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Jeff Bezos’s philanthropic projects aren’t as generous as they seem

Through his Day 1 Fund, Bezos is giving more than $97 million to nonprofits that provide homeless services. But there’s a downside.

Jeff Bezos participates in an event hosted by the Air Force Association on September 19, 2018, in National Harbor, Maryland.
Amazon founder and CEO Jeff Bezos participates in an event hosted by the Air Force Association on September 19, 2018, in National Harbor, Maryland.
Alex Wong/Getty Images

Last week, Amazon founder and CEO Jeff Bezos announced that he and his wife, MacKenzie Bezos, were donating $97.5 million to 24 organizations that provide homeless services across the country. The donation is part of Bezos’s $2 billion “Day 1 Fund,” a philanthropic endeavor announced in September that, according to Bezos, focuses on establishing “a network of new, non-profit, tier-one preschools in low-income communities” and funding existing nonprofits that provide homeless services.

Of those 24 organizations, 15 will receive $5 million grants; nine will receive $2.5 million. Notably, three of the grant recipients are in Washington, DC, and another is in northern Virginia, where Amazon plans to open half of its “second headquarters.” Only one organization is based in New York City, the other site of Amazon’s forthcoming HQ2 office.

It’s noteworthy that instead of dedicating the bulk of his charitable giving to organizations based in the cities that will soon house tens of thousands of Amazon employees — and, if critics’ fears are to be believed, doing so at the expense of longtime residents, many of whom are working-class — Bezos instead chose to spread his wealth around the country. More troublingly, though, the Day 1 fund suggests that Bezos, like other billionaire philanthropists before him, think the problems of homelessness, poverty, and displacement should be solved by a network of donors and nonprofits — and not by elected officials.

Bezos’s actions in Amazon’s home city of Seattle exemplify his approach to addressing problems of poverty and inequality: namely, that he prefers to do it on his own terms.

Jeff Bezos’s philanthropic model: whatever the government can do, nonprofits and the private sector can do better

Speaking at an event hosted by the Economic Club of Washington in September, Bezos said his decision to use the Day 1 fund to support nonprofits that focus on homeless services was inspired by Mary’s Place, a Seattle-based organization with a simple motto: “No child sleeps outside.”

Even before the Day 1 Fund, Bezos and Amazon had worked extensively with Mary’s Place in the past. Last year, Amazon announced that its new Seattle building, which is set to be completed in 2020, will also house a 200-bed Mary’s Place shelter. The previous year, Amazon let Mary’s Place turn one of its unused properties, a former Travelodge, into a temporary shelter. That shelter has since moved to a former Days Inn, which Amazon also owns. The company also donates uneaten food from its Amazon Go stores, including sandwiches and other perishable foods that would otherwise be thrown away, to Mary’s Place.

But there’s a catch. Despite the Mary’s Place motto, more than 4,200 of Washington state’s approximately 40,000 homeless students lived in Seattle during the 2016-’17 school year, according to a report by Washington’s Office of Superintendent of Public Instruction. Even as nonprofits like Mary’s Place open more shelters and spend more money on services for homeless children and families, the city’s unhoused population has continued to grow.

Despite these realities, Bezos seems to have decided that Seattle’s — and, presumably, the nation’s — homeless populations are best served by the nonprofit and private sectors. At the September event at the Economic Club of Washington, he succinctly summed up his thoughts on how best to solve not only the homelessness crisis but other problems of poverty and inequality. “If you have a mission you can do it with government, you can do it with nonprofit or for-profit,” he said, as quoted by CityLab. “If you can figure out how to do it with for-profit that has a lot of advantages: It’s self-sustaining.”

In other words, anything government does, a nonprofit can do better. And if it makes sense (and of course, profit) for a for-profit company to be involved, all the better.

Amazon opposes policies that would alleviate homelessness, even as Bezos donates to organizations that help the homeless

This philosophy explains why, despite supporting organizations like Mary’s Place, Amazon was instrumental in killing a bill in its home city of Seattle that would have taxed local businesses in order to fund affordable housing projects that keep people from becoming homeless in the first place. The bill, which the Seattle City Council unanimously passed in June, would have placed a $275-per-employee tax on local businesses making more than $20 million a year — businesses like Amazon. (Amazon declined to comment on the record, but an Amazon spokesperson did clarify that the Day 1 Fund is Bezos’s private philanthropic project and is therefore independent of Amazon.)

