MacKenzie Scott’s Money Bombs Are Single Handedly Reshaping America(bloomberg.com)
bloomberg.com
MacKenzie Scott’s Money Bombs Are Single Handedly Reshaping America
https://www.bloomberg.com/graphics/2021-mackenzie-scott-donations/
112 comments
Well if you want to ultimately have the most charitable impact, "make billions and THEN do good by giving it back" can actually do the most good. By an extraordinary magnitude.
If you think your $1 million today will become $10 million in 10 years, and then $100 million in another 10 years, and then $1 billion after thirty years total... wouldn't it seem deeply wrong to give away the $1 million today, and throw away the opportunity to do $999 million of good in 30 years? Or from an equivalent perspective, to do $999 million of future harm in exchange for a mere $1 million of good today.
Obviously it depends on whether the money will grow, whether who you give to invests it themselves, it's a balancing of risk reward etc. But the idea that you always ought to give charitably now rather than invest and give later seems deeply flawed.
If you think your $1 million today will become $10 million in 10 years, and then $100 million in another 10 years, and then $1 billion after thirty years total... wouldn't it seem deeply wrong to give away the $1 million today, and throw away the opportunity to do $999 million of good in 30 years? Or from an equivalent perspective, to do $999 million of future harm in exchange for a mere $1 million of good today.
Obviously it depends on whether the money will grow, whether who you give to invests it themselves, it's a balancing of risk reward etc. But the idea that you always ought to give charitably now rather than invest and give later seems deeply flawed.
> If you think your $1 million today will become $10 million in 10 years
I think we have to look at where that other $9million comes from, because it's not just appearing in your pocket magically. When an asset grows 10x and production didn't grow 10x, that means the asset grew by draining smaller pools. The people you're waiting to help may be in the same pool as the ones being hurt in the meantime. Like...if I steal money from all of my neighbors and then give it back to them later, the amount I can give them is greater than what I could give before I took from them. But I bet they would rather me not take from them first just to give them back what was originally theirs.
I think we have to look at where that other $9million comes from, because it's not just appearing in your pocket magically. When an asset grows 10x and production didn't grow 10x, that means the asset grew by draining smaller pools. The people you're waiting to help may be in the same pool as the ones being hurt in the meantime. Like...if I steal money from all of my neighbors and then give it back to them later, the amount I can give them is greater than what I could give before I took from them. But I bet they would rather me not take from them first just to give them back what was originally theirs.
The number of low income people in the U.S. excited about getting a "tax refund" sorta both belies and agrees with you
Mathematically, sure. But ethically? Feels hypocritical the pirates of capitalism act the wolf and only later wish to rehabilitate and hang out with the sheep.
I suggest going work on climate solutions. Every $1 of progress today will be worth $100,000 of impact within a decade. You're unlikely to capture that value personally of course, but that's not the point. Why take all the risk of needing to become a billionaire when you could have all the impact just by making hard career choices?
With what, good looks? There is no low hanging fruit in solving the climate situation. Whether the barriers are technological, economical or sociological, they will require massive resources and rabid tenacity to turn in the right direction. Resources that are much simpler to marshall with the agency that billions of dollars provide.
It's debatable, because to make that amount of money you will maybe do bad things. Or at least thing that made people unhappy.
Extreme scenario : one person makes all the people of the world work for him during his entire life. And then give his wealth when he dies.
More harm or good ?
Extreme scenario : one person makes all the people of the world work for him during his entire life. And then give his wealth when he dies.
More harm or good ?
> because to make that amount of money you will maybe do bad things.
someone making that kind of obscene wealth is almost certainly doing bad things to get it.
someone making that kind of obscene wealth is almost certainly doing bad things to get it.
In doing so, you're betting that _you_ can grow your money faster than organizations you give it to can make impact on their communities.
Helping people who need it _now_ rather than in ten years helps _them_ start contributing more effectively to their communities, or blunts negative effects of them _not_ having that help for the next ten years.
Sure, it's a bet you can make that you'll grow your money faster than it would have impact being put into the world --- but it's one that takes a certain amount of hubris.
Helping people who need it _now_ rather than in ten years helps _them_ start contributing more effectively to their communities, or blunts negative effects of them _not_ having that help for the next ten years.
Sure, it's a bet you can make that you'll grow your money faster than it would have impact being put into the world --- but it's one that takes a certain amount of hubris.
Would be interesting to model this out, time value of money, time, etc.
What does it look like for someone fresh out of college to dive into making an impact vs waiting till they're 50, a billionaire? Use climate as an example, assume the problem is getting worse at 10% a year. With climate especially there are tipping points too, i.e. maybe there's a cliff at year 49 where it gets 200% worse.
What kind of challenges lend themselves to "get rich then give"? What kind of challenges lend themselves to "dive right in"?
What does it look like for someone fresh out of college to dive into making an impact vs waiting till they're 50, a billionaire? Use climate as an example, assume the problem is getting worse at 10% a year. With climate especially there are tipping points too, i.e. maybe there's a cliff at year 49 where it gets 200% worse.
What kind of challenges lend themselves to "get rich then give"? What kind of challenges lend themselves to "dive right in"?
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The basic problem with this model is that it guides you to forever procrastinate actually doing good. Sufficiently large fortunes can be sufficiently diversified that you’re basically guaranteed to keep growing your wealth so long as you keep reinvesting it. The good you can theoretically afford to do next year will always be greater than the good you can afford to do today – which means, under this model, that the “right choice” is to never do good today. That’s why this kind of simple utilitarianist thinking is a trap.
There's a good argument to diversify giving type too - as well as diversifying investment. Give some now, give some later. That way, you get the best of both worlds - impact now and greater impact later!
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That seems to me like an overly consequentialist view of charitable giving (as is common among the "effective altruist" types). It's possible that billionaires have an obligation to give back to society as soon as possible, even if waiting to make more money would result in more total donations in the long run.
