Giving Pledge to $5.9 billion in 19 months

On Jan 9, 2019 Jeff Bezos tweeted his divorce announcement, ending his 25-year old marriage with MacKenzie Scott. The divorce would eventually be finalized on July 5, 2019. In between those dates (May 25 to be precise), MacKenzie signed the Giving Pledge. The Bezos were long criticized for not having signed the pledge when a huge majority of the Top 50 billionaires already had. The timing of her signing strongly indicates that it was probably Jeff B holding things back. MacKenzie’s closing lines in her pledge are revealing:

In addition to whatever assets life has nurtured in me, I have a disproportionate amount of money to share. My approach to philanthropy will continue to be thoughtful. It will take time and effort and care. But I won’t wait. And I will keep at it until the safe is empty.

Boy oh boy, She sure ain’t waiting!. 14 months later, she wrote out the first tranche of cheques totaling $1.7 billion — to 116 organizations, across 9 focus areas. On Dec 15, 2019 (19 months after signing the giving pledge), she announced her second round of grants, this time totaling $4.2 billion — to 384 organizations.

This is an unprecedented pace of philanthropic giving, placing her already at #8 on the greatest philanthropists by amount of USD. And the world’s 18th richest individual only just got started. Prominent folks above her in that greatest list? Bill Gates, Warren Buffet, Azim Premji, Andrew Carnegie, George Soros.

Decoding the first tranche

Organizations working to address equity (racial, LGBT+, and gender) received a whopping $765 million. Other big categories of focus are Economic Mobility ($400 million), Public Health ($128 million), Global Development ($130 million), and Climate Change ($125 million). MacKenzie also chose to highlight that the team of non-profit advisors that helped her through this process included key representation from historically marginalized race, gender, and sexual identity groups.

On the list of 116, 91% of the racial equity organizations are run by leaders of color, 100% of the LGBTQ+ equity organizations are run by LGBTQ+ leaders, and 83% of the gender equity organizations are run by women. The NGO sector is often accused of being opaque about how the charity $$ actually get spent. Considering that, MacKenzie’s model (outlined below) is especially courageous - indicating a strong belief in the due diligence process:

I gave each a contribution and encouraged them to spend it on whatever they believe best serves their efforts. Unless organization leadership requested otherwise, all commitments were paid up front and left unrestricted to provide them with maximum flexibility.

The due diligence funnel

In her Medium post, she describes the 4-month process of tranche that distilled a list of 6,490 organizations into the final 384:

To select these 384, the team sought suggestions and perspective from hundreds of field experts, funders, and non-profit leaders and volunteers with decades of experience. We leveraged this collective knowledge base in a collaboration that included hundreds of emails and phone interviews, and thousands of pages of data analysis on community needs, program outcomes, and each non-profit’s capacity to absorb and make effective use of funding. We looked at 6,490 organizations, and undertook deeper research into 822. We put 438 of these on hold for now due to insufficient evidence of impact, unproven management teams, or to allow for further inquiry about specific issues such as treatment of community members or employees. We won’t always learn about a concern inside an organization, but when we do, we’ll take extra time to evaluate. We’ll never eliminate every risk through our analysis, but we’ll eliminate many. Then we can select organizations to assist — and get out of their way.

Making the giving process human and soft

Because our research is data-driven and rigorous, our giving process can be human and soft. Not only are non-profits chronically underfunded, they are also chronically diverted from their work by fundraising, and by burdensome reporting requirements that donors often place on them. These 384 carefully selected teams have dedicated their lives to helping others, working and volunteering and serving real people face-to-face at bedsides and tables, in prisons and courtrooms and classrooms, on streets and hospital wards and hotlines and frontlines of all types and sizes, day after day after day. They help by delivering vital services, and also through the profound encouragement felt each time a person is seen, valued, and trusted by another human being. This kind of encouragement has a special power when it comes from a stranger, and it works its magic on everyone. We shared each of our gift decisions with program leaders for the first time over the phone, and welcomed them to spend the funding on whatever they believe best serves their efforts. They were told that the entire commitment would be paid upfront and left unrestricted in order to provide them with maximum flexibility. The responses from people who took the calls often included personal stories and tears. These were non-profit veterans from all backgrounds and backstories, talking to us from cars and cabins and COVID-packed houses all over the country — a retired army general, the president of a tribal college recalling her first teaching job on her reservation, a loan fund founder sitting in the makeshift workspace between her washer and dryer from which she had launched her initiative years ago. Their stories and tears invariably made me and my teammates cry.

Summarizing the 384

105 chapters of YMCA/YWCA, 36 universities/community colleges, 32 Meals on Wheels chapters, 44 food banks, 22 chapters of Easterseals, 47 chapters of United Way and 48 chapters of Goodwill were the notable recipients of the Dec 2019 giving blitz. The list of 36 EDUs is heartwarming — you won’t find them in any trending Top [xxx] list and I mean that as a compliment. This Bloomberg article recounts stories from a few surprised recipients: Scott King (executive director for Meals on Wheels of Tampa), which delivers food to about 850 homes and makes about 2,600 meals each day, had this to say:

“This comes at a great time for us,” he said. “There are areas in and around Tampa that aren’t being served and need to be.”

Betsy Biemann, CEO of Maine-based Coastal Enterprises Inc., said it received $10 million, equivalent to the size of their annual operating budget.

“It’s an amazing day at the end of what’s been a very challenging year,” said Biemann, whose nonprofit provides financing and advice to small businesses and entrepreneurs, especially those from rural areas or disadvantaged groups.

Closing note

Personally very gratified to see GiveDirectly (the global leader in unconditional cash transfers) as a recipient in both tranches for their Covid relief campaigns. I wrote about GiveDirectly a year ago - We’ve got cash - you’ve got mail