It should have been a success story. Instead, the City Council repealed the bill less than a month after it passed. Local lawmakers and community organizers said Amazon was the culprit. Before the bill passed, Amazon announced it was halting construction on a new project called Block 18. After the bill passed, Amazon donated $25,000 to a committee called No Tax on Jobs, which was created with the express purpose of repealing the tax through a referendum; Bring Seattle Home, the pro-tax group that formed before the bill passed, had raised just $30,000 from all donors, according to the Atlantic. Rather than facing a referendum, the City Council voted to repeal the bill.

After the repeal, Amazon was jubilant. “Today’s vote by the Seattle City Council to repeal the tax on job creation is the right decision for the region’s economic prosperity,” Drew Herdener, an Amazon vice president, told the Atlantic in a statement. “We are deeply committed to being part of the solution to end homelessness in Seattle and will continue to invest in local nonprofits like Mary’s Place and FareStart that are making a difference on this important issue.”

(It’s worth noting that Amazon’s partnership with Mary’s Place may not be as rosy as it seems, according to a May report by Slate’s April Glaser. Current and former Mary’s Place employees said that in exchange for “its connection with its wealthy neighbor,” Mary’s Place “tolerated major logistical nuisances to the detriment of its staff and clients” and “seemed to prioritize optics over a thoughtful approach to philanthropic giving.”)

How Bezos sees philanthropy

“The goal of the Day 1 Families Fund awards is to shine a light and support the organizations that are doing compassionate, needle-moving work to provide shelter for young families in communities across the country,” Bezos wrote in a press release announcing the donations. “These 24 organizations are working on a number of initiatives that support families in need — from emergency shelter and safe short-term shelter for families to get on their feet, to access and support for permanent housing and support services that help families move together.”

Through the Day 1 Fund, Bezos is giving money to nonprofits that desperately need it; they will in turn use that money to provide shelter and resources to people who desperately need help. The California-based organization Abode Services, which received $5 million from Day 1, plans to use the money to provide rental assistance and social services to even more homeless families, the organization’s executive director, Louis Chicoine, told me. Kelly Sweeney McShane, CEO of the Washington, DC-based organization Community of Hope, said the grant money will be used for a mix of short- and long-term projects focused on expanding and improving their existing services for homeless families.

“It’s one-time funding, so we want to be careful about how we use the grant and how we leverage it,” McShane told me. “In the short term, we are going to expand our program to prevent homelessness for families in the district, as well as supplement some of our other programs. We do everything from homelessness prevention to shelter to permanent housing solutions.”

But Amazon’s opposition to a tax that would solve the root causes of Seattle’s homelessness crisis — a lack of affordable housing, which is undoubtedly in part the result of rents and property values alike skyrocketing as a result of Amazon’s presence there — suggests that either Bezos hasn’t realized that Amazon is contributing to the displacement of working-class people or, worse, he simply doesn’t care.

In his book Winners Take All: The Elite Charade of Changing the World, Anand Giridharadas explains the mindset behind Bezos’s seemingly contradictory opposition to higher taxes and support for philanthropic giving. “By refusing to risk its way of life, by rejecting the idea that the powerful might have to sacrifice for the common good,” Giridharadas writes, Bezos and his fellow billionaire philanthropists are clinging “to a set of social arrangements that allow [them] to monopolize progress and then give symbolic scraps to the forsaken — many of whom wouldn’t need the scraps if the society were working right.”

If Amazon hadn’t gotten in the way of Seattle’s attempt to fund affordable housing — or if the city, unhindered by business interests, had acted sooner — would there be a need for a new Mary’s Place shelter? If cities across the country taxed businesses like Amazon in order to provide good work and adequate affordable housing for all people, would Bezos need to donate nearly $100 million to homeless services organizations?

With HQ2, New York and Virginia have chosen to give Amazon billions of dollars’ worth of tax breaks and other incentives — money that instead could have been used to increase homeless shelter space or renovate dilapidated public housing developments. Instead of taking money from Amazon and redistributing it to vulnerable people, local governments have chosen to do the opposite, contributing to Bezos’s vast fortune. In exchange, Bezos is donating a tiny fraction of his net worth to organizations that address the symptoms of inequality without tackling the root causes.

If Bezos’s commitment to homeless services seems too good to be true, that may be because it is.

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Correction: A previous version of this post misstated which building Amazon halted construction on, and the nature of the Mary’s Place shelter in that building.

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