Since early April, when Jack Dorsey announced via tweet that he would transfer $1 billion of his equity in the payment-processing platform Square to a limited-liability corporation to support global Covid-19 relief efforts, he has been giving to charity on a grand scale, contributing big sums, supporting many groups, and doing it quickly.
His giving has gone both to help people most in need right now and to groups trying to correct the underlying systems that have made this moment so much harder for people of color and low-income populations.
Dorsey, the co-founder and CEO of Square and the social-media giant Twitter, is intriguing because in his first year of major public philanthropy, he is not getting hung up on studying the complexities of today’s problems before he gives, says Alison Powell, a partner in Bridgspan’s San Francisco office who works with wealthy donors. He is acting fast to provide relief to people who are suffering from multiple crises but also donating to organizations working to develop enduring solutions to systemic problems.
“It’s really interesting that some of his large gifts look at addressing inequities in both the short term and the long term,” Powell says. “Right out of the gate he’s taking a varied approach to change and acknowledging systematic racial injustice. That is an extremely powerful statement.”
That $1 billion he transferred — about 28 percent of his wealth at that time — went to an LLC called Start Small. Such entities allow donors to give to traditional charities, advocacy and political groups, and socially conscious business ventures without the disclosure and pay-out rules that govern private foundations. An LLC structure can make it easier for donors to hide where they are giving.
So far, Dorsey has funneled more than $418 million of the money he put into Start Small into a related donor-advised fund. He has given 119 organizations more than $209 million in gifts that range from $100,000 to $20 million. The recipients are primarily human-service and social-justice-nonprofits in the United States and abroad, according to the regularly updated tracking document he has posted publicly.
Dorsey also said in his April tweet that once the pandemic has been tamed, the focus of his giving through Start Small will shift to girls’ health and education and universal basic income. He has already started to give to those causes in the course of his pandemic giving, according the tracking document. Since his announcement in April, the total value of the LLC is nearly $2.4 billion so Dorsey will have a lot more money to give in the coming years.
Dorsey has placed few if any reporting requirements on the recipient groups, according to the five charities that agreed to talk to the Chronicle. The Start Small team’s process for doling out the money has been swift and efficient, the nonprofits say. The donations Dorsey gave to the five organizations have had a game-changing impact on their work.
“I was flabbergasted,” says Jonathan Osler, the development director of the Oakland Public Education Fund, about the $10 million Dorsey gave his nonprofit in May to provide free laptops and other technology to 25,000 low-income students in the city’s public school system. “It’s such a huge amount of money for most of us to wrap our heads around, and the scale of it is going to allow us to have an impact that is just incredibly exciting.”
The gift to Osler’s group aims to help close the digital gap for struggling Oakland families who lack enough technology at home to support distance learning brought on by the pandemic. It is the largest gift the fund has ever received from an individual donor.
Dorsey declined to speak with the Chronicle about his giving. A Square spokesman who answered questions on background provided few details about how Start Small works or what Dorsey looks for in the charities he backs. The spokesman said Start Small is a modest operation of fewer than five people and that part of the team’s job is to identify nonprofits that can put the money to use quickly.
How Dorsey’s gifts to the five nonprofits came about offers a glimpse into the workings of Start Small. Most of the contributions are unrestricted, and the charities say the money didn’t come with onerous grant agreements. Many believe Dorsey chose their charity because they were able to outline exactly how they would use the money immediately to help people struggling because of the pandemic. Charity officials say they provided basic information about budget and fundraising goals but that they weren’t required to have more than a few conversations with the Start Small team. They say they received the money within several weeks of their initial contact with Start Small.
Fortuitous Tweet
The hardest part for nonprofits that hope to land a Start Small gift is finding a way onto Dorsey’s radar. Most of the organizations the Chronicle spoke to have some connection to Dorsey or his companies or know people who were able to help get them in front of the Start Small team. For Osler’s group, that connection was Oakland Mayor Libby Schaaf and her Twitter feed. (Square is based in Oakland).
In April, Schaaf, the Oakland Public Education Fund, the Oakland Unified School District, and a nonprofit called Tech Exchange launched an online Covid-response fundraising effort to help families affected by the pandemic. One goal was to ensure public-school students had the technology they needed to start the school year online.
At a cost of roughly $500 per student (which includes a laptop, hot spot, software, and tech support), Osler and his team needed to raise a total of $12.5 million. On May 14, city officials held an online news conference to announce that the Oakland Public Education Fund had raised $1.8 million toward that goal and urged others to give.
Officials from some of the groups were already trying to connect with Start Small — Dorsey had donated $15 million to San Francisco’s Covid recovery fund a few days earlier — when Schaaf posted a snippet of the event on her Twitter page. Dorsey saw it and the next day announced in a tweet that he would give $10 million toward the effort.
Osler’s group received the money five days later and raised more than $13 million by late August. He says he believes his charity’s partnership with the city, the school district, and Tech Exchange was a key factor in landing Dorsey’s donation.
“We demonstrated that we are able to address a problem that is at this scale and which could only be done through this kind of partnership because it requires being able to operate through lots of different systems and bureaucracies,” says Osler.
Ties to Square
It doesn’t hurt to have connections. Unity Council, a 55-year-old human-service group that primarily serves low-income immigrants and people of color in Oakland’s Fruitvale neighborhood, landed $2 million from Dorsey in August to support its Covid-19 Resilience Fund. The charity provides direct cash assistance, food programs, recovery efforts for small businesses, help with housing, and support for job-seekers.