By that logic you should never give away money because your principal will never stop growing.
>To me it's not good enough to make billions and then do good. Do good every moment of every day. Make doing good your work. Or get out of the way.
Well said. I wonder whether at this day and age it's even possible for someone without any ancestral wealth to grow from nothing to such massive wealth without exploiting large number of people or environment or both in some manner? In that case doing every day good by common people is lot more valuable.
Well said. I wonder whether at this day and age it's even possible for someone without any ancestral wealth to grow from nothing to such massive wealth without exploiting large number of people or environment or both in some manner? In that case doing every day good by common people is lot more valuable.
Tax them.
World governments spend over $35 trillion annually. Much much more than her total lifetime accumulated net worth.
I don't see why letting them spend $35.05 trillion for one year will make the world a better place. I just don't see the logic there.
I don't see why letting them spend $35.05 trillion for one year will make the world a better place. I just don't see the logic there.
The top 10% own 70% of America's wealth, and corporations themselves are taxed quite low. Also, don't dismiss her wealth so easily, $60B is 75% of the annual cost to cover the tuition of every public college student, and that's from a single individual. For perspective, there are over 600 billionaires in this country.
All of the billionaires wealth in the nation wouldn't fund federal spending alone for 12 months.
> Tax them
This is an awkward story to message this on, given a greater fraction of her wealth is going to help the needy than does the U.S. government’s.
This is an awkward story to message this on, given a greater fraction of her wealth is going to help the needy than does the U.S. government’s.
Perhaps. But the people have control over that money. Deferring control to billionaires on the hope that they will grace us with their efficient money distribution is like hoping for philosopher kings.
In practice, democratic control will be more stable.
In practice, democratic control will be more stable.
Not that odd, for every Makenzie scott there 100, 1000?, billionaires that aren’t nearly as generous, who hold onto their wealth that the passes to heirs who may have been insulated from society their entire lives - Eg the climate denying Koch brothers. Taxing them is systematically putting the allocation of some of that capital back into hands of society and out of the random draw of good and bad.
> Not that odd, for every Makenzie scott there 100, 1000?, billionaires that aren’t nearly as generous, who hold onto their wealth that the passes to heirs
There are about 2750 billionaires in the world, 210 of whom have pledged to give away at least half their wealth to charitable causes, so about 12 billionaires who aren't as generous for every Makenzie Scott (assuming that billionaires can't be generous if they haven't signed the giving pledge).
There are about 2750 billionaires in the world, 210 of whom have pledged to give away at least half their wealth to charitable causes, so about 12 billionaires who aren't as generous for every Makenzie Scott (assuming that billionaires can't be generous if they haven't signed the giving pledge).
Those 2750 control the allocation how much of the capital of the entire world? Another reason we should tax them is that so few should really not be making the decisions for that much capital. That’s not even a good basis for a competitive capitalist system to run, let alone a social system that wants to maintain some baseline level of minimum fair distribution of wealth.
Even if you agree with Mackenzie Scott’s allocations, she wasn’t the direct individual who amassed the fortune (though I’m sure she contributed a lot), it’s something of serendipity that she’s in a position to be allocating her portion at all now. It really shouldn’t be this way.
Even if you agree with Mackenzie Scott’s allocations, she wasn’t the direct individual who amassed the fortune (though I’m sure she contributed a lot), it’s something of serendipity that she’s in a position to be allocating her portion at all now. It really shouldn’t be this way.
> Another reason we should tax them is that so few should really not be making the decisions for that much capital.
Now apply that same logic to the US government. If you divide the federal budget by the number of elected officials, each one controls over $7 billion of income per year. The amount of wealth they control is far higher than all the billionaires in the world combined. In addition, they create laws that are backed by the threat of violence. They also capture wealth through taxes, which if I don't pay, will cause men with guns to come to my home and put me in a cage. I didn't agree to any of this and there's no way I can opt out of it.
I'm not worried about billionaires pulling me over and putting me in handcuffs, or telling me who I'm allowed to marry, or what substances I can use in my own home. I'm not worried about billionaires taking my money to fund armies and spending decades invading random countries in the middle east. I'm definitely not worried about billionaires restricting where I can travel or what business transactions I can engage in.
If I have to choose between the government controlling more of people's resources or less, I'm picking less.
Now apply that same logic to the US government. If you divide the federal budget by the number of elected officials, each one controls over $7 billion of income per year. The amount of wealth they control is far higher than all the billionaires in the world combined. In addition, they create laws that are backed by the threat of violence. They also capture wealth through taxes, which if I don't pay, will cause men with guns to come to my home and put me in a cage. I didn't agree to any of this and there's no way I can opt out of it.
I'm not worried about billionaires pulling me over and putting me in handcuffs, or telling me who I'm allowed to marry, or what substances I can use in my own home. I'm not worried about billionaires taking my money to fund armies and spending decades invading random countries in the middle east. I'm definitely not worried about billionaires restricting where I can travel or what business transactions I can engage in.
If I have to choose between the government controlling more of people's resources or less, I'm picking less.
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So that the money would be spent on wars in Afghanistan instead?
> Interesting opportunity to rethink the model of "make billions and THEN do good by giving it back"
Well if you want to give back, you need to have something first. As heirs, Scott got money without really (deserving|working for) it. It is not really comparable to Gates and Buttet.
> To me it's not good enough to make billions and then do good
Everyone is different, some people choose to do that. It is still better than giving nothing
Well if you want to give back, you need to have something first. As heirs, Scott got money without really (deserving|working for) it. It is not really comparable to Gates and Buttet.
> To me it's not good enough to make billions and then do good
Everyone is different, some people choose to do that. It is still better than giving nothing
I believe you're being downvoted because of the "heirs" mistake. MacKenzie Scott earned her half.
Commenting on the "have something first". If you're 20 years old you have 60 years you can give. Gates is a poor man comparatively.
