Jeff Bezos finally said he plans to give away the “majority” of his $122 billion fortune during his lifetime.
The announcement, in an interview with CNN released on Monday, came after years of Bezos facing questions and criticism over his relative lack of philanthropic donations, especially compared to fellow high profile billionaires like Bill Gates, Warren Buffett and, more recently, Bezos’ ex-wife, MacKenzie Scott.
“To the extent that he has a lot of money, it’s a big deal,” Benjamin Soskis, a senior research associate at the Urban Institute’s Center on Nonprofits and Philanthropy, tells CNBC Make It.
Soskis points out that Bezos’ announcement still leaves a lot of questions unanswered.
The billionaire and Amazon founder did not offer many specifics on how he plans to divvy up his massive wealth or which issues and charitable causes he might favor over others. If anything, Bezos admitted that he’s still working out the details — and he implied that he wants to ensure he can get bang for his buck.
“The hard part is figuring out how to do it in a levered way,” Bezos told CNN.
The sheer magnitude of the billionaire’s wealth and influence means that, however he plans to deploy his considerable assets, Bezos has the potential to have a major impact on the world, Soskis says.
“There’s still a lot we don’t know,” Soskis says. “But, if he is going to make good on his pledge, he is almost definitely going to be one of the major philanthropists of the first half of the 21st century.”
Bezos had ‘resisted developing a public philanthropic identity’
Why is the 58-year-old Bezos just now committing to giving away the bulk of his fortune? Soskis points out that he was likely feeling growing public pressure to join the trend of wealthy individuals pledging to give back at a large scale.
For years, Soskis says, Bezos “resisted developing a public philanthropic identity,” a position that the researcher believes had “become increasingly untenable” amid public criticism of Bezos’ massive wealth.
The world’s fourth-richest person, according to Bloomberg’s Billionaires Index, Bezos’ name has been notably absent from the Giving Pledge, which 230 people have signed since 2010 as a pledge to donate the majority of their fortunes to charity in their lifetimes.
Gates and Buffett are the founders of the Giving Pledge. Others like Elon Musk and Mark Zuckerberg have signed it over the past decade.
Bezos made an interesting comparison in the interview, likening the hard work of building Amazon into a trillion-dollar company to the process of figuring out the most effective ways to donate the massive wealth he’s accumulated as a result of Amazon’s success.
“It’s not easy. Building Amazon was not easy. It took a lot of hard work, a bunch of very smart teammates, hard-working teammates, and I’m finding … that charity, philanthropy, is very similar,” Bezos told CNN.
The analogy could be seen as an attempt to explain why Bezos has waited to announce his philanthropic plans, and why those plans still remain somewhat vague. But Bezos’ statement actually covers well-worn territory, Soskis says, which he refers to in his research as the “difficulty of giving” trope. Billionaires dating all the way back to Gilded Age tycoons like Andrew Carnegie and John D. Rockefeller publicly insisted that the work of giving away their wealth was as difficult as accumulating the wealth in the first place.
When wealthy individuals talk about philanthropy in such a way, Soskis argues, it’s usually been an attempt to “justify the enormous wealth that’s accumulating in the hands of a few people.”
“The idea that philanthropy is hard, and it’s this vocation that really isn’t just writing checks, but takes engagement and discipline, is a way to really legitimize that status [of enormous wealth],” Soskis says.
How Mackenzie Scott’s giving may have moved the needle
MacKenzie Scott signed the Giving Pledge after her divorce from Bezos in 2019, and she’s reportedly donated more than $14 billion to charity since then.
“Even before his relationship with MacKenzie Scott dissolved, the pressure on him to craft an identity as a philanthropist in a public sense became more intense,” Soskis says.
It’s possible to speculate that Scott’s very public and prolific philanthropic efforts have ramped up the pressure on Bezos to increase his own giving. But, Soskis says, Scott has become incredibly influential in a short amount of time in the world of philanthropy. It would be hard for Bezos, or any wealthy individual, not to be inspired, or perhaps shamed, by his ex-wife’s example.
“MacKenzie Scott is the most exemplary philanthropist in the country now,” Soskis says. “She has developed a model which is incredibly powerful and has gained more acclaim than any major mega donor.”
Where Bezos’ billions may go: Climate change, other ‘profound’ problems
Forbes estimates that Bezos has donated more than $2.4 billion to charity in his lifetime. He committed a total of $10 billion to his own climate nonprofit, the Bezos Earth Fund, in 2020. As of November 2021, the fund had granted nearly $1 billion of that total.
In some cases, Bezos has relied on other big names to decide how to spend his charitable donations. Last year, he launched an annual Courage and Civility Award of $100 million that he grants to a recipient to distribute to charities of their choice. He recently granted that award to legendary singer Dolly Parton after previously awarding it to chef Jose Andres and CNN host Van Jones.
Looking ahead, it remains to be seen how, exactly, Bezos’ philanthropic efforts will take shape. He made his announcement alongside his partner, Lauren Sanchez, and suggested that the couple would make some decisions together on where to direct funds.
Bezos’ past donations and interests are likely to offer the best clues.
On the one hand, in 2018, Bezos suggested that he could end up burning much of his fortune on his passion for space travel, estimating that he could liquidate roughly $1 billion worth of Amazon stock each year to fund his space startup Blue Origin. Bezos has said that his space exploration goals include eventually finding ways to move heavy industry work off of earth and into space in order to reduce pollution in our planet’s atmosphere.
After submitting a request for ideas on how to focus his philanthropy to his 5 million Twitter followers in 2017, Bezos came away with a number of areas of interest and said in one interview at the time that he was “going to end up doing a mixture of things.” Those included the Day One Fund, which in 2018 pledged to eventually hand out at least $2 billion to charities focused on reducing homelessness and creating more preschools.
At the same time, Bezos has clearly identified tackling climate change as a focus. Hence the $10 billion commitment to his Bezos Earth Fund, which includes $2 billion that Bezos says is going toward conservation efforts and transforming food systems. Last year, Bezos said he now spends more money on fighting climate change than on space travel.
While Bezos offered few specifics in his CNN interview on Monday, he did identify climate change as one area of focus, as well as supporting people who he described as societal “unifiers,” like Parton, who aim to combat the “division” often found in politics and on social media.
Soskis isn’t sure exactly what shape Bezos’ philanthropy will take going forward. What he does know is that the areas where the billionaire has shown interest, like climate change, are absolutely among “the most profound” problems faced by humanity and Soskis adds they “could easily absorb all of his funding.”
“He’s chosen very worthy areas [so far],” Soskis says. “I think he’s clearly scaling up the work. And he’ll have to do that even more to make good on his pledge.”
Want to earn more and work less? Register for the free CNBC Make It: Your Money virtual event on Dec. 13 at 12 p.m. ET to learn from money masters like Kevin O’Leary how you can increase your earning power.