Seven Mistakes That New Billionaire Philanthropists Make—and How MacKenzie Bezos Can Avoid Them

sergign/shutterstock

sergign/shutterstock

The news that MacKenzie Bezos has signed the Giving Pledge, saying she’ll devote her Amazon fortune to philanthropy, isn’t all that surprising.

What else is she going to do with $37 billion?

While her ex-husband Jeff, like many corporate founders, may be wary of diluting his control of Amazon by giving away stock, MacKenzie has no such concerns, and indicates in her Giving Pledge letter that she’ll open the philanthropy spigot wide in coming years. “I won’t wait,” she wrote. “And I will keep at it until the safe is empty.”

MacKenzie’s promise to “keep at it” is important here, since effectively giving away billions of dollars is a lot harder than it looks. For one thing, big fortunes have a way of getting bigger, which means that if donors really want to empty the safe, at least in their lifetimes, they need to shovel the money out pretty fast. Even the hardest-working mega-givers in recent years—like, say, John and Laura Arnold—have accumulated wealth faster than they can give it away. Bill Gates and Warren Buffett are both nearly twice as rich as they were in 2010, when they rolled out the Giving Pledge—even though both men have given many away billions of dollars.

Who knows what will happen with Amazon’s stock in coming years, or whether MacKenzie will hold on to her shares. But if her wealth grows by 8 percent annually, the historic rate of return of the S&P 500, she’d have to give away at least $3 billion a year in order not to keep getting richer. To start actually emptying the safe, she’d need to give away more than that—something on the order of what the Bill & Melinda Gates Foundation gives away annually, which was $4.7 billion in 2017.

Or, to make another comparison, MacKenzie Bezos needs to start giving away about eight times as much money every year as the Ford Foundation if she wants to make any dent in her fortune.

Of course, just getting rid of the money isn’t the goal here; making the world a better place is the goal. And from her experience in giving so far—including last year’s $2 billion commitment with Jeff for early childhood education and homelessness—MacKenzie surely knows that there are a lot of banana peels that mega-givers can slip on as they move into ambitious, high-profile philanthropy.

Many people will be watching and judging her giving, and rightly so. As the scholar Rob Reich likes to say, today’s big donors, who are exercising growing power in public life, “deserve our scrutiny, not our gratitude.”

No doubt MacKenzie has been getting plenty of advice on how to give away her billions—including from people who’ve been in her situation.

Perhaps she’s connected with Laurene Powell Jobs, who’s been working for years now through her Emerson Collective to deploy the huge pile of wealth that her late husband left to her. Or maybe MacKenzie is in touch with Priscilla Chan, who’s built out the Chan Zuckerberg Initiative, moving hundreds of millions of dollars in grants, impact investments and advocacy contributions since its founding in 2015. Chan not only knows a thing or two about scaling up an organization; she also had a front row seat to her then-boyfriend Mark’s ill-considered $100 million investment in Newark’s school system.

Hopefully, MacKenzie has spent time with Steve and Connie Ballmer, who are right there in Seattle, and offer an exemplary model of how to dispose of enormous tech winnings. They’re tapping a $40 billion Microsoft stash to give big general operating grants to top nonprofits working to boost economic opportunity for poor children and families.

And obviously, MacKenzie should be talking to another Seattle couple—Bill and Melinda Gates, who have a lot to share about big league philanthropy, especially when it comes to monumental screwups.  

The Gateses are a great example of top philanthropists who’ve done a phenomenal amount of good in the world, literally saving millions of lives, and they’re also a resource for better understanding how things can go off the rails.

Here are a few common mistakes that new mega-givers make, and which MacKenzie Bezos can hopefully avoid.

1. Going it Alone

Maybe the easiest way for any billionaire to expand their giving dramatically and learn the ropes quickly is to tap into ongoing collaborations among funders—including some exciting new intermediaries that are moving money on a much larger scale to high-impact nonprofits. Unfortunately, too many new philanthropists (especially men) don’t connect to these outfits, and instead go it alone—reinventing the wheel and making avoidable mistakes.

Let’s hope MacKenzie Bezos is a joiner, not a loner. If she wants to expand her giving quickly for early childhood, the no-brainer move there would be to join Blue Meridian Partners, an ambitious funder collaborative that includes billionaire donors and legacy foundations united in the goal of scaling up effective organizations that create opportunity for poor kids. If MacKenzie wants to get into global health and development, she could join up with Co-Impact, a similar kind of intermediary that’s aiming to move cash on a large level to nonprofits working to create systems change in developing countries. To invest in strengthening the free press, MacKenzie could turn to the new American Journalism Project. And so on.

2. Not Deeply Listening

If Mark Zuckerberg is not too busy trying to rein in the Frankenstein he created with Facebook, MacKenzie should talk to him about his experience in Newark—where, to put it mildly, things didn’t work out as planned. Zuck kicked in $100 million for a very disruptive education reform scheme that didn’t have buy-in from key local stakeholders. While the effort wasn’t the total failure that critics have charged, as we’ve reported, it’s become a case study in top-down philanthropy gone sideways. After getting burned by that experience, Zuckerberg and Chan embraced a very different approach to giving that involves much more active listening and engagement with the communities they’re trying to help.