Commenting on the "have something first". If you're 20 years old you have 60 years you can give. Gates is a poor man comparatively.
I was comparing Scott to heirs. People who got money without being responsible for it. Of course she was the wife of Bezos but how much is she responsible for the success of Amazon compared to another wife ?
I don't get how you could do more good with 40years of life with 0 on a bank account vs 1 day of life and 60bn on bank account
I don't get how you could do more good with 40years of life with 0 on a bank account vs 1 day of life and 60bn on bank account
I don't think in this particular case its reasonable to compare her impact on Amazons success to an heir. Jeff Bezos thought quite publicly how superior she was to other potential wives in terms of her resourcefulness which was applied both directly to Amazon in early days and later to Bezos personally. The unfairness of her unearned wealth is not that different from the cofounder or early investor who steps back and retains equity but is not involved in the day to day.
She earned her half only in a narrow legal sense. No one would seriously assign more than \epsilon "real" credit for her contributions.
According to wikipedia (https://en.wikipedia.org/wiki/Amazon_(company)#History) she actually played not such a small role in founding the company.
Making money is not about deserving the money, it's about being good at getting money.
To be fair most self made billionaires don't "deserve" that amount of money as well. Yes, they have done something great amassing that fortune and worked hard. But others also work hard everyday not getting a millionth of that in return.
I applaud her, Gates, etc. for trying to do good with their fortune. But that also leaves the choice of what to do to the very few, instead of the society deciding (if the fortunes were collected as tax instead)
I applaud her, Gates, etc. for trying to do good with their fortune. But that also leaves the choice of what to do to the very few, instead of the society deciding (if the fortunes were collected as tax instead)
> To me it's not good enough to make billions and then do good. Do good every moment of every day. Make doing good your work. Or get out of the way.
Why such an absolutist stance. If I were to follow your advice in the past, I would have had less money to do good with, and my impact would be limited. But because I delayed that, I am able to give more today than before.
> I love how MacKenzie Scott is just jumping in, giving away the money, make smart choices, pull the bandaid off and get to work.
You don't know that these are smart choices. Giving money away in large sums, with little accountability, to organizations that aren't setup to spend it well, can backfire. Look at some of our government's largest spending efforts or at how cities like SF squander hundreds of millions to see what could happen. Startups are given very limited amounts of funding in investment rounds to maintain that sense of hunger and accountability through incremental investments. It is possible that McKenzie Scott's spending is that, since it is spread across such a large number of grants. But since this is the largest gift many of the recipient organizations have ever received, it remains to be seen how this will play out from an impact perspective.
Why such an absolutist stance. If I were to follow your advice in the past, I would have had less money to do good with, and my impact would be limited. But because I delayed that, I am able to give more today than before.
> I love how MacKenzie Scott is just jumping in, giving away the money, make smart choices, pull the bandaid off and get to work.
You don't know that these are smart choices. Giving money away in large sums, with little accountability, to organizations that aren't setup to spend it well, can backfire. Look at some of our government's largest spending efforts or at how cities like SF squander hundreds of millions to see what could happen. Startups are given very limited amounts of funding in investment rounds to maintain that sense of hunger and accountability through incremental investments. It is possible that McKenzie Scott's spending is that, since it is spread across such a large number of grants. But since this is the largest gift many of the recipient organizations have ever received, it remains to be seen how this will play out from an impact perspective.
It heavily depends on how you made that money though, doesn't it? Sure, she can spend billions to e.g. solve the problem that Amazon workers have to pee into bottles to not get fired. But without Amazon, those workers wouldn't have that problem in the first place and wouldn't need saving from the conditions she put them in.
It heavily depends on how you model the growth of challenges vs your own personal growth. You're assuming that your own personal wealth grows faster than the problem grew. That is not necessarily true. i.e. climate change won't wait around till you're a billionaire.
Agreed. This is impressive in how fast she has ramped up. I’d guess she’s also ok with not every dollar being 100% effective (ok with failures) as a trade off for speed of execution.
Part of the flaw with assuming people who are really good at one thing are good at other things applies to philanthropy. Is Bill Gates a good philanthropist? Zuckerberg? What if they're abysmal at it but we don't have anybody to compare to?
It’s easy to give away money you didn’t do anything to earn. I’m all for it however, society needs all the help it can get and I love the places she’s giving money to.
> It’s easy to give away money you didn’t do anything to earn.
what are you talking about? you think she didn't do anything for the success of amazon? hell she was married to bezos before amazon even started up. What part of that money doesn't she deserve?
> In 1993, Scott and Bezos were married, and in 1994, they both left D. E. Shaw, moved to Seattle, and started Amazon. Scott was one of Amazon's first employees, and was heavily involved in Amazon's early days, working on the company's name, business plan, accounts and shipping early orders.[4][9] She also negotiated the company's first freight contract.[9] When Amazon began to succeed,[when?] Scott took a less involved role in the business, preferring to focus on her family and literary career.
what are you talking about? you think she didn't do anything for the success of amazon? hell she was married to bezos before amazon even started up. What part of that money doesn't she deserve?
> In 1993, Scott and Bezos were married, and in 1994, they both left D. E. Shaw, moved to Seattle, and started Amazon. Scott was one of Amazon's first employees, and was heavily involved in Amazon's early days, working on the company's name, business plan, accounts and shipping early orders.[4][9] She also negotiated the company's first freight contract.[9] When Amazon began to succeed,[when?] Scott took a less involved role in the business, preferring to focus on her family and literary career.
What is her criterion for what to spend it on, does she state it publicly?
