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NEW: Follow me on a @ProPublica investigation inside the exclusive, tax-deductible world of private nonprofits run by the ultrawealthy
propublica.org/article/how-pr…
NEW: Follow me on a @ProPublica investigation inside the exclusive, tax-deductible world of private nonprofits run by the ultrawealthy
propublica.org/article/how-pr…
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Our first stop is Carolands, a French-style chateau in the Bay Area, built in the 1910s for a Pullman railcar heiress. The last resident, @SFGiants owner Charles B. Johnson, saved $38M on his taxes by donating the house to his own private foundation.
Our first stop is Carolands, a French-style chateau in the Bay Area, built in the 1910s for a Pullman railcar heiress. The last resident, @SFGiants owner Charles B. Johnson, saved $38M on his taxes by donating the house to his own private foundation.
3/ The Carolands Foundation promised the IRS that Johnson’s former mansion would be open to the public.
And today, it is… 2 hours a week, three times a month (most months), to a few dozen lottery winners.
And today, it is… 2 hours a week, three times a month (most months), to a few dozen lottery winners.
4/ Carolands’ attorney said “we believe pretty strongly that the foundation is serving its purpose of preserving and showcasing this historic and unique property to the public.” He emphasized the value of occasional charitable events held at the home for other nonprofits.
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Next, I stopped by the private art museum that real estate magnate Matthew Strauss keeps in the former guesthouse of his sprawling estate outside San Diego. He said that I was the first person he’s shown through in three years.
Next, I stopped by the private art museum that real estate magnate Matthew Strauss keeps in the former guesthouse of his sprawling estate outside San Diego. He said that I was the first person he’s shown through in three years.
6/ Strauss told me he bought the guesthouse in 1999 to keep anyone else from moving in next-door. It was worth $4M when he later donated it to his foundation for a tax write-off.
7/ Strauss said that he’d like to get tours going again, but only when schools and universities stop requiring masks and start treating COVID-19 “like normal.” He eventually plans to donate most of his art (he estimates worth $100s of millions) to public institutions.
8/ Strauss didn’t respond to a list of questions I sent him after our tour.
9/ Venture capitalist couple Sandy and Vinie Zhang Miller had a similar private museum in mind in 2017 when they bought their next-door neighbor’s $3.1M house with tax-exempt foundation money, Vinie Miller told me.
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Vinie Miller told me that their neighbor's house in exclusive Woodside, CA would have made a great location for their foundation’s collection of Chinese art. But they never opened the museum, and she said the foundation hung onto it as an investment, instead.
Vinie Miller told me that their neighbor's house in exclusive Woodside, CA would have made a great location for their foundation’s collection of Chinese art. But they never opened the museum, and she said the foundation hung onto it as an investment, instead.
11/ The Millers did not respond to a list of follow-up questions I sent them for this story.
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Sen. Orrin Hatch investigated private museums after an NYTimes expose in 2015. He expressed concerns about ones that provide little public access, are next to a founder’s home and are controlled by them. But no meaningful changes followed.
nytimes.com/2015/01/11/bus…
Sen. Orrin Hatch investigated private museums after an NYTimes expose in 2015. He expressed concerns about ones that provide little public access, are next to a founder’s home and are controlled by them. But no meaningful changes followed.
nytimes.com/2015/01/11/bus…
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The resource-strapped IRS examines fewer than 255 of the 100,000 private foundation filings every year. The agency asserted that its compliance program “deploys the right resources to address noncompliance issues.”
The resource-strapped IRS examines fewer than 255 of the 100,000 private foundation filings every year. The agency asserted that its compliance program “deploys the right resources to address noncompliance issues.”
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Congress has never passed clear rules governing private foundations; for example, there’s no law saying how often private museums have to be open. But it has passed so-called “self-dealing” rules against insiders using foundation assets.
Congress has never passed clear rules governing private foundations; for example, there’s no law saying how often private museums have to be open. But it has passed so-called “self-dealing” rules against insiders using foundation assets.
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Ken Xie, billionaire CEO of cybersecurity firm @Fortinet, ran afoul of the self-dealing rules in 2017, when his foundation purchased his new girlfriend’s $3M Cupertino home and he stayed there while he was going through a messy divorce.
Ken Xie, billionaire CEO of cybersecurity firm @Fortinet, ran afoul of the self-dealing rules in 2017, when his foundation purchased his new girlfriend’s $3M Cupertino home and he stayed there while he was going through a messy divorce.
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Days after I contacted his lawyer, Xie filed amended tax returns saying the foundation had “discovered a self-dealing event”. His lawyer said the foundation meant to file the returns last November, but failed to do so due to a mix-up between Xie and an accountant.
Days after I contacted his lawyer, Xie filed amended tax returns saying the foundation had “discovered a self-dealing event”. His lawyer said the foundation meant to file the returns last November, but failed to do so due to a mix-up between Xie and an accountant.
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Xie’s foundation is “fully committed to complying with all applicable rules and regulations,” his lawyer said.
Xie’s foundation is “fully committed to complying with all applicable rules and regulations,” his lawyer said.
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