Dana Kleinhesselink, the charity’s development director, says she was putting out feelers to her network to find out who might have a connection to Dorsey when one of Unity Council’s board members introduced her to someone at Start Small. That introduction, coupled with her team’s clearly articulated email request for funding, helped her group attract Dorsey’s backing. Her team crafted a brief email with an attached presentation that laid out the details of exactly how Unity Council would use the money and how that aligned with Dorsey’s giving priorities.
The charity said it wanted $1.5 million for its programs plus an additional $500,000 that Unity Council would use to give $500 checks directly to people who need the money right away to buy necessities or pay their bills.
“Our goal is to mitigate the effects of Covd-19, and that is what we are going to do with every single dollar of this gift.” Kleinhesselink says. “I think they really did see that we are in the thick of everything going on with the pandemic and the absolutely stark economic and racial disparities in who is getting sick, how treatment is getting delivered, and what the impact is on people’s lives.”
Kleinhesselink says Start Small didn’t ask her team for a lot of metrics or for financial statements. She says the experience was much more like working with an individual donor rather than a foundation, which typically asks for reams of information about a charity’s work and finances and has multiple conversations with the group over many months.
It took about three weeks and a few Zoom calls for Hospitality Helps, a charity that makes and distributes restaurant-quality lunches and dinners to struggling families in San Francisco, to receive $100,000 from Dorsey in April.
Hospitality Helps was founded in March by two catering-company executives — Margaret Teskey and Walker Allen — who repurposed their company’s 19,000-square-foot catering facility to prepare meals for those hardest hit by the bad economy. The nonprofit delivers meals to people experiencing homelessness, women and children who have escaped domestic violence, and families in the Bayview-Hunters Point neighborhood, one of the city’s most racially diverse but poorest neighborhoods.
Teskey has catered Twitter and Square events for years. When she saw Dorsey’s announcement about his pandemic giving, she contacted people she knows at Square who put her in touch with Dorsey’s assistant. The assistant then connected Teskey to the Start Small team. Although Teskey had more access than most people, she says she didn’t interact with Dorsey directly. She still had to apply and make the case to Start Small for funding — and she wasn’t convinced her group would win Dorsey’s support.
Teskey and Walker say they are certain Dorsey donated not because of their business connection to his companies but because they were directly helping people of color and women and children hit hard by the pandemic and because they had raised $300,000 from other Bay Area donors before they approached Start Small.
“I think he really believed in what we were doing and was also impressed that we had already started up and were running and doing thousands of meals a day,” Allen says.
Beyond Silicon Valley
Dorsey’s giving isn’t limited to the Bay Area. In June, he gave $300,000 to St. Francis Community Services in his hometown of St. Louis. The money went to the charity’s legal-aid program, which is helping low-income immigrants in danger of eviction negotiate with landlords so they can keep their housing or find more stable housing — services that are still desperately needed despite the national moratorium on evictions through the end of the year.
Not all of the nonprofits have a connection to Dorsey or one of his companies, either direct or indirect. In August, Start Small donated $10 million to Boston University to jump-start its new Center for Antiracist Research, which is being led by the historian and bestselling writer, Ibram Kendi. The Boston University gift is unusual among Dorsey’s recent donations because Kendi didn’t know Dorsey and the university didn’t approach Start Small for funding, says Beth McDermott, vice president of development there.
“We were surprised,” McDermott says. “They reached out either several days before the center formally launched or something like on day three of its opening. It was really the best kind of starting gun that we could have.”
McDermott says she worked with one Start Small representative, whom she declined to name, and never spoke with Dorsey directly. But she says she got the impression that Dorsey’s team had done a lot of research on the new center’s plans before contacting the university and the center’s focus was appealing: using multidisciplinary scholarly research and data on racial inequities, trying to solve social problems through public-policy changes, and reaching out to a broad audience through books, media, and public events.
‘A Lot of Control’
Dorsey’s reluctance to talk publicly about his giving beyond what he posts on Twitter and Start Small’s unwillingness to shed any light on Dorsey’s giving decisions have caused consternation among nonprofits that would like to crack the Start Small code and unlock the door to Dorsey’s support. On the other hand, his commitment to publicly track the donations offers an unusual amount of transparency from an ultra-wealthy donor from the tech sector, which embraces secrecy.
Phil Buchanan, the head of the Center for Effective Philanthropy, says he appreciates Dorsey’s transparency but thinks it would be better for Dorsey to give through a traditional foundation with identifiable governance and reporting requirements.
“What we see with some of these tech donors is that they’re choosing these vehicles that allow them a lot of control over what is known and what is not known. I get why that’s good for them. I’m not sure it’s great for the organizations they fund or for the public’s perception of philanthropy,” Buchanan says. “At the same time, it’s great that there’s an effort to counter the systematic forces that have led to some people experiencing a disproportionate level of challenges and obstacles in our society, and he should be applauded for that.”
Kleinhesselink, of Unity Council, says she is glad Dorsey approaches giving differently than foundations do. She says while some may see flaws in his methods, there are also real problems in the methodical, institutional approach foundations employ. She has heard some charity leaders complain that they don’t know how to get a hold of Start Small, and they don’t understand the team’s process.
“Yes, that’s kind of a mystery, and it’s kind of frustrating. It’s a little bit like catching lightning in a bottle. But at the same time, I appreciate that it was a really fast proposal for me to write. It wasn’t like a 12-page-long narrative and all these millions of things,” Kleinhesselink says, “With a crisis like we have with Covid-19, we cannot afford to spend time on that. We must trust the organizations doing the work.”