For others who want to know more about MacKenzie Scott (from Wikipedia [0]):
""" MacKenzie Scott (... formerly Bezos; April 7, 1970) is an American billionaire businesswoman, novelist, and philanthropist. As of May 29, 2021, she has a net worth of US$57.0 billion, owing to a 4% stake in Amazon, after her divorce from Amazon founder and former Chief Executive Jeff Bezos. As such, Scott is the third-wealthiest woman in the United States, and the 21st-wealthiest individual in the world. She is known for her involvement in the founding and development of Amazon, as well as her now dissolved marriage to Bezos. """
""" In 2020, she made US$5.8 billion in charitable gifts, one of the largest annual distributions by a private individual to working charities. Scott donated a further $2.7 billion in 2021. """
[0] https://en.wikipedia.org/wiki/MacKenzie_Scott
""" MacKenzie Scott (... formerly Bezos; April 7, 1970) is an American billionaire businesswoman, novelist, and philanthropist. As of May 29, 2021, she has a net worth of US$57.0 billion, owing to a 4% stake in Amazon, after her divorce from Amazon founder and former Chief Executive Jeff Bezos. As such, Scott is the third-wealthiest woman in the United States, and the 21st-wealthiest individual in the world. She is known for her involvement in the founding and development of Amazon, as well as her now dissolved marriage to Bezos. """
""" In 2020, she made US$5.8 billion in charitable gifts, one of the largest annual distributions by a private individual to working charities. Scott donated a further $2.7 billion in 2021. """
[0] https://en.wikipedia.org/wiki/MacKenzie_Scott
The title is a bit clickbaity, but it's clear that she's turning on a firehose of donated cash with little public insight (as is her right!).
It is really the extra resources of all those non-profits that will be "reshaping" their communities. We'll have to wait and see in a few years what the effects are.
It is really the extra resources of all those non-profits that will be "reshaping" their communities. We'll have to wait and see in a few years what the effects are.
The portion that goes to reshaping the communities rather than enriching the administrators and their friends is a very open question too.
Ah, the principal agent problem rears its head again!
Yup. I prefer to believe most schools and non-profits aren't run by folks hoping to enrich themselves (at least not monetarily). But there's also the question of how to deal with such a windfall.
People ( https://www.the-sun.com/news/3031887/national-lottery-euromi... ) and corporations ( plenty of folks misallocate VC funding ) are bad at dealing with windfalls, how could it not be a difficulty for non-profits?
Yup. I prefer to believe most schools and non-profits aren't run by folks hoping to enrich themselves (at least not monetarily). But there's also the question of how to deal with such a windfall.
People ( https://www.the-sun.com/news/3031887/national-lottery-euromi... ) and corporations ( plenty of folks misallocate VC funding ) are bad at dealing with windfalls, how could it not be a difficulty for non-profits?
Her giving seems a bit reactionary, just throwing money at whatever the issue of the month is. With her kind of wealth she could reshape a few areas entirely for the better, rather than just jumping in and throwing 100s of millions at what is trending. It almost feels like the way a regular wealthy person would donate, but her contributions are 10,000X so they should probably be handled differently. Either way it is way better than sitting on the 60b.
She might get burned on such a yolo-giving, $8B per year is quite a lot. George Soros talked a lot about how hard it is to give money, how it corrupts both parties (both the donor and the grantee). Gates tried hard to eradicate polio, and failed at that, now he's an anti-vax meme.
This will irk a lot of people here, but frankly the government is a pretty good nonprofit, as far as nonprofits go.
This will irk a lot of people here, but frankly the government is a pretty good nonprofit, as far as nonprofits go.
> Gates tried hard to eradicate polio, and failed at that, now he's an anti-vax meme.
I'm not particularly well informed here, but my impression was that the gates foundation has been a relatively successful organization in terms of improving living conditions on a variety of issues. Saying he's an anti-vax meme is irrelevant.
I'm not particularly well informed here, but my impression was that the gates foundation has been a relatively successful organization in terms of improving living conditions on a variety of issues. Saying he's an anti-vax meme is irrelevant.
My read was "he went big, he failed to achieve the goal, that's now used among other bases to smear him."
The relevance is that the failure provided fuel to his critics (and a global genocidal disinformation campaign.)
The relevance is that the failure provided fuel to his critics (and a global genocidal disinformation campaign.)
Failed to achieve the goal... you do know that Afghanistan has polio... At some point there's only so much you can do despite even having the US army there.
Yes.
Your point?
Your point?
But he achieved many things. That's just one particularly ambitious goal.
I agree.
My point isn't that the failure invalidates Gates's approach or attempts. If you succeed at everything you try, you're not taking any risks.
My point is that the failure has become fuel for critics, who would quite likely find any possible basis to make such criticisms.
(I'm not uncritical of Gates myself, nor do I consider myself a fan. He ran a highly successful business unethically and illegally. He's been a major philanthropist. His campaigns have a mixed record (see comment re: risks above), with some successes and some failures. The policies he pursues are often self-serving, especially regarding software and intellectual property rights.)
My point isn't that the failure invalidates Gates's approach or attempts. If you succeed at everything you try, you're not taking any risks.
My point is that the failure has become fuel for critics, who would quite likely find any possible basis to make such criticisms.
(I'm not uncritical of Gates myself, nor do I consider myself a fan. He ran a highly successful business unethically and illegally. He's been a major philanthropist. His campaigns have a mixed record (see comment re: risks above), with some successes and some failures. The policies he pursues are often self-serving, especially regarding software and intellectual property rights.)
That money can only be more useful than it was. It seems that she is determined to put it to good use now.
> George Soros talked a lot about how hard it is to give money, how it corrupts both parties (both the donor and the grantee)
Did he talk about the specific how / underlying dynamics, and what if anything could be done about it?
Where would I find that conversation?
Did he talk about the specific how / underlying dynamics, and what if anything could be done about it?
Where would I find that conversation?
Not OP.
Soros writes extensively. I've not found a specific comment matching the description above, though this essay discusses his philanthropic activities, goals, and strategies at length:
https://www.georgesoros.com/2011/06/22/my_philanthropy/
DDG: "george soros" philanthropy difficulty
Tuning keywords might turn up something more relevant, though there's a lot of crud to wade through.
