The Amazon founder, the world’s wealthiest person, offered only some general principles for the Bezos Day One Fund, which will begin with $2 billion.
The world’s richest man announced a plan to donate about 1.2 percent of his current wealth to address family homelessness and early childhood education, drawing praise and raising questions about the mark Jeff Bezos intends to make and how a new and powerful funder will influence the recipients of his largesse.
More than a year after publicly soliciting suggestions for a short-term philanthropic strategy, the Amazon founder said Thursday that he and his wife, MacKenzie, would commit $2 billion to fund existing nonprofits working with homeless families and to create a network of nonprofit preschools in low-income communities.
The initiative, national in scope but already influenced by Seattle-based efforts, will be called the Bezos Day One Fund, a name that transplants the business philosophy that built Amazon squarely on to Bezos’ biggest philanthropic effort yet.
The Day 1 Families Fund will make annual awards to organizations “doing compassionate, needle moving work to provide shelter and hunger support to address the immediate needs of young families,” while the Day 1 Academies Fund will start and operate a network of “full-scholarship, Montessori-inspired preschools in underserved communities,” Bezos said on Twitter.
He described an organization to operate the preschool network modeled on Amazon’s corporate principles, most importantly “genuine, intense customer obsession,” he said. “The child will be the customer.”
An Amazon spokesman didn’t have details on who would run Bezos’ new initiative, or where the group would be based. The $2 billion, he said, is a starting point, but no timeline was revealed for spending even that sum.
The structure of Bezos’ new philanthropic push is still coming into focus.
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The name “Bezos Day 1 Foundation” was reserved Wednesday as a nonprofit corporation with the Washington Secretary of State’s office, suggesting it will be based here. Another entity, the Bezos Foundation, was registered with the state on Jan. 23 as a nonprofit corporation. These are in addition to the Bezos Family Foundation, headed by Jackie and Mike Bezos – Jeff Bezos’ parents – a nonprofit focused on education incorporated in 2000.
Bezos is worth $164 billion, according to the Bloomberg Billionaires Index, a sum mostly derived from the roughly 16 percent stake in Amazon that he owns.
Public donations by the 54-year-old and his family have included $65 million over the last decade to the Seattle-based Fred Hutchinson Cancer Research Center and $33 million early this year to fund TheDream.us, a scholarship program for children brought to the United States illegally.
Giving at scale
But Bezos’ giving to date has been on a scale far smaller than the two men just behind him in the wealth rankings, Microsoft co-founder Bill Gates and Berkshire Hathaway’s Warren Buffett.
The Bill & Melinda Gates Foundation officially formed in 2000 with a focus on global health and U.S. education reform. It wasn’t Gates’ first foray into giving. He and wife Melinda had previously established the William H. Gates foundation (named for his father), which focused on local as well as global health programs. That fund merged with the Gates Learning Foundation, which expanded internet access to public libraries, to form the organization it is today. Buffett pledged more than $30 billion to the Gates Foundation in 2006.
The foundation had given $46 billion in grants through 2017, and is the largest in the world with an endowment of more than $50 billion.
The Gateses and Buffett in 2010 created the Giving Pledge, a commitment by the world’s richest people to “publicly dedicate the majority of their wealth to philanthropy.” It has since been signed by 184 people. Bezos, so far, is not among them.
Philanthropy on this scale is not without its critics.
Rob Reich, co-director of Stanford University’s Center on Philanthropy and Civil Society, said billionaires often receive praise for large gifts, but Americans should view them with skepticism.
“Big philanthropy, the kind Bezos is practicing, as well as Bill Gates, is a form of power,” he said. “It’s converting private wealth into public influence.”
That has been particularly true in public education. An analysis by the Associated Press earlier this year found that the Gates Foundation gave some $44 million to outside groups shaping state education plans as part of a wider network that has driven the national education conversation.
For Reich, the problem is that big donors aren’t accountable to the public like elected officials and are mostly unregulated. They’re able to direct money to whatever cause they see fit even after their death, he said, and may not have to disclose their philanthropic activity.
The legal structure of a philanthropy makes a difference.
For example, Facebook co-founder Mark Zuckerburg and his wife Priscilla Chan, who pledged in 2015 to spend all but 1 percent of their wealth from the company on charity, nested their philanthropy within a limited-liability company. LLCs aren’t legally required to disclose as much as foundations, Reich said, and they aren’t restricted from giving to political campaigns or investing in for-profit companies. He said there’s almost no way of tracking the full range of philanthropic activity in an LLC unless the company chooses to disclose that information. Money can also be taken out of an LLC, which cannot occur when money is placed into a foundation, Reich said.
