The right way to give away a fortune
MacKenzie Scott has donated $8.6 billion to charities in the last 18 months. But some question her approach. Learning the best way to do it could set a valuable example.
Pledging to give a fortune to charity should be seen as a noble endeavor. MacKenzie Scott wants to give away her entire wealth, estimated at $60 billion or so, as quickly as possible.
Problems can arise when a mega-giver gets into the weeds of actually doing it. Like everyone else, wealthy people must make
difficult decisions about which charities to support and why. But their choices can have outsize effects on the financial health of the organizations they support as well as influence how other potential donors view those organizations.
Ms. Scott received a large chunk of Amazon stock as part of her divorce from Amazon founder Jeff Bezos. In the last 18 months or so, she’s given away a remarkable $8.6 billion to a variety of charities.
She’s become one of the most generous billionaire philanthropists in history. She’s also signed the Giving Pledge, in which the ultrarich promise to give away most or all of their fortunes during their lifetimes. That group recently grew to 231 of the wealthiest people around the world.
Now her sudden emergence at or near the top of that list has raised questions about how philanthropy (Ms. Scott prefers to call it simply “giving”) should be done. Instead of setting up an official organization to oversee her gifts, such as the Bill and Melinda Gates Foundation, she relies on an anonymous group of advisers.
Charities learn that they have received their unexpected windfall (sometimes the largest gift they’ve ever received) in a simple phone call. Spend the money any way you think best, they are told. No strings. No demands. We trust you.
Early on, Ms. Scott had been disclosing the recipients of her giving. But in a recent blog post, she announced she would no longer do that out of concern that it drew unnecessary attention to her, rather than the charities. She’d leave them to make their own announcements.
To her, it probably felt like a self-effacing move – perhaps showing modesty about giving away money she’d not earned herself.
But many who follow the world of big-time philanthropy have been troubled. Because Ms. Scott has set up no foundation, she’s not required by law to disclose her giving.
What is lost, these critics say, is the kind of transparency and accountability needed to assess what big donors are doing. Her high profile makes her a model for others.
Some donors might be interested in keeping their giving private but “without her noble intent,” Benjamin Soskis, who studies the history of philanthropy at the Urban Institute in Washington, told MarketWatch. Donations are tax deductible and thus of legitimate interest to other taxpayers. Like judges or lawmakers, critics say, mega-donors should explain why they made the decisions they made.
In a subsequent blog post Ms. Scott seemed to have heard her critics, saying she never intended to maintain a policy of total secrecy. She said she’d post updates about her giving in the coming year, along with a searchable database of the grants she has made. “My commitment to sharing information about my own giving has never wavered,” she wrote.
Ms. Scott’s apparent willingness to listen and grow as she learns how to best distribute her fortune can only increase the likelihood that those dollars will do the most possible good.