MacKenzie Bezos and the Pitfalls of Tech Philanthropy

May 29, 2019 0 By NIKESHOE

Nearly two months after her divorce from Amazon CEO Jeff Bezos was finalized, MacKenzie Bezos has made a plan to be far more generous than she and her former husband were as a couple. When the pair split, she became one of the richest women in the world, with a fortune estimated to be worth more than $36 billion. Now she wants to start giving it away.

“I have a disproportionate amount of money to share,” MacKenzie, a novelist, wrote bluntly in an otherwise literary letter announcing her decision to join the Giving Pledge Tuesday. “My approach to philanthropy will continue to be thoughtful. It will take time and effort and care. But I won’t wait. And I will keep at it until the safe is empty.”

Since it was founded by notable rich people Bill Gates, Melinda Gates, and Warren Buffet in 2010, the Giving Pledge has attracted over 200 wealthy individuals from around the world who publicly commit to donate at least half of their money either during their lifetimes or in their wills. While signaling you’re about to disperse at least $18 billion is notable under any circumstances, MacKenzie’s announcement attracted particular attention in part because the Bezos fortune has been tightly held so far. Jeff, literally the richest person in the world, has committed far less to philanthropic efforts. Last year, he announced he would spend just $2 billion of his $150 billion fortune on charity.

Louise Matsakis covers Amazon, internet law, and online culture for WIRED.

But even Jeff was willing to congratulate MacKenzie on her decision Tuesday. “MacKenzie is going to be amazing and thoughtful and effective at philanthropy, and I’m proud of her,” he wrote on Twitter. “Pay taxes, Jeff,” someone else replied. (Amazon paid no federal income taxes in 2018, largely as a result of Republican tax cuts passed the year before.)

That exchange neatly sums up the debate over the role of philanthropy in the US today.

In 1889, steel magnate Andrew Carnegie, perhaps the richest man in history, wrote a pamphlet called “The Gospel of Wealth,” in which he advocated for the wealthy to spend their lives donating to public institutions like libraries and universities. Carnegie called the practice “the true antidote for the temporary unequal distribution of wealth, the reconciliation of the rich and the poor—a reign of harmony.” The only problem is it hasn’t worked. Inequality in the United States is likely worse than it was during Carnegie’s era, despite the fact that the number of registered nonprofits in the United States has ballooned.

Meanwhile, the technology sector has made a small group of founders, early employees, and investors incredibly wealthy. Some of them have begun rebranding as philanthropists, like WhatsApp cofounder Brian Acton, Pinterest cofounder Paul Sciarra, and Brian Armstrong, CEO of cryptocurrency exchange Coinbase, who all signed the Giving Pledge in the past year as well.

But critics of the Giving Pledge and similar initiatives say they amount to little more than PR plays. If MacKenzie and her fellow elites spend their fortunes slower than they anticipate, there won't be any repercussions: They aren’t under any legal obligation to meet the requirements of the Giving Pledge, which its website describes as a “moral agreement.” It’s difficult to track whether every billionaire who signs adheres to the pledge, and several may not have done so, according to a Bloomberg report from 2015.

More broadly, charitable efforts carried out by the 1 percent don’t fix the systemic issues of inequality they have benefited from. “The richest and most powerful people in the world are unwittingly fighting on both sides of a war,” Anand Giridharadas, author of Winners Take All and a prominent critic of charity efforts in the tech sector, said at a WIRED conference last year. “Causing, by daylight, problems that they simply will never be able to undo by philanthropic moonlight.”

Rich people often channel their money into pet causes, rather than direct aid to people in material need. Groups financed by members of the Koch family, who made billions in the oil and gas industry, have helped kill public transportation initiatives across the country. North Carolina multimillionaire Art Pope has used his wealth to fund organizations that went on to advocate for voter suppression laws. Some of this wealth has flowed to liberal issues too, notes David Callahan in his book The Givers: Wealth, Power, and Philanthropy in a New Gilded Age. He points to Tim Gill, for instance, a software engineer who sold his company and later donated hundreds of millions to LGBTQ causes.

But even when the rich donate to admirable efforts, the money doesn’t always have its intended effect. When Facebook CEO Mark Zuckerberg donated a whopping $100 million to schools in Newark, New Jersey, returns on that investment were mixed: Student achievement levels increased somewhat in English, but not in math. As chronicled in Dale Russakoff’s 2015 book The Prize: Who’s in Charge of America’s Schools? teachers, parents, and students were often left out of the decisionmaking process over what should be done with the money. Some of the initial cash was spent on consultants, who were paid up to $1,000 a day.

Of course, it’s almost certainly better for billionaires to give away their fortunes than hoard them, especially when the funds go to supporting basic needs like food and health care. The Bill & Melinda Gates Foundation, for example, says it has committed almost $3 billion in grants to combat malaria, a disease that affects over 200 million people around the world each year. Since 2010, the World Health Organization estimates malaria mortality rates have fallen 29 percent, thanks to prevention and control measures. (Meanwhile, Bill Gates continues accumulating wealth.)

In the meantime, backlash against inequality continues to grow. A recent poll found 76 percent of registered US voters believe the wealthiest should pay more in taxes. Presidential candidates like Elizabeth Warren and Bernie Sanders have proposed increasing taxes on the rich, positing that forcing the 1 percent to pay their fair share would be a true antidote to inequality—rather than charity.

For now, MacKenzie Bezos hasn’t revealed many specifics about how she plans to distribute her fortune. In 2014, she started an organization that advocates against bullying, and it’s possible some of the money could go to similar efforts. No matter what, in giving away her money, MacKenzie will be exercising enormous power that few people in the world can match.

Have a tip about Amazon? Contact the author at louise_matsakis@wired.com or via Signal at 347-966-3806.