The Gateses, meanwhile, have their own sorry tales to tell about top-down misfires. Among their errors was bulldozing forward with the Common Core State Standards in a way that left parents and teachers feeling excluded and distrustful. The Gates Foundation, too, has shifted to an approach that involves more listening to key stakeholders, at least on education issues.

3. Relying Too Much on Elite Experts

One reason that philanthropists don’t listen deeply enough to the communities they’re trying to help is because they’re too enthralled with elite experts who seem to have all the answers. In a way, that’s understandable, given the circles that billionaires travel in, where they’re much more likely to meet bestselling authors, Harvard professors, scientists, and other denizens of TED-land than to connect with, say, an immigrant rights advocate working in a low-income neighborhood.

But effective giving requires rolling up one’s sleeves and spending time on the ground, connecting with front-line practitioners who have deep knowledge of social problems. The Ballmers are a good recent example of newcomers to big philanthropy who’ve spent a lot of time listening to key stakeholders and trusting that these folks actually know how to tackle some of America’s toughest challenges.

4. Moving Too Slowly and Cautiously

Given the pitfalls of large-scale giving, it’s not surprising that new philanthropists move pretty cautiously. That makes sense, at first. But I’m struck by how many top donors seem to stall out and fail to deploy increasing sums of money to attack the problems they care about—leaving their fortunes to get bigger and bigger. Especially troubling are those Giving Pledge members who are urgently worried about climate change, and yet either can’t or won’t use more of their wealth to attack the problem—and getting richer instead. I don’t get it. If you’ve signed the Giving Pledge, and you’re working on time-urgent problems, get a move on it.

Hopefully, MacKenzie Bezos will connect with Dustin Moskovitz and Cari Tuna, who are good examples of donors who’ve taken that sense of urgency to heart—while also making sure they’re learning to give effectively.

5. Shying Away From Policy and Advocacy

I’m not keen on the way that billionaires use tax-deductible philanthropic dollars to sway policy outcomes. If we’re serious about limiting money in politics, we need to find ways to regulate this power.

That said, as long as we have the system we do, I want donors like MacKenzie Bezos—who’s clearly worried about inequity—to effectively invest in policy advocacy to have more impact. In particular, new donors should closely study the strategies that conservative philanthropists have embraced over the past four decades to turn their values into policy wins.

As I’ve written elsewhere, givers on the right have built up a powerful infrastructure of think tanks, legal groups, leadership training institutes, and media outlets. They’ve patiently given loads of general operating support to core organizations like the American Enterprise Institute and Federalist Society. These donors believe in the power of ideas and ideology, following a long-term agenda for making change. And they’ve succeeded spectacularly.

Unfortunately, many of the new billionaire philanthropists worried about equity have shown little interest in learning from the right’s philanthropic playbook. They’ve backed policy and advocacy work, sure, but usually in much more narrow and short-term ways. But there are exceptions, including Herb Sandler, who in the past 15 years has emerged as one of the biggest backers of think tanks and other policy organizations that are advancing an equity agenda. MacKenzie should talk to Sandler to learn how he and his late wife Marion charted this path, which has been hugely successful. (The Sandlers’ greatest hits include ProPublica and the Center for American Progress, both created by the couple.)

6. Not Focusing on the Equity High Ground

If fostering a more equitable society is indeed a top goal for MacKenzie Bezos, I hope that she won’t make the same mistake of many top philanthropists on this beat, which is ignoring key drivers of inequality like bad fiscal policy choices, financial deregulation, and the collapse of worker rights.

I’ll skip the full rap here, since I’ve spelled it out elsewhere, and simply point to the 2008 financial crisis and 2017 tax law as exhibits A and B for why equity-minded philanthropists need to focus on the policy high ground. The financial crisis, which wiped out vast wealth in low- and middle-income communities, was preceded by years of risky de-regulation of Wall Street that few in philanthropy sought to counter. Even now, almost no donors focus on financial regulation. The 2017 tax law, meanwhile, packed on yet another big pile of needless debt that will translate, eventually and inevitably, into budget cuts that will affect every low-income community in America. Few funders back work on tax and budget issues, an area where the right has made major investments—helping shift more income and wealth upward, even as most Americans tread water economically.

More philanthropists than ever are talking about equity. But it’s still rare to find major living donors giving big to influence top-level economic decisions that have huge implications for everything else they care about. Let’s hope MacKenzie Bezos will be different.

7. Ignoring Climate Change

I’ll keep this one brief, and just say this: What’s the point of all the work today’s philanthropists and foundations are engaged in if America and the world finds itself consumed by a raging environmental emergency that unfolds within the lives of our children and grandchildren?

I’m not saying that every big donor like MacKenzie Bezos needs to make climate change their central issue. But I do think that many more philanthropists and foundations need to kick in for this cause, even if it’s not their top priority. They need to do whatever they can to ensure that everything they care about isn’t ruined.