Larry Page’s philanthropic foundation has quietly grown into one of the largest charitable organizations in the U.S. in recent years, with a reported $6.7 billion in assets as of 2021.
But hardly any of the Google (GOOGL) co-founder’s grants go directly to charity, according to the foundation’s tax filings. Instead, the vast majority of its charitable contributions are given to donor-advised funds, which are administered by community foundations and charitable arms of firms.
While donor-advised funds have grown in popularity due to their flexible transparency requirements and the fact that funds don’t have to be immediately disbursed, some experts claim they are used by the wealthy to earn tax benefits while delaying charitable donations.
“It’s not surprising Page would be putting his money in a donor-advised fund, nor is it surprising he would be criticized for doing so,” Leslie Lenkowsky, a professor of philanthropic studies at Indiana University, told Observer.
Page is currently the world’s eighth wealthiest person with an estimated net worth of $109 billion. The former CEO of Google and Alphabet (GOOGL) established the Carl Victor Memorial Foundation, named for his late father, in 2004. While it had around $7.5 million in assets as of the following year, this number has since skyrocketed.
The foundation’s endowment has nearly doubled in the past few years, from $3.6 million in 2019 and $4.5 million in 2020 to $6.7 billion as of 2021, the most recent year for which tax filings are available, as first reported by Inside Philanthropy. Its growth in assets can be largely attributed to the rising value of Alphabet shares, which made up around $3.5 million of the foundation’s most recently reported endowment.
Where is the foundation’s money going?
While the Carl Victor Memorial Foundation distributed $218 million in 2021, the majority of this funding consisted of a $196 million grant to a donor-advised fund at the National Philanthropic Trust, with the remaining money going toward operating and administrative expenses.
Since 2015, the foundation has donated $197,000 to the public charity New Venture Fund, in addition to $303,000 given to the Regents of the University of California for a study on school-based vaccine delivery and $162,000 toward a Bay Area flu study at Oakland Unified School District. It also typically distributes $1,000 to the American Cancer Society each year and has long funded the Shoo the Flu program as a direct charitable activity.
However, of the $836 million in charitable disbursements made by the foundation between 2015 and 2021, roughly 99 percent has gone to donor-advised funds operated by the National Philanthropic Trust, Schwab Charitable and Vanguard Charitable.
Where the money in these donor-advised funds goes next will likely remain hidden from the public and spent at the advice of Page’s foundation, according to Ray Madoff, a law professor at Boston College. Donors receive “effective control over their money” while retaining tax benefits and privacy, she told Observer.
A private foundation could even feasibly direct money from its donor-advised fund to create a new public charity, which would subsequently have no ties to the original source of its funding, said Madoff.
The ACE Act, a bill currently pending in Congress, is looking to address some of these criticisms. It proposes regulations around donor-advised funds, such as limiting donor control and adding time limits on when distributions are eventually given to charities.
However, the grantmaking abilities of donor-advised funds shouldn’t be underestimated, said Lenkowsky, the Indiana University professor. An estimated $43.7 billion of the $234 billion sitting in donor-advised funds were given to charities in 2021, a 28 percent increase from the year prior, according to a study from the National Philanthropic Trust.
“It looks like they’re not just warehouses for people to hold onto money, but they make a lot of grants,” he said.
