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Jeff Bezos joins megadonors club with $2bn fund to help the homeless

Sep 13 2018 21:45
Molly Schuetz, Bloomberg

Jeff Bezos and his wife MacKenzie Bezos launched a $2bn fund to help homeless families and create a network of nonprofit preschools in low-income communities.

The move catapults the world’s richest person into a rarefied group of billionaire megadonors at a time when his company, Amazon.com, faces growing scrutiny over its rising power and impact on the economy.

The Bezos Day One Fund will focus on two initiatives, the billionaire announced in an online post on Thursday. The first will fund existing nonprofits and issue annual awards to organisations doing “compassionate, needle-moving work” to shelter and support the immediate needs of young families. The second will operate a network of high-quality, full-scholarship Montessori-inspired preschools. The fund’s vision statement comes from nonprofit Mary’s Place in Seattle: no child sleeps outside.

“We’ll use the same set of principles that have driven Amazon,” wrote Bezos. “Most important among those will be genuine, intense customer obsession. The child will be the customer.”

With a personal fortune of $163.8bn, according to the Bloomberg Billionaires Index, the Amazon chief executive officer had been largely invisible in the world of philanthropy. His net worth has risen by $64.7bn this year alone as Amazon’s shares surged. Bezos’ relative silence was a stark contrast to peers like Bill Gates, whose foundation is the world’s largest, and Warren Buffett, who has vowed to give away the majority of his wealth.

Last year, Bezos solicited advice from the public via Twitter, asking how he could best use his wealth to help people “right now”. At the time, he said he was interested in projects that address urgent need but also produce lasting impact. The missive set off a frenzy of responses, including pleas to support health care, loan forgiveness and even offbeat appeals to back a leather fetish museum in Chicago.

Until now, Bezos, 54, had only taken small steps into philanthropy. The Bezos Family Foundation, best known for supporting children’s education, has been largely funded by his parents from Amazon holdings they acquired as early investors in their son’s enterprise. Outside of that, Bezos and his family’s known donations have included gifts to Princeton University and Seattle’s Fred Hutchinson Cancer Research Center, according to the Chronicle of Philanthropy.

It’s not surprising that the world’s richest person "is finally getting serious about philanthropy," said David Callahan, founder of website Inside Philanthropy. "With big fortunes like that, the only thing you can really do is give it away - unless you want the government to take half of it through estate tax."

The staggering fortunes of the likes of Bezos, Gates and Facebook CEO Mark Zuckerberg have created a second Gilded Age in the US and "a new generation of megagivers," Callahan said. "It was only a matter of time before Bezos would join this new era of big philanthropy."

Some of the world’s richest people have begun giving away their wealth while still running companies, while others embrace philanthropy full-time after stepping away from day-to-day business. Increasingly, the wealthy want to see their charitable giving put to work on immediate needs.

Gates didn’t fully throw himself into philanthropy until he stepped down as CEO of Microsoft in 2000. Since then, he and his wife have built the Bill & Melinda Gates Foundation, which had an endowment of $51bn at the end of 2017 and pledges to spend all its resources within 20 years of its founders’ deaths. Zuckerberg, 34, and his wife Priscilla Chan said in 2015 that they planned to give away 99% of their Facebook stock. Zuckerberg’s shares in the social network are currently valued at about $61bn.

Some 184 of the world’s wealthiest individuals and families, including Tesla’s Elon Musk and the co-founders of Airbnb, have joined The Giving Pledge, a commitment started by Gates and Buffett to give away at least half their wealth. Michael Bloomberg, the owner of Bloomberg LP, parent of Bloomberg News, is also a signatory.

American billionaire philanthropy is spreading elsewhere. In places like China and the Middle East, where public acts of charity are less common, the wealthy are starting to formalise their giving. Last week, Jack Ma, Alibaba Group Holding founder and China’s richest man, announced plans to step down and focus more on a new foundation that he said was inspired in part by Gates’ example.

While Bezos was thinking about where best to put his own money, Amazon stepped up its corporate giving, focused on growing inequality in its hometown of Seattle. Some activists and politicians have partly blamed the city’s problems on Amazon.

In 2016, Amazon renovated a vacant hotel on land designated for its new headquarters so it could be used temporarily by the nonprofit Mary’s Place to shelter 200 homeless families. Amazon is designating 47 000 square feet of space at its new corporate office for a permanent Mary’s Place shelter.

Earlier this year, under pressure from Amazon and other large employers, Seattle’s City Council repealed an employee head tax that would have funded housing and services for the homeless. Even so, Amazon insisted it was “deeply committed" to tackling homelessness in Seattle and said it would continue to invest in local nonprofits that work with the homeless.

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amazon  |  jeff bezos  |  philanthropy  |  billionaires
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