Amazon CEO Jeff Bezos and his wife, MacKenzie, announced a $2 billion fund Thursday to help homeless families and create preschools.
“Two billion dollars is a lot of money, and it could do an incredible amount of good,” said Henry Berman, CEO of Exponent Philanthropy, a nonprofit that supports leanly-staffed philanthropic groups.
Bezos is the world's richest person, with an estimated worth of $164 billion. How he will use that fortune for philanthropy long has been a point of discussion, especially after June 2017 when he solicited ideas on Twitter for ways he could make a difference.
Now that question has been answered, at least in part. On Thursday, Bezos sent out a long Tweet introducing a $2 billion Bezos Day One Fund that will support two charities, one aimed at homeless families, the other at creating high-quality preschools in underserved communities.
The eye-popping $2 billion immediately puts the Day One Fund among the top 50 philanthropic foundations in the country, according to listings by the Foundation Center, which tracks philanthropic organizations.
The top five as of 2015, the last year for which numbers are available, were the Bill & Melinda Gates Foundation, with $40 billion, the Duke Endowment with $33 billion, the Ford Foundation with $12 billion and the Lilly Endowment with $11 billion.
In his tweet, Bezos said the exciting questions to ask were: "Where's the good in the world, and how can we spread it? Where are the opportunities to make things better?"
The two funds he introduced Thursday attempt to answer that.
The Day 1 Families Fund will issue annual leadership awards to organizations that are doing "needle-moving" work to provide shelter and hunger support for families with young children.
Its vision statement will come from a fundraising campaign, "No Child Sleeps Outside," for Mary's Place, a Seattle homeless shelter that Amazon donated more than 47,000 square feet of space to in one of its buildings and which provides a home to 200 women, children and families.
The Day 1 Academics Fund plans to launch and operate a network of high-quality, free Montessori-inspired preschools in underserved communities. Bezos said the network will give the organization the opportunity "to learn, invent and improve," using the same principals that have driven Amazon's growth.
The "Day 1" name comes from Bezos' insistence that it is always Day 1 at Amazon. In his annual letter to shareholders in 2016, he wrote, "Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1."
Amazon's main headquarters building in Seattle is also called Day 1. And each time the headquarters moves, the new building takes that name.
How will it be given away?
The biggest immediate question is exactly how the Bezoses will organize the donation. From the tweet, it’s not clear if they are creating a foundation or some other type of organization to hand out the money.
A foundation would have a very specific legal framework, with the $2 billion being put towards an endowment, at least 5 percent of which would have to be given away each year.
“It would be unusual to have a gift of this magnitude not to go toward starting a foundation,” said Amir Pasic, dean of the Lilly Family School of Philanthropy at Indiana University in Indianapolis.
“Gifts of $100,000 or more usually go to higher education or hospitals, because they can absorb it,” Pasic said.
The focus of the Bezoses' planned giving is politically unobjectionable, Berman said.
"It's apple pie and Chevrolet stuff. Who in their right mind would argue against trying to help homeless people and underserved preschoolers?" he said.
It comes after Amazon fought a bruising battle with Seattle this summer over a head tax that would have helped the city raise money to pay for homeless services. Housing costs have risen significantly in the area, leading to what city officials have called a homelessness crisis.
Many in the Seattle area feel the problem of homelessness has been exacerbated by the influx of thousands of highly paid tech workers at Amazon who have driven up rents and pushed out lower-income residents.
Whatever the Bezoses end up doing, no one in the philanthropy world necessarily expects them to use their money in the ways the wealthy traditionally have.
They have not, for example, signed the famous Giving Pledge, sometimes called the Billionaires' Pledge. It was created in 2010 by Bill Gates and Warren Buffett. Those who sign the nonbinding pledge promise to give at least half of their net worth to philanthropy, either during their lifetimes or upon their death. As of 2018, 183 individuals or couples have signed.
Jeff Bezos has always been an entrepreneur and a maverick, Pasic said. "He’s not going to follow any pre-established routes on how he uses his fortune. It will be very interesting to watch."