Why is it that the ultra-wealthy (especially women) often donate massive amounts of money (if not nearly all) post-divorce? We’ve seen this result from several high-profile divorces, such as those of Mackenzie Scott, Melinda French Gates, and Sue Ann Arnall, who have each pledged to give the majority of their wealth to charitable causes in their lifetimes.
Post-divorce philanthropy can stem from a strong desire to give back to the community, especially of the money earned during the marriage. It may also stem from the financially sophisticated to reap a few tax benefits.
Research shows that women may be more likely to give to charity than men, but not always
One possible reason the ex-wives of billionaires are giving away large amounts of money is that women often give more to charity than men. Research backs this up. According to the IU Lilly Family School of Philanthropy research, single women are generally more likely than single men to donate to charity and tend to give higher dollar amounts. This pattern holds true across other women as well, including divorced, separated, widowed, and never-married women, especially as income rises. In addition, the key findings from this research also indicate that among the top 60% of earners, women are more likely than men to give (and give much more) to non-religious causes. However, at the highest net-worth levels, single men and women do not significantly differ in either the likelihood or amount of giving.
As you can see, most categories of women are giving more than men; however, at the highest level, men and women give the same. This tells us that gender may shape how and when wealth is deployed, but at the very highest levels of wealth (a.k.a., the billionaires’ ex-wives clubs mentioned in this article), access to capital and tax strategy often matter more than gender alone.
The tax advantages of post-divorce philanthropy
While many ultra-wealthy individuals are undoubtedly motivated by a sincere desire to create meaningful impact after divorce and leave a legacy behind for generations to come, large-scale philanthropy also carries substantial financial and tax advantages.
1. Offsetting income tax
Charitable donations (referred to as charitable contributions in the tax world) can help offset a spike in taxable income post-divorce. For example, a newly divorced ex-billionaire wife may now have a large amount of income that is subject to tax. Charitable gifts may help reduce the said wife’s taxable income, subject to certain limitations. When these women (or men) divorce an ultra-wealthy person, philanthropy can serve as a strategy to decrease taxable income. There are specific rules and limitations that apply to charitable contributions (for instance, the contribution must be made to a qualified organization) – so it’s best to consult with a tax professional before making any large donations.
2. Appreciated assets versus cash
One of the most powerful tax strategies in post-divorce philanthropy involves donating appreciated assets instead of cash. This is because of capital gains tax, which affects nearly every asset you own. In very basic terms, when you sell an asset, you’re taxed on the difference between what you paid for the asset and how much it went up in value. So if you paid $50 for a bicycle and then sold it two years later for $150, you might pay capital gains tax on $100. Of course, a lot goes into capital gains tax; see IRS topic 409 for more information.
However, there is good news! When an individual donates publicly traded stock, business interests, or other long-term appreciated property directly to a qualified charity (instead of selling the asset first and donating the cash), they generally avoid paying capital gains tax on the appreciation, according to IRS Topic No. 506.
In addition, if someone has owned an asset (like stock) for more than a year and donates it to charity, they may be able to deduct the asset’s current value — not just what they originally paid for it — on their taxes, as long as they follow IRS rules. (See IRS Publication 526.)
For example, let’s say someone gets $50 million in publicly traded stock as part of a divorce settlement, shares that were originally purchased for $5 million. If this person sells the stock, she could owe capital gains tax on the $45 million in appreciation. But if she donates a portion of those shares directly to charity instead, she generally avoids paying capital gains tax on the donated amount. In other words, by donating, say $10 million of the $45 million in appreciated stock directly to charity instead of selling it first, she could avoid a few million in capital gains taxes and potentially receive up to $3 million or more in income tax savings, creating more than $6 million in total tax efficiency on a single gift.
3. Estate Tax Reduction
While many of the women in the “billionaire ex-wives club” who are giving away massive amounts of money to charity are doing this now, while they’re still alive, it’s worth noting the benefits of philanthropy on estate planning taxes. 26 U.S.C. § 2055 states that any charitable giving shall reduce the amount of the estate in terms of what may be taxed. For example, a person’s estate is worth $20 million (well above the estate tax threshold) and $5 million of that estate is donated to charity, so that $5 million isn’t included in the taxable estate and lowers the amount subject to federal estate tax. Now, only $15 million may be subject to estate tax.
Sometimes it’s not about avoiding taxes, it’s about where that tax money should go
One lingering question is: Why are they doing it for the tax break? They would still technically have “more” even with paying taxes. However, sometimes it’s not about avoiding taxes, it’s about controlling where the money goes. These philanthropic efforts may be less about avoiding taxes and more about ensuring that their money goes where their values align. Whether it’s Melinda Gates focusing on women-centered charities or Mackenzie Bezos focusing on marginalized community donations, they may simply want to have the decision as to where that money flows, instead of handing it over to the government.
So is it charity or strategy? It’s probably both.
Philanthropy on a grand scale can be both authentic and strategic. The tax code of the United States heavily incentivizes charitable giving by providing certain benefits to those who donate. At the same time, people post-divorce are often recalibrating their lives and looking for more meaning and purpose. The combination means it has become more common to see billionaire exes giving away their wealth.
And, in the words of Mackenzie Scott, from her Giving Pledge letter: “In addition to whatever assets life has nurtured in me, I have a disproportionate amount of money to share. My approach to philanthropy will continue to be thoughtful. It will take time and effort and care. But I won’t wait. And I will keep at it until the safe is empty.”
It’s clear that for many ultra-wealthy women in particular, large-scale giving is not always just a matter of tax strategy, but an intentional assertion of independence, values, and legacy at a defining life moment. Whether motivated by tax efficiency, deep conviction, or a renewed sense of purpose, women like MacKenzie Scott have demonstrated that wealth can be deployed decisively and impactfully on their own terms.