Soros writes extensively. I've not found a specific comment matching the description above, though this essay discusses his philanthropic activities, goals, and strategies at length:
https://www.georgesoros.com/2011/06/22/my_philanthropy/
DDG: "george soros" philanthropy difficulty
Tuning keywords might turn up something more relevant, though there's a lot of crud to wade through.
Thanks. That essay is really interesting and I haven't seen it on HN before.
That is a good essay. And yeah Soros wrote quite a bit, his writing is very good though seems convoluted/chaotic at times.
The quote about "corruption" was from some interview with him, I'll link it if I find it, though you know how hard it is to search videos like that.
Also, this provides a stark comparison to Mackenzie's style of giving: Over thirty years I have contributed more than $8 billion to the worldwide network of Open Society Foundations. It tool Soros 30 years to give $8B, while she did it in 1 year.
The quote about "corruption" was from some interview with him, I'll link it if I find it, though you know how hard it is to search videos like that.
Also, this provides a stark comparison to Mackenzie's style of giving: Over thirty years I have contributed more than $8 billion to the worldwide network of Open Society Foundations. It tool Soros 30 years to give $8B, while she did it in 1 year.
The New Yorker touches on this:
Over the years, starting with his experience in wartime Hungary, he had developed all the instincts of an outsider; he was distrustful of government, disdainful of the establishment, allergic to institutions generally. Traditional foundations did not escape his contempt. He saw them as too bureaucratic to respond in a timely way to real need; laden with overhead, which benefitted the givers instead of the recipients; and inherently corrupting, almost demanding to be exploited. (“They go against human nature,” Soros says, “which is to take and not to give.”) This last point was particularly nettlesome for him, inasmuch as he is a singularly untrusting person, intent on not allowing others to take advantage of him.
https://www.newyorker.com/magazine/1995/01/23/the-world-acco...
I don't find the "human nature" quote referenced elsewhere.
Over the years, starting with his experience in wartime Hungary, he had developed all the instincts of an outsider; he was distrustful of government, disdainful of the establishment, allergic to institutions generally. Traditional foundations did not escape his contempt. He saw them as too bureaucratic to respond in a timely way to real need; laden with overhead, which benefitted the givers instead of the recipients; and inherently corrupting, almost demanding to be exploited. (“They go against human nature,” Soros says, “which is to take and not to give.”) This last point was particularly nettlesome for him, inasmuch as he is a singularly untrusting person, intent on not allowing others to take advantage of him.
https://www.newyorker.com/magazine/1995/01/23/the-world-acco...
I don't find the "human nature" quote referenced elsewhere.
It's unclear at this point how effective is her style of giving. But it seems like she is aware of the potential of corruption, and by moving nimbly and only giving one-time donations, it might help reduce the patron-charity dynamic.
As for other billionaires failing their ambitious goals, I think that is normal, because their goals are more ambitious than their massive fortune. To put things in perspective, US government spends trillions of dollars a year, and the country still has many problems.
As for other billionaires failing their ambitious goals, I think that is normal, because their goals are more ambitious than their massive fortune. To put things in perspective, US government spends trillions of dollars a year, and the country still has many problems.
I don’t think she particularly cares about measuring the effectiveness of her altruism.
> “What do we think they might do with more cash on hand than they expected?” Scott asked in her June blog post. “Hire a few extra team members they know they can pay for the next five years. Buy chairs for them. Stop having to work every weekend. Get some sleep.”
My wild ass guess is that she’s hoping her firehose of money will do more good in a shorter amount of time versus spending a lot of time fine tuning the giving.
I think a lot of billionaire philanthropists see their giving as almost like a kind of investment, and some of them want to see a return on that investment that is above the average return from the average non-billionaire giver. That in turn causes the recipient to spend at least some time thinking about how to make that billionaire feel like they got a good return.
It sounds like McKenzie-Scott’s idea of giving is more hands off, identifying teams that had a history of doing good work, and giving them both resources and mental space to execute.
Something for effective altruists to consider.
> “What do we think they might do with more cash on hand than they expected?” Scott asked in her June blog post. “Hire a few extra team members they know they can pay for the next five years. Buy chairs for them. Stop having to work every weekend. Get some sleep.”
My wild ass guess is that she’s hoping her firehose of money will do more good in a shorter amount of time versus spending a lot of time fine tuning the giving.
I think a lot of billionaire philanthropists see their giving as almost like a kind of investment, and some of them want to see a return on that investment that is above the average return from the average non-billionaire giver. That in turn causes the recipient to spend at least some time thinking about how to make that billionaire feel like they got a good return.
It sounds like McKenzie-Scott’s idea of giving is more hands off, identifying teams that had a history of doing good work, and giving them both resources and mental space to execute.
Something for effective altruists to consider.
> It sounds like McKenzie-Scott’s idea of giving is more hands off, identifying teams that had a history of doing good work, and giving them both resources and mental space to execute.
I think there's something to be said for this. It's clear none of those people were in it for the money, the prestige, and are passionate enough about that they would risk their health for an unknown gain (its often very hard to measure whether or not your one night of sleeping less actually made the world better). Receiving a one-time donation of someone of MacKenzie's stature not only gives them breathing room but also puts them on the map as a charity a billionaire "invested" into.
I think there's something to be said for this. It's clear none of those people were in it for the money, the prestige, and are passionate enough about that they would risk their health for an unknown gain (its often very hard to measure whether or not your one night of sleeping less actually made the world better). Receiving a one-time donation of someone of MacKenzie's stature not only gives them breathing room but also puts them on the map as a charity a billionaire "invested" into.
Classically sensational title for article which omits the biggest problem with donation like these (which are admirable, nevertheless) is how this money [sadly] often end up being "managed" by people in charge.
Yep and this thread is full of people attacking the whole idea as being a poor use of that money. She should definitely be building more rockets, not helping people, that's dangerous.
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I've been wondering if she does in-kind donations, so that she can donate shares instead of selling the shares first to donate cash.
