Charities buy products and services all the time... for charitable purposes, of course. That money they spend goes to corporations.
That's what I meant when I said "They can direct their foundations to give billions of dollars to corporations controlled by their friends, who use that money (after taking a cut, of course) to do whatever it is the foundation was set up to do."
It's not "given" in the sense of a gift, but given as part of a trade. The corporations they purchase from still profit.
OK, You are correct, they can buy goods and services from corporations, but this will ONLY apply to Foundations, as DAF's are different. Plus, it's not like these foundations can get away with over-paying for goods and services. They have to file returns to the IRS, if the expenses start to look ridiculous, they can audit, just like they can audit anyone else.
DAF's are not controlled by the contributor, so this does not apply to DAF's AT ALL.
"it's not like these foundations can get away with over-paying for goods and services"
It doesn't have to be gross overpayment[1], it could just be funneling the money to companies that benefit friends, family, or people they want to influence or get favors in return.
"I still don't see why this is somehow bad"
It's bad because these billionaires get good PR for giving away money and hero worshiped for being selfless benefactors of the needy, while they might be lining their friends' pockets and maybe themselves, just doing so under the veneer of philanthropy.
Whether these "philanthropic" foundations actually do any good, or how much good they do for all the money spent and all the influence they have because of it is yet another issue that's explored elsewhere in this thread and the many articles that have been written about them.
[1] - though I wouldn't be surprised if some foundations get away with this... whether they get caught depends on a lot of things
How is funnelling money to their buddies any different than the entire rest of the world? This is how the entire world works, that you think it should somehow be different in charitable causes is the funny part.
In your personal dealings, if you have to buy X and your friend sells it and some random stranger sells it, would you rather buy it from your friend? If the answer is yes(which will be true for 99+% of the entire 8 billion people on the planet), then you are being at the very least a touch hypocritical.
I think with your attitude being fairly common, this good PR perspective doesn't seem to necessarily be true.
As for doing good, what does that have to do with anything? There are tons of non-profits out there, that are objectively failing at their mission. Should they all close as well, just because they had a bad year or two? Clearly whoever is funding and controlling the foundations thinks they are doing good. I guarantee even the most widely accepted non-profits get plenty of criticism at failing to do good. Good is not an objective measure anyway. If I think saving the last 2 stuffed Tux penguin's on the planet is important and I'm willing to pay for their continued survival, what does it matter that you think stuffed Tux Penguins is not doing anything good in the world. It's not your resources used to keep the last 2 stuffed Tux Penguins in good condition.
FYI: Foundations are generally required to spend at least 5% of the total fair market value of its noncharitable-use assets from the preceding year on charitable causes. This means that they will almost certainly close eventually.
That's what I meant when I said "They can direct their foundations to give billions of dollars to corporations controlled by their friends, who use that money (after taking a cut, of course) to do whatever it is the foundation was set up to do."
It's not "given" in the sense of a gift, but given as part of a trade. The corporations they purchase from still profit.