The next round against WalMart family

[spuwho]

The descendants of Sam Walton (founder of WalMart) have been quite adept at sheltering their assets and inherited wealth.  However, their level of charity and philanthropy doesn't come close to what they bring in.

The next round of criticism in the circles of the Walton family is how low prices and low pay feed their largesse, but unlike Gates or Buffett, very little trickles through.

Per Forbes:

Report: Walmart's Billionaire Waltons Give Almost None Of Own Cash To Foundation


The Walton family is America's richest, worth some $140 billion between them and longtime fixtures of the Forbes 400 list thanks to their approximate 50% ownership of Walmart, the world's largest retailer.

Their Walton Family Foundation, established by the late Sam and Helen Walton in 1988, is considered a heavyweight in the world of nonprofits with just under $2 billion in assets.

In 2013 alone, the Foundation invested $325 million across three key areas: education reform, the environment and the family's home region of northwest Arkansas. One of the Foundation's major recipients has been Alice Walton's stunning Crystal Bridges Museum of American Art, funded to the tune of $1.2 billion.

However, almost none of this largesse is the result of donations from the Waltons themselves, according to a report released on Tuesday by Walmart 1 Percent, a project of union-backed Making Change at Walmart.

Says the study, which can be viewed in full here:

    The central finding of this report is simple: Our analysis of 23 years' worth of the Walton Family Foundation's tax returns shows that Rob, Jim, Alice and Christy Walton—the second generation Walmart heirs—have contributed almost none of their personal fortune to the foundation which bears their family name.

    Specifically:

    - Rob and Alice Walton made zero individual contributions to the Foundation during the 23 years we examined;

    - Jim Walton made a single personal contribution of $3 million to the Walton Family Foundation, more than 15 years ago;

    - Rob, Jim, and Alice Walton and the family holding company they control (Walton Enterprises) have been responsible for only .13% of all contributions to the Walton Family Foundation ($6.4 million);

    - Among the second generation Walton heirs, it is the in-law, Christy, who has been responsible for the largest share of contributions to the Foundation;

    - The four Walmart heirs and Walton Enterprises combined have been responsible for only 1.2% of all contributions to the Walton Family Foundation.

    The combined lifetime contributions of the second generation Walmart heirs and their family holding company to the Walton Family Foundation come to $58.49 million, or:

    ■■ About .04% of the Waltons' net worth of $139.9 billion;
    ■■ About .34% of the estimated $17.1 Billion in Walmart dividends that Rob, Jim, Alice and Christy received during the years we analyzed;
    ■■ Less than one week's worth of the Walmart dividends the Waltons will receive this year;
    ■■ Less than the estimated value of Rob Walton's collection of vintage sports cars.

The report goes on to detail how the Foundation has been funded over the years, namely by tax-avoiding trusts established with assets provided by the late Sam, Helen and John Walton or their estates. The study found that 99% of the Foundation's contributions since 2008 have been channeled through 21 Charitable Lead Annuity Trusts. These CLATs, as they're known, are specifically designed to help ultra-wealthy families avoid estate and gift taxes.

While using foundations to thwart the tax man is nothing new for the very rich, Walmart 1 Percent describes the family's philanthropic activities as less a tax dodge and more another "outpost in the vast Walton family business empire":

    "The Walmart heirs have built one of the largest and most powerful private foundations in the country—at almost no cost to themselves. They have done so with the assistance of financial experts who manage the family holding company, Walton Enterprises, and the Walton Family Foundation with a keen eye toward maximizing the family's wealth. In addition, the Waltons are exploiting complex loopholes in the tax code in order to avoid billions of dollars in estate taxes by funding their Foundation with special trusts."

This table below illustrates how the Waltons have "gamed the system," in the words of Walmart 1 Percent:



The report goes on to compare the Walton family's philanthropic activities to both those of other billionaires and the charitable donations of average Americans. Walmart 1 Percent finds the Waltons "far less generous" than other wealthy philanthropists and everyday donors alike.

Whereas Bill Gates and Warren Buffett have given 36.2% and 26.9% of their respective wealth to charitable causes, the Walmart heirs have between them given 0.04% of their fortune, per the report.

Meanwhile, the average middle class earner with a salary of $50,000 to $99,000 contributes 6% of their discretionary income to charity, says the report, basing this figure on data from The Chronicle of Philanthropy.

The team behind the analysis is aware of the limitations of their data, namely that the Waltons may well "make charitable contributions to entities other than the Walton Family Foundation." However, the group "did not find evidence of major, sustained giving by the Waltons to charitable organizations" other than their foundation.

A representative of the Walton Family Foundation reviewed the report and provided the following statement to Forbes:

"Since 1987, the Walton family has contributed more than $5 billion to charitable organizations and causes. Family members living and deceased have provided generously for the foundation. The family has planned for the continued growth of the foundation and intends for grant making to progressively increase over time."

[vicupstate]

Is the point that the Waltons funded it, but only as a means to avoid taxes, or that they did not provide any funding other than 1.2%?

If the family did not contribute to the foundation, then who did?

[spuwho]

The article is highlighting that after Sam Walton died the inheriting kids have not made any significant contributions to the family foundation he set up.

One possible reason is that the foundation holds alot of Walmart stock, therefore it can make those 5 billion in grants because the principal is well maintained. This means the kids don't have to fund it themselves.

Since the foundation lives off the same largesse as the kids they may not feel inclined to make any contributions to it since it does well.

Also the story admits that they are still trying to find other charities or foundations the kids have contributed too. There is some suspicion that because "Dad" took care of it, they aren't motivated to do in kind.

There may be some aspects of the Walton largesse that the kids want to obscure for either tax purposes or to protect other family interests.

It typically isn't the first generation of benefactors that struggle with the large wealth, it's the second generation. The Pritzker Family is a good example where several grandkids rebelled against the wealth machine and had to go to court to seperate themselves.

I won't be surprised if we hear about a lawsuit by a Walton grandchild who wants control over their part.

[fsquid]

I know Nancy and Bill Laurie have donated a good bit to the University of Missouri and Memphis, why are they not listed in this article or did I miss it?

[IrvAdams]

Wow. To have such resources. I wonder what they would want to keep so much of it for? I mean, once you have every dime you could possibly spend in a number of lifetimes, does any more provide any more satisfaction? 

Well, regardless of wealth, I've never heard of anyone turning down another dollar, it's just not human nature I guess.