From my dabblings in the non profit space, I'm finding many are unprepared to accept anything aside from cash.
There are also major tax advantages for doing so, since you can avoid the long term capital gains tax while also getting a charitable tax deduction for the full value of the shares donated. That's probably my favorite tax code to be honest.
From my dabblings in the non profit space, I'm finding many are unprepared to accept anything aside from cash.
There are also major tax advantages for doing so, since you can avoid the long term capital gains tax while also getting a charitable tax deduction for the full value of the shares donated. That's probably my favorite tax code to be honest.
FWIW: Buffett is donating shares. Also, he sometimes talks about an interesting problem where the non-profit may not be allowed to hold shares of companies in certain industries (ex: insurance), and of course Berkshire is involved in almost every industry, certainly in insurance big time.
so they just sell immediately and its no problem? or does momentarily holding it tarnish their reputation or whatever since filings from donors can be public.
Any reasonable non-profit will accept stock, and every non profit I've been involved with liquidates them immediately and uses the money. Generally, a mission-driven org needs money, not a well-balanced stock portfolio.
It's quite a hit to their ``ratings'' as well, if they keep large un-spent sums of money around. Just imagine the clickbait article showing a non-profit hoarding stock instead of helping children in need. Those that do are rightfully derided so much that honest non-profits that are just trying to build their own infrastructure with self-directed spending are caught in the crossfire for not investing in ``programs'' enough.
It's quite a hit to their ``ratings'' as well, if they keep large un-spent sums of money around. Just imagine the clickbait article showing a non-profit hoarding stock instead of helping children in need. Those that do are rightfully derided so much that honest non-profits that are just trying to build their own infrastructure with self-directed spending are caught in the crossfire for not investing in ``programs'' enough.
Rightfully? I mean the goal is a non-profit is to help with a specific problem in one way or another.
Often long term goals are involved, so I don’t see any problem with holding appreciating assets so the power and influence of the organization can be maintained into the future.
Of course using non-profits for investing shell games is probably a whole different problem I am not familiar with. But holding assets as a whole doesn’t seem like a big issue to me.
Often long term goals are involved, so I don’t see any problem with holding appreciating assets so the power and influence of the organization can be maintained into the future.
Of course using non-profits for investing shell games is probably a whole different problem I am not familiar with. But holding assets as a whole doesn’t seem like a big issue to me.
I believe it is right to provide recommendations against non-profits that hold significant assets in investments. I don't think it should be illegal or anything, but I do think that potential donors should be cautioned about this. Most people have the expectation that they are donating to fix a problem or keep an organization running, not increase the returns on investments. If a non-profit has a long-term strategy, that should probably involve setting up _other_ institutions that can self-sustain, rather than "We'll get rich first".
The _problem_ is that this translates to some expectation that every dollar given should go immediately to purchasing something, and that somehow it's "more effective" for a person to go purchase things than to donate to, say, red cross. That's dead, dead wrong. Give money, let them invest in solutions.
However, from the donor's perspective, donating stock, and other valuable stuff, is a good tax dodge. You don't have to pay capital gains taxes and then send money to the org. So usually the org is happy to accept these gifts, but yes, they'll sell them.
The _problem_ is that this translates to some expectation that every dollar given should go immediately to purchasing something, and that somehow it's "more effective" for a person to go purchase things than to donate to, say, red cross. That's dead, dead wrong. Give money, let them invest in solutions.
However, from the donor's perspective, donating stock, and other valuable stuff, is a good tax dodge. You don't have to pay capital gains taxes and then send money to the org. So usually the org is happy to accept these gifts, but yes, they'll sell them.
yeah that's probably true, I guess the reality is that I wasn't looking at ones accepting stock, but physical art and crypto. Some do and that number is growing by orders of magnitude each year because its now the 2020s, but many think it's still the year 1997. It is surprising how low tech that entire sector is.
It seems to be a recurring story for new entrants to the non profit space to be the "tech savvy one doing things differently", because the whole space is, I guess, not market driven as it isn't motivated by being technologically aware. Only getting a few recurring donors and doing their mission.
It seems to be a recurring story for new entrants to the non profit space to be the "tech savvy one doing things differently", because the whole space is, I guess, not market driven as it isn't motivated by being technologically aware. Only getting a few recurring donors and doing their mission.
In each case, it is liquidated and used as cache. Some of the skill of the best philanthropy folks is in finding ways to offload these wonky donations that donors think are useful.
However, from the donor's perspective, donating stock, and other valuable stuff, is a good tax dodge. You don't have to pay capital gains taxes and then send money to the org. So usually the org is happy to accept these gifts, but yes, they'll sell them.
However, from the donor's perspective, donating stock, and other valuable stuff, is a good tax dodge. You don't have to pay capital gains taxes and then send money to the org. So usually the org is happy to accept these gifts, but yes, they'll sell them.
> From my dabblings in the non profit space, I'm finding many are unprepared to accept anything aside from cash.
If you’re donating huge amounts of money, you have lawyers to help those companies figure it out.
If you’re a small-time donor, trying to saddle a tiny non-profit with all of the extra hassle and legwork of accepting appreciated shares just so they can take your one-off donation is counter-productive (unless they're already set up for this, obviously). They might end up spending more time and money figuring out how to deal with your single donation than they would gain from accepting it, which is why they don’t bother.
The solution is easy, though: Set up a “Donor Advised Fund” through any number of major brokerages. They will handle the liquidation of your shares and mail a check to the charities you choose. Couldn’t be easier for both you and the charity.
If you’re donating huge amounts of money, you have lawyers to help those companies figure it out.
If you’re a small-time donor, trying to saddle a tiny non-profit with all of the extra hassle and legwork of accepting appreciated shares just so they can take your one-off donation is counter-productive (unless they're already set up for this, obviously). They might end up spending more time and money figuring out how to deal with your single donation than they would gain from accepting it, which is why they don’t bother.
