Elon Musk’s SpaceX Shares to Kids Signal Bigger Trump Account Donations

Elon Musk recently announced plans to distribute shares of SpaceX to every child in the United States next year. This initiative involves utilizing Trump Accounts, a new form of tax-deferred investment accounts for children, according to Brad Gerstner, CEO of Altimeter Capital and founder of Invest America.

During an interview on CNBC's "Squawk Box" on Wednesday, Gerstner explained that Musk's gift, valued at approximately $10.5 billion, represents only a fraction of what is expected. "Elon is just the tip of the iceberg," Gerstner said, highlighting the potential for a broader wave of stock donations through these accounts. He expressed confidence in raising up to $100 billion within the next year to fund investment accounts for all American children.

Gerstner revealed discussions with a wide range of major technology leaders and founders, signaling strong interest in supporting this philanthropic effort. To put the scale into perspective, a $100 billion fundraising campaign would amount to roughly one-sixth of total U.S. charitable giving, which reached $592.5 billion in 2024, based on data from the National Philanthropic Trust.

In his personal commitment, Gerstner has pledged about $35 million to help establish Trump Accounts for children in Indiana, his home state. These accounts provide a new mechanism for tax-advantaged investing aimed at long-term wealth building for young Americans.

The U.S. Department of the Treasury recently introduced temporary regulations that expand the scope of Trump Accounts. Prior to this change, contributions were limited to diversified, low-cost index funds. The new rules allow donated individual stocks to be held within these accounts, a significant shift that encourages large-scale stock donations.

Adam Bergman, a tax attorney and founder of IRA Financial, described the Treasury's adjustment as a targeted move aimed at mega-donors and philanthropic foundations capable of pledging billions. This change enables donors to transfer sizable blocks of publicly traded stock without incurring hefty capital gains taxes, effectively facilitating more substantial gifts.

IRS CEO Frank Bisignano also noted the growing participation of philanthropists ranging from small contributors to those donating nine-figure sums, illustrating a broad spectrum of donor involvement.

Legal and philanthropic experts have pointed out that these new regulations grant donors notable influence over how children’s investments are managed within Trump Accounts. This level of control is uncommon in typical charitable giving structures and may affect how funds are allocated and grown over time.

Looking ahead, Gerstner shared plans to extend Trump Account eligibility beyond children to include all U.S. citizens under 40 years old. He suggested this could accelerate wealth accumulation by effectively "pulling forward 20 years of IRAs" and creating a platform for younger generations to start investing early.

According to U.S. Census Bureau data analyzed by CNBC, there are over 70 million children under 18 and approximately 90 million Americans aged 18 to 40. Expanding Trump Accounts to cover this broader group would require Congressional approval.

Senator Bernie Moreno, a Republican from Ohio, expressed support for this expansion on social media, calling it a "game-changer" and pledging to sponsor related legislation in the Senate. Gerstner noted bipartisan enthusiasm for the proposal but acknowledged that its passage remains uncertain.

This development fits into a larger trend of innovative philanthropic strategies that combine charitable giving with investment opportunities. By enabling stock donations in tax-advantaged accounts, high-net-worth individuals have new avenues to support children’s financial futures while optimizing tax efficiency.

As Musk’s SpaceX stock gift draws attention, it may inspire other donors and organizations to contribute in similar ways, potentially reshaping the landscape of giving and investment for younger generations in the United States.