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The Ford Foundation: A Tax Act

Henry Ford II is commonly mistaken for Henry Ford’s child when in fact he is his grandson and the son of Edsel, Henry Ford’s only child. It was on this day in 1956 that Henry Ford II resigned as the chairman of the Ford Foundation, a nonprofit set up by Edsel Ford as a way to basically escape certain taxes imposed by the FDR administration.The Ford Foundation, started in 1936, quickly became the richest charity in the country. It all started thanks to particular taxes called “soak the rich” which were forced on estates worth more than $50 million. The Ford Foundation would receive the bulk of the elder Henry Ford’s estate, as well as an endowment from Edsel’s, resulting in a 95 percent (non-voting) stake in Ford Motor Company valued at nearly $493 million. This ensured $25 million of dividends per year, making the Ford Foundation the richest charity in the USA by a large distance.
For example, when Henry Ford died in 1947 the foundation saved the Ford Family more than $321 million in inheritance taxes. This isn’t to say the foundation hasn’t done great things for society. In the beginning it had a fairly vague mission statement, claiming it would give money “for scientific, educational and charitable purposes, all for the public welfare.” Until the founding of the Bill and Melinda Gates Foundation in 2000 the Ford Foundation continually ranked as the highest giving US non-profit.

Brian Corey

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