The solution is easy, though: Set up a “Donor Advised Fund” through any number of major brokerages. They will handle the liquidation of your shares and mail a check to the charities you choose. Couldn’t be easier for both you and the charity.
> all of the extra hassle and legwork of accepting appreciated shares just so they can take your one-off donation is counter-productive
going to etrade.com and opening an account, followed up by mailing proof of being a nonprofit? It's as easy as that, I ask charities to do it all the time.
going to etrade.com and opening an account, followed up by mailing proof of being a nonprofit? It's as easy as that, I ask charities to do it all the time.
Here's a tip that pretty much every philanthropist out there knows, but would probably be helpful to the HN crowd. If you donate appreciated stock, you get a "double" tax break, since you don't pay capital gains tax and you also can deduct the donation amount.
For example, you have $1000 of tesla shares that you bought for $100 a few years ago. You want to donate some money to charity now. If you sold those shares and put them in your bank account and then donate cash, you'd owe capital gains tax (15 or 20% depending on tax bracket) on the $900 gain. So if you donated all of your Amazon stock that way, you would give a donation of $1000 - (900 x 0.15) = $865 and you can take an $865 tax deduction if you itemize.
Alternatively, you can donate $1000 of appreciated tesla shares directly to a charity. Now, you don't owe capital gains, AND you can take a $1000 tax deduction. Double win.
Rich people who give to charity are well aware of this loophole. For them, it pretty much never makes sense to donate cash if they have appreciated assets they can give instead (at the very least you might as well donate the stock and then buy it back later at a higher cost basis, although I think there might be rules about buying the exact stock again within 30 days). And in my experience, most charities are happy to take stock for this reason... because their major donors only want to give stock, so they already have the infrastructure in place for accepting it.*
For example, you have $1000 of tesla shares that you bought for $100 a few years ago. You want to donate some money to charity now. If you sold those shares and put them in your bank account and then donate cash, you'd owe capital gains tax (15 or 20% depending on tax bracket) on the $900 gain. So if you donated all of your Amazon stock that way, you would give a donation of $1000 - (900 x 0.15) = $865 and you can take an $865 tax deduction if you itemize.
Alternatively, you can donate $1000 of appreciated tesla shares directly to a charity. Now, you don't owe capital gains, AND you can take a $1000 tax deduction. Double win.
Rich people who give to charity are well aware of this loophole. For them, it pretty much never makes sense to donate cash if they have appreciated assets they can give instead (at the very least you might as well donate the stock and then buy it back later at a higher cost basis, although I think there might be rules about buying the exact stock again within 30 days). And in my experience, most charities are happy to take stock for this reason... because their major donors only want to give stock, so they already have the infrastructure in place for accepting it.*
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That’s literally what i wrote in 1000 less words
“Single handedly reshaping America” is an extraordinary claim!
I live in the middle of nowhere and my best friends live in places like New Orleans, Juneau, San Francisco, Portland, New York, rural Colorado, Mississippi and Florida etc. basically, all over the place and nobody I know has been in any way impacted by any of these charities, and certainly haven’t been impacted by this gifting spree.
Furthermore, none of my friends know anybody who has benefited from these “money bombs.”
I don’t mean to sound cynical, but it doesn’t really seem like “giving” when you’re purchasing some of the most blatantly glowing sycophantic PR imaginable. Seriously, what is the actual purpose of this article? Why was it written? It’s “news” that Bloomberg thinks it’s important that I like this person?
I live in the middle of nowhere and my best friends live in places like New Orleans, Juneau, San Francisco, Portland, New York, rural Colorado, Mississippi and Florida etc. basically, all over the place and nobody I know has been in any way impacted by any of these charities, and certainly haven’t been impacted by this gifting spree.
Furthermore, none of my friends know anybody who has benefited from these “money bombs.”
I don’t mean to sound cynical, but it doesn’t really seem like “giving” when you’re purchasing some of the most blatantly glowing sycophantic PR imaginable. Seriously, what is the actual purpose of this article? Why was it written? It’s “news” that Bloomberg thinks it’s important that I like this person?
You've clearly got some sort of axe to grind, but I suggest you take it somewhere else. We can debate whether this is the best use of the money or merely a good use of the money, but I'm amazed you've somehow managed to frame it as a bad thing.
My issue is that the phrase “single handedly reshaping America” is in my opinion highly hyperbolic. I find it to be so hyperbolic that I find myself questioning the intent of the author.
If you personally agree with the headline, I apologize for being flippant about this issue, we’ll just have to agree to disagree. It’s also possible, I suppose, that I’m not the one with the axe to grind though. Anything is possible!
Edit: To clarify, yes I think this is completely bad and I do not think any of this is in any way a laudable act. If Bezos had paid taxes, his ex wife wouldn’t have this amount of power! This is an awful example of the worst parts of American excess. I am aware that this is an unpopular opinion on this site.
If you personally agree with the headline, I apologize for being flippant about this issue, we’ll just have to agree to disagree. It’s also possible, I suppose, that I’m not the one with the axe to grind though. Anything is possible!
Edit: To clarify, yes I think this is completely bad and I do not think any of this is in any way a laudable act. If Bezos had paid taxes, his ex wife wouldn’t have this amount of power! This is an awful example of the worst parts of American excess. I am aware that this is an unpopular opinion on this site.
> almost $8.6 billion in gifts announced in just 12 months
Give it some time
Give it some time
> when you’re purchasing some of the most blatantly glowing sycophantic PR imaginable
Huh? Is there any reason to think MacKenzie purchased this article? It discusses how MacKenzie is incredibly tight lipped and low profile with her contributions. She’s not interviewed in it. Bloomberg had to do a mass survey to just identity the places she donated to and they still weren’t able to get dollar contribution amounts from many organizations. You’d think if she was promoting herself she’d hand them a list.
IMHO, the article exists because a billionaire donating $4B+ in 12 months is newsworthy in itself.