Those differing disclosure requirements are part of why it’s difficult to rank the most philanthropic individuals. The Bezoses’ $2 billion commitment, had it all been given in 2017, would have placed them alongside Zuckerberg and Chan and behind the Gateses atop the Chronicle of Philanthropy’s list of the most generous Americans.
Early education focus
Bezos’ focus on early childhood education could have an out-sized impact.
A large body of education research has shown that early learning programs, which serve children up to 4 years old, can improve social, academic and economic outcomes for students who traditionally fall behind once they enter kindergarten.
Advocates welcomed Bezos’ attention, approach and funds, noting the dire need to expand access to preschool, particularly in the low-income areas he plans to target. But there hasn’t been much research on whether Montessori programs, a model of schooling that encourages children to direct their own learning, improve outcomes for low-income students, said Steve Barnett, founder and co-director of the National Institute for Early Education Research (NIEER).
“If they can bring what they’ve learned in business to quality improvement then maybe they can provide some real innovation,” Barnett said.
Washington receives high marks for spending on preschool, according to Barnett’s group, but its eligibility requirements are so rigid that enrollment growth here is slower than the national average. A family of four with yearly income above $27,600 typically doesn’t qualify for the state’s Early Childhood Education Assistance Program. A general lack of funding means only a fraction of poor families can enroll their kids in government-subsidized programs.
More than a year ago, Bezos posted to Twitter a request for suggestions on philanthropic initiatives designed to make a difference in the short term. That’s a contrast to the long view that Bezos has preached at Amazon and Blue Origin, the space-travel technology company he has been funding with $1 billion a year through the sale of Amazon stock. Another of his side projects is a 10,000-year clock being built under a mountain he owns in Texas.
“Our lives are better than our great grandparents’ lives, and their lives were better than their great grandparents’ lives before them,” Bezos said Thursday in his Twitter message. “If our own great grandchildren don’t have lives better than ours, something has gone very wrong.”
His stepped-up philanthropy comes amid criticism of modern capitalism in historical context, with Amazon often brought up as Exhibit A. The archbishop of Canterbury, leader of the Church of England, Wednesday decried aspects of the gig economy as “simply the reincarnation of an ancient evil” and criticized “companies like Amazon” for taking advantage of a tax system that allows them to pay too little.
Seattle City Councilmember Kshama Sawant, a strident Amazon critic and leading proponent of a failed effort to tax large companies earlier this year, dismissed Bezos’ philanthropy as an attempt “to mitigate his image.”
Amazon, which was briefly the second company valued at more than $1 trillion, has been criticized for years for largely taking a pass on the formal donation programs of many corporate peers. The company’s approach has changed a bit in recent years with the growth of its public-relations and corporate-affairs group, and Amazon has moved to consolidate scattered philanthropy initiatives under way and offer official support for more.
But throughout its history, the company has pushed back vigorously on taxes.
Earlier this year Amazon played a pivotal role in diminishing and ultimately defeating a Seattle business tax to fund homelessness services and affordable housing. The company paused construction on one building and threatened not to occupy another it had leased, objecting to the prospect of a tax that would have amounted to about $500 per employee at large businesses in Seattle.
The Seattle City Council went ahead with a lower tax of $275 per employee, which would have raised $47 million a year – including an estimated $12.5 million from Amazon. Amazon then contributed $25,000 to an initiative campaign that pressured the council to reverse itself and repeal the smaller tax a month later.
Targeting family homelessness
Amazon has not ignored homelessness, making space in its growing headquarters for Fare Start restaurants that train workers for food-service jobs, and for Mary’s Place, a shelter for homeless women and children. Amazon said in August it expects to spend $40 million on those efforts.
The new Bezos contributions appear to be unfolding without much input from even Amazon’s close partners. Mary’s Place executive director Marty Hartman said the announcement Thursday was a surprise, even as Bezos cites the organization’s “no child sleeps outside” mission as inspiration for the Day 1 Families Fund.
Family homelessness “continues to be a challenge to bring everyone in off the streets,” Hartman said. “It is not just Seattle and Washington. We’re seeing this problem on the entirety of the West Coast. But I’m so grateful for the vision and the idea. We can all get behind this.”
The magnitude of Bezos’ commitment has the “potential to put a dent in family homelessness,” depending on how it’s used, said Nan Roman, chief executive of the National Alliance for Ending Homelessness.
A January 2017 count found nearly 185,000 parents and children in the U.S. without permanent housing, and almost 17,000 living outside.
The U.S. Department of Housing and Urban Development spent about $700 million in 2015 on family homelessness through competitive grants, she said.
“So, yeah, it’s a sizeable amount of money,” Roman said. “But it would have to be used very strategically.”
Seattle Times reporters Dahlia Bazzaz, Vernal Coleman, Asia Fields and Rachel Lerman contributed reporting.