(Article by Tyler Durden republished from ZeroHedge.com)
In an attempt to appear "transparent", Dorsey issued a few tweets explaining why he structured this new organization dedicated to seeing these efforts (the so-called "Start Small" initiative) as a "Donor-Advised Fund" or DAF.
https://twitter.com/jack/status/1247616214769086465
https://twitter.com/jack/status/1247616217512198145
https://twitter.com/jack/status/1247616216887255042
However, one thing he neglected to explain, or even mention, was how this decision would allow Dorsey maximum tax benefi.
As it turns out, Recode published a lengthy investigation into these "DAFS" last year. The rise of these "DAFs" in the philanthropy world, particularly within Silicon Valley, has raised questions about their founders' motives. As the story points out, not only is there an instant tax benefit, but the fund is under zero pressure to spend that money. Legally, Dorsey could simply leave it alone, then claim it as an asset for his children.
Our point here is: He's benefiting from a massive tax windfall before he even contributes anything to a noble cause. Then afterwards, he'd be free to do little or nothing with the money. Though the funds can't be returned to Dorsey, and they must be spent on the fund's intended purpose, many have pointed out that the structure lends itself to tax abuse.
One Silicon Valley VC said as much on twitter, and was soundly bashed for making Dorsey "look bad" by raising a legitimate point.
https://twitter.com/wolfejosh/status/1247668042202599425
https://twitter.com/wolfejosh/status/1247751755049218049
https://twitter.com/wolfejosh/status/1247752094469128193
In response to one of his interlocutors, Wolfe clarified that the tax benefits accrued to Dorsey can be used the same year the fund is established, meaning before the money is actually spent on anything charitable.
https://twitter.com/wolfejosh/status/1247749557011668992
Few probably remember this, but Dorsey pledged to give away a huge chunk of his Square wealth years ago, but that never materialized.
Like everything else he does, this definitely deserves scrutiny.
https://twitter.com/owenthomas/status/1247875192698720257
Read more at: ZeroHedge.com