Billionaires are notoriously bad at something that should be quite easy: giving away their money.
In the pantheon of the ultra-rich, Jack Dorsey, as the world’s 410th-wealthiest person, is hardly the stingiest offender. But he has now kick-started one of the most radical experiments in this era of historic income inequality — whether it is possible to quickly give away more than $1 billion of his money, and to do it effectively. Dorsey is putting the lie to the claim from billionaires that this is impossible and that they need enormous teams, decades of deep study, total privacy, and, most of all, our patience, in order to smartly disburse their fortunes.
“I have a lot of ideas about philanthropy — that I’m not ready to share or talk about,” Jeff Bezos, now the world’s richest man, said a decade ago when asked about his plans. “Sometimes I think we try to solve problems before we understand the problem.”
“Our philanthropy is something I want to take my time with and develop and systematize,” Google co-founder Sergey Brin, now the world’s 14th-wealthiest person, said back in 2009. Since then, he has largely remained AWOL in the world of major giving.
This has been the sermon preached by America’s billionaires. And by modeling an alternative, Dorsey is offering one of the most convincing rebuttals.
Dorsey, the co-founder of Twitter and Square with a net worth of $5 billion, has taken his time. But then he said this April that he would give away what was then one-third of his assets to a new charitable vehicle, Start Small, for coronavirus relief efforts, primarily. It was, by far, the largest dedication of money to Covid-19 by a billionaire. What was more striking, though, was Dorsey’s willingness to disclose each gift in real time on a public Google spreadsheet.
Dorsey has now given away $90 million to five dozen nonprofit groups, both around the globe and in his backyard, on immediate needs and on longer-term rebuilding projects, for coronavirus issues and for racial justice, and all of this with a standout record when it comes to supporting minorities — a record that is earning Dorsey respect from experts and is surprising even those who originally saw the announcement as a self-serving publicity junket.
“I hope all of Silicon Valley is looking at what Jack is doing. I hope everyone who has signed the Giving Pledge is looking at what Jack is doing,” said Bob Pilon, whose REFORM Alliance took home $10 million from Dorsey. Pilon is worried about billionaires acting like perfectionists. “Not every single dollar is always going to be put to the absolutely most impactful use. But if you can get those dollars out there quickly, get them to effective organizations, I think that’s going to add a lot of value.”
The “earn now, figure out the giving later” approach became gospel in the world of billionaires, primarily for its convenience. Stephanie Ellis-Smith, who advises the mega-wealthy on how to give away their money, called this phenomenon “analysis paralysis.” Billionaires feel almost burdened by their enormous wealth, wealth advisers say, and feel such a responsibility to not screw up giving it away that they end up doing nothing — stockpiling money into private foundations or donor-advised funds and saving the hard decisions for their retirements, if they ever make them at all.
The worst-case scenario is a mistake that brings them ignominy, such as Mark Zuckerberg’s divisive $100 million gift to Newark schools in 2010, which has become a cautionary tale for well-intentioned billionaires who fear a similar public failure.
“What I’ve seen firsthand is many people who have intent to give away very significant resources, but they delay the actual giving,” billionaire John Arnold told Recode last year. “The intent is always in the future. And then they get too close to death.”
But advocates dream that times are a-changin’ in the world of the mega-rich — if only someone could show that it’s not so hard to avoid fumbles while moving real money. And that’s why so many eyes are on Dorsey as he tests a new way.
“The old model was optimizing for fear of failure and, in my opinion, the philanthropist’s legacy,” said Jen Carolan, who is well wired into Silicon Valley charity as a former managing director at New Schools Venture Fund, an education reform philanthropy.
Dorsey, who declined a request for an interview about this thinking for this story, is also among the first billionaires to direct major giving programs after the new wave of backlash to billionaire philanthropy. And some believe there are signs that Dorsey, more than others, has at least grappled with these critiques: As he walked five miles to and from work in 2018, he listened to the audiobook of Winners Take All, an influential, searing critique of billionaire philanthropy by Anand Giridharadas.
To some extent, Dorsey’s model is specific to this moment: The coronavirus ups the incentives for decisiveness and rapid-fire grants to people suffering right now from the pandemic. A spate of publicized killings of unarmed black people has spurred an urgent push to address racial injustice in the US. Choosing what issue areas to fund right now is a relatively easy decision. But in other ways, Dorsey’s approach is highly replicable for the billionaire class — even after the pandemic — by serving as a proof point that a lot of the process and bureaucracy that stalls their charitable giving are gratuitous.
So how is he doing it?
A sole person, Vanessa Terry, who also oversees Dorsey’s family office, is directing the donations, casting a dramatic contrast with the lumbering foundations of his peers. Dorsey himself has appeared on calls with some potential grantees. The speed this enables is the defining element of Dorsey’s giving, eight nonprofit leaders who received funding from him described in interviews.
A formal application? Pass. A reporting requirement? Nah. A site visit? Not even possible these days.
George McGraw, the head of the Navajo Water Project, which connects indigenous people to water sources, said that one phone conversation with Dorsey’s team was basically all it took to land $1 million.
“Within a few hours, we had an answer. And within a few days, the money was in the account,” he recalled. “I’ve never seen anything like this.”
This light touch has introduced new hurdles that some see as unfair: When Dorsey unfurled his six-tweet thread on April 7, nonprofits around the world raced to figure out how to get in front of Dorsey, who offered no public point of contact or website. And that has largely ended up favoring two groups of people: those who had relationships with Silicon Valley insiders, who could get an idea in front of the Twitter CEO; and those with connections to celebrities — or are celebrities themselves.
