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I’ve written recently about the vast wealth now in the hands of tech billionaires, in particular Elon Musk and Jeff Bezos, and how they should consider breaking up their companies to bolster our Democracy. Here, I want to delve into another facet of what might be considered their personal responsibility namely, philanthropy.
First, among this cohort, it’s widely acknowledged that Bill Gates is light-years ahead of the others not only in terms of his own giving and with the Gates Foundation, but also in terms of organizing his fellow billionaires into joining the Giving Pledge. And of course all Gates has for his trouble is trolls insisting he created the coronavirus. (No good deed goes unpunished, even if you are one of the richest people in the world. Maybe especially if you are.)
Before we delve into Musk and Bezos’ giving, a quick word about MacKenzie Scott, the ex-wife of Jeff Bezos, who suddenly went from a mostly anonymous spouse to one of the wealthiest women in the world. Scott seems to have recognized that responsibility because in short order after her divorce two years ago, she stepped up. Last July, she gave $1.7 billion to historically black colleges and universities. And then in December she gave another $4.1 billion to fight COVID.
“I thought MacKenzie Bezos Scott did a bunch of things great,” says Chuck Collins of the Institute for Policy Studies. “She didn’t create a huge philanthropic intermediary in her mirror image that will exist for the next century, where her unborn great grandchildren will still be giving the money away. She’s moving money in a nimble, efficient way. She’s giving to groups that have been left out of the decision-making process, excluded communities, racial justice organizations.”
Having tens of billions of dollars suddenly billion plopped into your lap is very different from a fortune mushrooming over a number of years, and of course Scott can sell her shares without it impacting Amazon’s (AMZN) stock price the way it would if her ex-husband announced that, say, he was dumping 25% of his AMZN stake.
More on Bezos in a second, but first let’s take a look at Elon Musk, who became stratospherically wealthy overnight. (See this five year stock chart.) To be fair it’s very different to plan philanthropy when you have $200 million dollars versus when you have $200 billion. (Such problems!) But Musk gets that, which Recode did a nice job getting into, starting with a typically iconoclastic Musk tweet.
The Musk Foundation’s website is ridiculously bare bones, and doesn’t indicate any sort of giving by Musk. According to Forbes, it appears Musk has given away at least $100 million over the past 20 years to various causes such as scientific research, artificial intelligence, the University of Pennsylvania (Musk’s alma mater) and the Sierra Club. Musk also signed the Giving Pledge in 2012.
Forbes notes, “In 2018, [Musk] tweeted that he would sell around $100 million worth of Tesla stock ‘every few years’ for charity and will make ‘major disbursements in about 20 years when Tesla is in a steady state.” So watch in 2038! But Musk better get cracking if he plans to give away a ‘majority of [his] wealth to philanthropy or charitable causes, either during [his] lifetimes or in [his] will,’ as the Giving Pledge stipulates. Hence his tweet for help.
It makes sense that Bezos, who’s been super-rich longer than Musk, has been more philanthropic. Bezos reportedly made the biggest philanthropic gift of 2020, a $10 billion grant to start the Bezos Earth Fund, “...a global initiative [that] funds scientists, activists and NGOs...that help preserve and protect the natural world.” And Bezos, along with Amazon, have given hundreds of millions to other organizations including the Smithsonian, local shelters in Washington state and to fight Alzheimers. (No doubt Bezos and Scott are keeping tabs on each other’s largess.)
A problem for Bezos is that it’s difficult for him to match the scale of his giving with his ever-increasing net worth. Example: Bezos gave $500,000 to Worldreader, an NGO which seeks to “bring literacy to outlying, under-served areas by supplying towns and villages with e-readers and ebooks.” Leaving aside the fact this sounds like a great way to introduce kids to the Kindle and Amazon.com, that $500K Bezos gave is the equivalent of someone with a net worth of $1 million giving Worldreader around $3. (I understand that philanthropy by rich people is thankless with people like me around.)
It could be the case that Musk and Bezos give anonymously. I once asked Steve Jobs why he wasn’t more philanthropic and he responded with a question:
“How do you know I don’t give anonymously?” Jobs asked me.
“So do you?” I asked back.
“I’m not going to tell you,” Jobs said.
Actually Alexa Cortes Culwell, co-founder of Open Impact, a philanthropy research and advisory firm based in San Mateo, CA, says wealthy technologists do their part when it comes to philanthropy. “We know Silicon Valley outpaces the country in growing wealth. In fact, Silicon Valley outpaces on giving. If you look at how it compares to other cities and the state overall, Silicon Valley is quite generous.”
Good thing that’s happening because the rest of us aren't so charitably inclined right now apparently.
“The concentration of wealth around the country is becoming even more remarkable and is reflected in overall patterns of giving,” says Amir Pasic, dean of the Indiana University Lilly Family School of Philanthropy. “There are fewer households in the U.S. that are giving. Most nonprofits are relying on a smaller number of wealthy donors.”
Which means that more and more charities, NGOs and foundations will be leaning even more heavily on the super-wealthy, which seems to be an unhealthy trend in our country these days.
Andy Serwer is editor-in-chief of Yahoo Finance. Follow him on Twitter: @serwer.