Amazon founder Jeff Bezos announced Thursday that he will give $2 billion to help homeless families and create a new network of nonprofit preschools in low-income communities.
The pledge, announced in a tweet, fulfills the promise he made last year when he tweeted that he planned to give money to charities that help people facing the most desperate, immediate need. Bezos asked for feedback from nonprofit leaders working on the front lines to help the planet’s neediest people.
The $2 billion gift establishes the Bezos Day One Fund, which will support two missions. The Day One Families Fund will steer money to existing charities that help the homeless. The Day One Academies Fund will create the preschools.
When he first asked for suggestions on how to jump-start his philanthropy, Bezos got an earful. The feedback was swift and high-volume with nonprofits bombarding Bezos with requests. He responded to at least one request for a gift early this year with a $33 million donation to TheDream.US, a charity that provides college scholarships to undocumented students, but no other large donations were publicly announced.
Bezos also entered the political arena. Earlier this month, he and his wife, MacKenzie, gave $10 million to With Honor, a veterans-focused political-action committee.
Until now, Bezos and his family have given a total of about $160 million to nonprofits over the past decade, according to the Chronicle’s analysis of the gifts he has announced publicly. Critics have complained that wasn’t a lot for a guy whose net worth Forbes recently pegged at nearly $163 billion.
Plenty of Advice
As Bezos mulled his options, Chronicle readers weighed in, as did former U.S. diplomat Richard LeBaron, who offered a letter written from the point of view of the father of modern philanthropy, industrialist Andrew Carnegie. Using Carnegie’s voice, he advised Bezos to give almost all of his money away. Making reference to Carnegie’s “Gospel of Wealth,” LeBaron suggested Bezos steer clear of some of the institution-building gifts to libraries and schools that the steel magnate favored and instead concentrate on reducing income inequality and making higher education more affordable, among other priorities.
Harold Pollack, a University of Chicago professor, also had ideas. Following an interview in which Bezos said Blue Origin, his commercial space-travel company currently in development, was the only enterprise large enough to absorb his vast fortune, Pollack suggested that Bezos instead make philanthropic gifts to improve science education and make health care affordable.
In his tweet today, Bezos refers to his new philanthropy as a “fund” and says he will create an organization to run the network of nonprofit preschools he envisions. But he had little to say about how he would actually structure his giving.
He has plenty of examples to follow. Bill Gates chose a private foundation. He and Melinda Gates have turned his Microsoft fortune into the biggest private grant maker in the country.
Mark Zuckerberg and Priscilla Chan opted for a limited-liability company. Contributions to LLCs are not tax deductible, but they offer more flexibility. Zuckerberg and Chan can make investments or flat-out philanthropic grants, but with an LLC, they don’t have to abide by the reporting requirements that foundations must adhere to, and they are free to use their company to lobby on legislation and support political candidates.
David Miller, a tax lawyer, suggested an alternative route for Bezos this summer. Instead of an LLC or a private company, Bezos should stash his fortune in a social-welfare, or 501(c)(4), organization. If he went that route, Miller wrote, Bezos would not be able to deduct the gift from his income taxes. But the appreciation in value of any Amazon shares donated to the new organization would be exempt from tax, something that might be more valuable to Bezos. In addition to having a lower tax liability, Bezos would be able to pursue political activities and avoid foundation reporting rules.
In his tweet announcing his plans, Bezos thanked people for their input.
“It fills me with gratitude and optimism to be part of a species so bent on self-improvement,” he wrote.