McGraw and others were able to get Dorsey’s attention through mutual friends who connected them. Pilon, along with other grantees like the cities of Oakland and San Francisco, were able to secure gifts because their mayors had long-standing personal relationships with Dorsey.
The traditional grantmaking process is not totally fair or meritocratic either, to be sure. But some activists say Dorsey’s grand experiment is flawed because it didn’t offer the hoi polloi an easy way to at least make their case, despite his high-minded promise to “operate transparently.” To some extent, this hurdle is a trade-off for his trademark speed.
Tyrone Grandison, who advises three nonprofits that he has been struggling to get in front of Dorsey, has taken to tweeting at Dorsey’s handle to try to get ahold of him. He said the whole experience left him “disappointed” in a project that showed so much promise.
“Having access to the right networks trumps everything else,” he said. “The initial claims of transparency in philanthropy were good in theory but have faltered in implementation.”
“It’s frustrating that the transparency is only on the allocation end,” said Cris Mercado, a social entrepreneur who spent a few days this spring trying to find a point of contact at Start Small. “It feeds into the ‘exclusive club’ feel that often surrounds tech.”
Some nonprofit heads have even asked for permission to edit Dorsey’s public spreadsheet, hoping the long-shot request may at least yield a human contact.
Contrast that with what it’s like to know — or be — a celebrity. Half of the total gifts Dorsey has given away have been made in a pooled donation with celebrities, such as Rihanna and Jay-Z. Several other donations have gone to charitable foundations tied to movie stars like Sean Penn or artists like Eminem and P. Diddy. Many of these celebrities are Dorsey’s personal friends, the type of celebrities that Silicon Valley figures like Dorsey increasingly party and co-invest with.
That raises the possibility that Dorsey is motivated in part to do favors for his famous buddies. That matters, says Hilde Van den Bulck, who wrote a book on celebrity philanthropists, because celebrity-created charities have a checkered track record, with some, such as the millions that Madonna spent to build a school in the African nation of Malawi, turning out to be boondoggles meant to do more for celebrities’ brands than for the world.
“They will pick what they think is cool — but it may not necessarily be, say, the priority in fighting Covid,” said Van den Bulck. “There are some celebrities out there who think the Earth is flat.”
One surprising upside of this celebrity focus? Dorsey’s reliance on the priorities of his celebrity friends seems to be giving him a unique funnel into nonprofits that serve minority populations, something that many billionaires and foundations struggle to do. Most of the celebrities Dorsey is working with are black or Latino.
Venus Ginés had barely heard of the Twitter founder when she asked Beyoncé’s foundation to fund her Houston women’s health organization, Dia de la Mujer Latina, with about $200,000. She ended up getting $500,000 — with almost all of the money coming from Dorsey, not Beyoncé.
“Latino groups rarely get acknowledged,” Ginés said. “It was just mind-boggling that somebody of his stature would think about our little organization, tucked away in Houston.”
The stats bear this out, too. Dorsey is doing better at allocating money than 95 percent of US charitable foundations when it comes to targeting his money to benefit the marginalized, better than 80 percent of them when it comes to benefiting people of color, and better than 97 percent of them when it comes to boosting immigrants and their families, according to mid-May research compiled by Ryan Schlegel of the National Center for Responsive Philanthropy.
Dorsey is earning similar applause in San Francisco, which, despite its poverty, tech billionaires have long neglected in favor of pet projects and moonshot ideas like life-extension research and colonizing Mars. Kim-Mai Cutler, a close observer of the Bay Area’s social sector, said she was “pleasantly surprised” by the local groups Dorsey had backed, saying the nonprofits he chose required real work to discover and were “well-respected within their own communities,” especially among people of color.
Any of this is only assessable because of one thing Dorsey has done that is definitely replicable: All of his gifts are disclosed on a Google spreadsheet. Charitable foundations don’t typically disclose grants until as long as two years later in obscure tax filings, while limited liability companies — philanthropic vehicles like Dorsey’s or Zuckerberg’s — aren’t legally required to disclose anything.
Matthew Goudeau, a longtime Bay Area fundraiser who worked with Dorsey’s team to land the single biggest gift to the city of San Francisco’s coronavirus relief fund — $15 million — considers that transparency “pretty radical.”
“In San Francisco especially, there’s been this tradition among the old-time families: You give quietly,” he said. “Now, in this era of mass communication and transparency, that doesn’t work anymore.”
There is little doubt that this transparency brings Dorsey goodwill, too, as a good Samaritan, which is especially important after a bruising 2018 fight over a San Francisco tax to combat homelessness that portrayed him as a stingy tech billionaire, along with a questionable prior charitable record. Every funding announcement brings a new row on the spreadsheet, and often a new @Jack tweetstorm about the nonprofit — one that also invites gushing praise for a benevolent, social-minded billionaire.
But that, too, is replicable. Rather than creating a charitable foundation adorned with the billionaire’s surname that lives long after their death, advocates hope the publicity Dorsey is getting serves as a potent sweetener for the billionaires who can’t figure out what to do with their fortune until they’re on their deathbed.
“I want to give out all my money in my lifetime,” Dorsey said on a podcast earlier this month to his friend Andrew Yang, to whose nonprofit he gave $5 million. “I want to see the impacts, selfishly, in my lifetime.”