Charitable Space Invaders
David Simmonds

Maybe they all grew up watching the dashing, pompous and utterly incompetent Link Hogthrob, captain the Swinetrek segments on the old television series The Muppet Show. This is because there’s a confluence of the energies of Jeff Bezos, Richard Branson and Elon Musk around space travel.

The race to space by billionaires.

Jeff Bezos announced that he will enter orbit on his Blue Origin spacecraft on 20 July 20 of this year.  Having just shed his mantle as the CEO of Amazon, he is free to indulge his space travel fantasies.  He is taking along with him his brother, 82-year-old female former trainee astronaut Wally Funk and the winner of a charity auction, who won with a bid of $28 million. No word on what his insurance coverage is.  Come to think of it, he could probably scrape by without insurance.

Bezos wants to be on first privately owned aircraft into outer space.  Not to be outdone and because boys-will-be-boys with their toys. Richard Branson launches on 11 July in his Virgin Galactica, nine days before Bezos. Standing in line to take trips are about six hundred people who have made deposits at over $200,000 a pop.

In the meantime, Elon Musk has committed his SpaceX enterprise to putting a million people on Mars by 2050. He’s been sending spacecraft to the International Space Station and the moon as well as launching satellites hither and yon to bring internet coverage to the whole world. Is competition for commercial space travel good?

Some may agree with the enthusiasm of Bezos, Branson and Musk.  Many others do not.  Are we entitled to knock these tech billionaires for spending too much money on their pet projects?

In their defence, each came by his fortune honestly. Supposedly, they pay taxes. More important, perhaps, a goodly chunk of their money is circulating around in the economy rather than sitting and rotting in a vault.  

More pointedly, should they be entitled to indulge their fantasies because they are philanthropists? 

That they are philanthropists is beyond doubt. Branson and Musk have signed the Giving Pledge, a pledge by billionaires to give away at least half of their estates to charity on or before their deaths.  Initiated ten years ago by Warren Buffet and Bill and Melinda Gates, when the latter two were still an item, the pledgor list includes Michael Bloomberg, Charles Bronfman, and Mark Zuckerberg.  Bloomberg already gives roughly one hundred million dollars a year to charity.

One prominent name not signed on the Giving Pledge.

Bezos, even though he is not a Giving Pledgor, has given $2 billion to a charitable fund to fight homelessness and support early childhood education. He pledged $10 billion to address climate change and gave his former wife $38 billion as a divorce settlement. She has given $4.2 billion already to charity. 

Should all three of our space heroes get a free pass to self-indulgence?  Not necessarily, say the authors of Gilded Giving 2020, a report by the US based Institute for Policy Studies.  They cite several problems.

First, the wealth of billionaires is increasing faster than they can give it away. In the US, it nearly doubled from 2010 to 2020.  Giving money away thoughtfully requires hard work and takes time.

Second, much of the money is warehoused, given to charitable foundations that exist in perpetuity and that distribute only their net income to on-the-ground charities. The authors argue there should be higher minimum distribution thresholds. Something our finance minister is also looking into here in Canada.

Third, donors exercise too much control over their money after it has been set aside for charity by giving it to family-controlled foundations or funds where the donor has the ongoing authority to decide which charities receive grants.

Fourth, charitable giving has become top heavy as smaller and medium sized donors are marginalized, which is undemocratic, because it means social priorities are effectively being set by the wealthy and not by elected governments.

Fifth, donations are smaller than they appear. There is a de facto subsidy to billionaire donors in foregone tax revenue of around 75 per cent of the face value of their donations.

No free pass for the self-indulgent

The answer to my question is, no, these billionaire space adventurers shouldn’t get a free self-indulgence pass just because they are also philanthropists.   Maybe the solution is to give people the same tax breaks for paying their taxes as they would for making charitable gifts.  Or by taxing trips into the stratosphere at stratospheric levels Link Hogthrob would approve.