A revealing new report suggests that the foundation operated by the children of Walmart founder Sam Walton is actually being used as a vehicle for the nation’s richest family to skirt billions of dollars in estate taxes.
Walmart 1 Percent, a project of Making Change At Walmart, examined 23 years of tax returns from the Walton Family Foundation, which holds itself out as being interested in improving K-12 education, conservation and improving the quality of life in northwest Arkansas. An analysis of 23 years of foundation tax returns revealed that Sam Walton’s heirs only gave only 0.04 percent of their combined net worth to their own foundation–not even a fraction of what other wealthy Americans give to charity.
Read the full report here or the executive summary here. Some of the highlights:
- Walmart chairman Rob Walton, Sam and Helen’s oldest child, has not given a single penny to his family’s own foundation. Depending on the source, he is either the 11th richest person in the world (per Bloomberg) or the 14th richest (per Forbes), and either the eighth or ninth richest American.
- The Waltons’ only daughter, Alice, has never given any money to the foundation either. She is second richest woman in the nation (behind only her sister-in-law, Christy).
- The Waltons’ youngest child, Jim, has only given $3 million to the foundation–and that came from a personal contribution made in 1998. He is either the 10th (per Bloomberg) or 12th (per Forbes) richest person in the world, and either the seventh or eighth richest American.
- Walton Enterprises, the family-controlled holding company that is Walmart’s largest shareholder, has given a grand total of $3 million to the foundation–barely a tenth of the dividend it pays to the Waltons each year.
All told, the Walton heirs and Walton Enterprises have given only $58.5 million to the Walton Family Foundation. Over 89 percent of that total came from Christy and John Walton. The study could find no evidence of sustained giving to any other charitable organizations. By comparison, Bill Gates gives over 36 percent of his net worth to charity, and Warren Buffett gives almost 27 percent of his net worth. Both men have publicly promised to donate the majority of their wealth. This looks even more obscene when you compare the Waltons to two other entrepreneurs who showed little regard for their workers, John Rockefeller and Andrew Carnegie. Between them, their charitable donations added up to more than 2,000 times those of the Waltons (in 2007 dollars).
But wait a minute! The Walton Family Foundation has over $2 billion in the bank, and has spent $3.5 billion on the causes it supports. So where does that money come from? According to the report, over 60 percent of the contributions come from 21 trusts set up by Helen Walton, her estate and John Walton’s estate. These trusts, called charitable lead annuity trusts, take advantage of a loophole in the tax code. A portion of the income earned by these trusts, which were worth $8.8 billion in 2012, must go to the Walton Family Foundation for the life of the trusts. When the trusts expire, their beneficiaries–usually the donors’ heirs–receive any underlying assets plus leftover income from the trusts tax-free. By at least one estimate, this will allow Sam’s children and grandchildren to save $3 billion in estate taxes.
To be fair, this tax dodge has been used by several billionaires, which led former Treasury Secretary Larry Summers to cite it as proof that “our estate tax system is broken.” However, given that the Waltons sit on a family fortune worth over $139.9 billion–more than either they or their kids will ever spend–their use of this tactic is particularly obscene.
Even the most severe critics of the Waltons have usually given them the benefit of the doubt on their charitable giving. But this study proves that the Waltons are using the Walton Family Foundation as the ultimate case of nouveau riche excess. Looking at this, it should no longer come as a shock that Walmart essentially forces taxpayers to subsidize a large chunk of its expenses, since its workers are locked into wages so low they have to rely on food stamps and Medicaid. After all, they seem to be falling all over themselves to hold onto every penny of their money when it would take the equivalent of a drop in the bucket to treat their workers better–or to be real philanthropists.
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Darrell Lucus is a radical-lefty Jesus-lover who has been blogging for change for a decade. Follow him on Twitter @DarrellLucus or connect with him on Facebook.