Agreed on the click-bait “reshaping America” title though.
Huh? Is there any reason to think MacKenzie purchased this article? It discusses how MacKenzie is incredibly tight lipped and low profile with her contributions. She’s not interviewed in it. Bloomberg had to do a mass survey to just identity the places she donated to and they still weren’t able to get dollar contribution amounts from many organizations. You’d think if she was promoting herself she’d hand them a list.
IMHO, the article exists because a billionaire donating $4B+ in 12 months is newsworthy in itself.
Agreed on the click-bait “reshaping America” title though.
> You’d think if she was promoting herself she’d hand them a list.
Based on the headline and content of the article, that’s clearly not true.
I suppose it’s just a coincidence that a gushing love letter to a billionaire just showed up in Bloomberg. Maybe it’s actually newsworthy that I should personally like this obscenely rich person.
Based on the headline and content of the article, that’s clearly not true.
I suppose it’s just a coincidence that a gushing love letter to a billionaire just showed up in Bloomberg. Maybe it’s actually newsworthy that I should personally like this obscenely rich person.
The Vermont Food Bank, an organization I support and know well, received $9 million.
“John Sayles, CEO of the Vermont Foodbank said he received an email on Dec. 3 from a philanthropic adviser who said their client was interested in making a donation. Shortly thereafter, Sayles learned who was making the donation and how much it was for.
“And then I just spent about a day in shock,” Sayles said.
The gift is “exponentially” bigger than any other the nonprofit has received, Sayles said. The amount is the equivalent of the organization’s annual operating budget.”
https://vtdigger.org/2020/12/18/billionaire-mackenzie-scott-...
“John Sayles, CEO of the Vermont Foodbank said he received an email on Dec. 3 from a philanthropic adviser who said their client was interested in making a donation. Shortly thereafter, Sayles learned who was making the donation and how much it was for.
“And then I just spent about a day in shock,” Sayles said.
The gift is “exponentially” bigger than any other the nonprofit has received, Sayles said. The amount is the equivalent of the organization’s annual operating budget.”
https://vtdigger.org/2020/12/18/billionaire-mackenzie-scott-...
anti paywall version: https://web.archive.org/web/20210812181534/https://www.bloom...
I enjoyed this Slate Star Codex article on billionaire philanthropy https://slatestarcodex.com/2019/07/29/against-against-billio...
and it could happen every year if unicorns were not dodging their taxes
Nah. The budget impact of taxing MacKenzie Scott $8B per year would be basically imperceptible. Not only would it decidedly not fund any new spending, it would only reduce the 2021 budget deficit (a cool 3 TRILLION dollars) by 0.2%! Even in pre-covid times (2019), 8 $8B in new revenue would've reduced the annual deficit by a mere 0.8%. Sure, if you taxed all of them at a similar rate, you'd tackle a bigger chunk of the deficit, but you couldn't even balance the budget. And you'd bleed them all dry within a decade or two (far more quickly than these fortunes are made), at which point your revenue problem would return with a vengeance.
The ultra rich have unfathomable amounts of money, sure, but the only way to sustainably fund a large welfare state--as is evidenced by the tax policies of every Western European nation--is to tax the absolute shit out of the middle class. Keep that in mind the next time someone says they're going to fund trillions in new annual spending by 'taxing the rich'... They may keep their promise, but when the golden goose is dead, they'll be knocking on your door!
The ultra rich have unfathomable amounts of money, sure, but the only way to sustainably fund a large welfare state--as is evidenced by the tax policies of every Western European nation--is to tax the absolute shit out of the middle class. Keep that in mind the next time someone says they're going to fund trillions in new annual spending by 'taxing the rich'... They may keep their promise, but when the golden goose is dead, they'll be knocking on your door!
The thing is if you count what your employer pays for health insurance as a tax (because that would be a tax in say, Canada) you'll find that many Californians already pay more tax than Canadians.
So we already tax the middle class, just opaquely, and without the benefit of healthcare not being tied to work (which would enable more entrepreneurism).
So we already tax the middle class, just opaquely, and without the benefit of healthcare not being tied to work (which would enable more entrepreneurism).
So, uh, I could use a patron. Would be totally fine with $120k a year CAD, no strings attached. Will work on personal software agents, AGI, bio lab automation, and try for breakthrough anti-aging or regenerative medicine.
Formerly know as MacKenzie Bezos.
Also, interesting that $1.2bn (27%) of the money went to ”Philanthropy & Grantmaking Infrastructure”… sounds like a bit of a Ponzi scheme? I really can’t imagine that was the best use for that money…
Also, interesting that $1.2bn (27%) of the money went to ”Philanthropy & Grantmaking Infrastructure”… sounds like a bit of a Ponzi scheme? I really can’t imagine that was the best use for that money…
if twenty-seven percent is the going rate, then OK! I assert that the puffery and self-dealing circles in the finance world are the rule not the exception, and would enrage most any outsider. What you are pointing out is mild in comparison IMHO
That's a bad title for the category. It's more like other metafunds and foundations. Included are givedirectly, United way, and various community investment organizations.
I don't think "Philanthropy & Grantmaking Infrastructure" means what you think it means.
There's a breakdown of which non-profits that includes, including the United Way and other non-profits.
There's a breakdown of which non-profits that includes, including the United Way and other non-profits.
I’m guessing lots of people don’t know how most non-profits operate but requesting grants from United Way is usually at least 10-30% of their budget
I love how MacKenzie Scott is just jumping in, giving away the money, make smart choices, pull the bandaid off and get to work. At this pace she'll give away all $60B in 7.5 years, assuming she doesn't speed up. I bet she's aiming for 2 years for 99%, so ~$52B next year. She's not trying to spend the rest of her life as a philanthropist, live beyond the grave, supplement government/tax failings, or have hospitals in her name.
To me it's not good enough to make billions and then do good. Do good every moment of every day. Make doing good your work. Or get out of the way.