Nvidia Corp.’s CEO Jensen Huang and his wife Lori have seen the value of their philanthropic efforts skyrocket due to the surge in Nvidia shares. Their foundation, the Jen-Hsun & Lori Huang Foundation, holds an estimated $8 billion worth of Nvidia stock that could be used for charitable donations. In addition, a charity managed by Charles Schwab Corp. controls another $4.4 billion in Nvidia stock, some of which may go towards donations for the Huangs’ foundation.
Despite these significant assets, the couple has only donated around $65 million to outside nonprofits and universities since 2007. They have also contributed about $125 million to the GeForce Fund, a donor-advised fund at Schwab Charitable Fund. This strategic approach has enabled them to build one of the largest private foundations in the US.
However, there has been debate about the use of donor-advised funds to obtain immediate tax breaks for charitable donations that can be invested indefinitely. Critics argue that this practice undermines the original intent of charitable giving laws. The Huangs have remained relatively low-key about their foundation’s work, focusing on supporting higher education, public health, and STEM initiatives in the US.
As Nvidia’s stock value continues to rise, the Huangs will need to meet the annual distribution requirement of at least 5% of their foundation’s assets. This rule presents a challenge for smaller grassroots operations like theirs. Despite having minimal operating expenses and no compensation costs, the Huang Foundation may struggle to keep up with the increasing donation requirements.
The Huangs, like many wealthy individuals, have utilized donor-advised funds to meet their foundation’s distribution requirements. Schwab Charitable, where they hold a significant amount of assets, allows for tax-efficient contributions to be made while offering flexibility in managing investments. While donors technically give up ownership and control of assets placed in a DAF, they still retain some influence over the investment decisions.
This blurred line between ownership and control has raised questions about the effectiveness and transparency of donor-advised funds. Critics argue that donors may benefit more from holding onto appreciated securities rather than immediately donating them. As the debate surrounding philanthropic practices continues, the Huangs and other high-net-worth individuals are being scrutinized for their charitable giving strategies.
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https://finance.yahoo.com/news/nvidia-ceo-huang-billions-foundation-140002046.html
