect it to his passion projects, namely, space exploration. “It’s going to take a lot of resources to build a city on Mars,” he told German publisher Axel Springer last month. “I want to be able to contribute as much as possible.”
“It’s impossible to overstate the potential his fortune could have,” said Benjamin Soskis, senior research associate at the Urban Institute’s Center on Nonprofits and Philanthropy. “We’re dealing with a scale which is difficult to fathom.”
The surge in Musk’s wealth means he’ll need to greatly increase the pace of donations to have any shot at fulfilling his pledge to give more than half away, Soskis said. “He needs to be much more aggressive than he’s being now.”
The question from philanthropy experts is how Musk will go about doing so. The world’s richest people have taken a variety of approaches: Gates has become both a full-time philanthropist and public figure in areas like public health. Twitter Inc. co-founder Jack Dorsey has made his giving transparent by posting each donation to a publicly available spreadsheet.
By turning to Twitter to get suggestions for donations, Musk is following in the footsteps of Bezos, who sent out a similar tweet requesting ideas from his followers in 2017. MacKenzie Scott, Bezos’ ex-wife, has pioneered another model for billionaire giving: approaching hundreds of nonprofits and educational institutions and handing over big checks with no strings attached. Her gifts in 2020 totaled nearly $6 billion.
Brian Mittendorf, an Ohio State University professor who studies nonprofits, suggested Musk follow Scott’s lead and restrain his instincts to innovate.
“A trap that many wealthy philanthropists fall into is a desire to reinvent philanthropy on their own, rather than rely on those who already have expertise and experience but simply need the funds in order to expand their impact,” he said.