Ask the average American to name the president of the Lilly Endowment or five Wall Street mega-donors and they’ll probably pause for a few moments, shrug, and then try to change the subject.
It’s hard to blame them. Figures like Lilly’s Jennett Hill or Stephen Schwarzman may generate the occasional headline in trenchant digital media sites, but in the grand scheme of things, they operate in their own little corners of the philanthrosphere, far from the glare of the public spotlight.
The same can’t be said for tech mega-billionaires. Bill and Melinda Gates’ divorce and Jeff Bezos’ excursion into space made international headlines. Jack Dorsey banned a U.S. president from a major social media network. MacKenzie Scott earned plaudits for giving billions to under-capitalized organizations. Elon Musk wants to colonize Mars while Mark Zuckerberg prefers to remain on Earth, albeit with the goal of transitioning the planet’s citizens into a weird virtual dystopia.
This rarified group moves throughout the body politic like fully developed characters in a soap opera—the key difference being that unlike your favorite daytime actors, eight of the 10 richest people in the world hail from tech and have a collective net worth of $1.2 trillion, exceeding the GDP of all but 14 countries. The narrative arcs certainly make for riveting viewing, but it’s also become increasingly difficult to decouple the giver from the public persona, much less determine if their philanthropy is an inherently good thing.
An in-depth look at tech industry giving
These dynamics formed the backdrop of our new white paper exploring giving from the tech industry. The brief, which is part of IP’s “The State of American Philanthropy” project, looks at the philanthropy of companies, venture capitalists and mega-billionaires to help members gain a deeper understanding of how tech giving is transforming the funding landscape.
When we began our research in the fall of 2021, the public’s view of tech donors had coalesced into an uneasy mix of gratitude, cynicism and resignation. We’ve come to appreciate their largesse, yet find it unseemly that they’ve gotten astronomically wealthier during a global pandemic. We’re deeply suspicious of their unchecked power, yet lament their stinginess when they donate a minuscule fraction of their ever-growing fortunes.
We also realize that tech givers are just getting warmed up, since the two biggest risks to the sector—robust federal regulatory intervention or a significant economic downturn—are unlikely to make a substantial dent in their fortunes.
Our research built out some of these narratives, but several epiphanies arose in the margins. For example, conventional wisdom suggests that tech donors are driven by a “disruptive” impulse to “hack” intractable problems. But a closer look revealed that for every Dustin Moskovitz and Cari Tuna embracing “effective altruism” in the global development field, there was a Steve Ballmer operating in a way that appears largely indistinguishable from a conventional place-based private foundation.
As a result, the paper ended up focusing less on laying out broad strokes and more on exploring a deceptively nuanced terrain. While the following takeaways will probably confirm what most readers already suspected, we think they’re still worth articulating in order to get a fuller picture of the most influential sector of the philanthrosphere.
Tech donors amassed their riches across generational waves
Our first order of business was coming up with an organizing framework for the brief and our analysis of about two dozen profiled tech billionaires. We opted to group the donors across a series of generational “waves” corresponding to transformational advancements in the technology sector. This structure was originally laid out by Open Impact founders Alexa Cortés Culwell and Heather McLeod Grant in their 2016 white paper, “The Giving Code,” and gave us a springboard from which to explore inter-generational differences between donors.
The first wave unfolded across the later half of the 20th century when executives like Intel co-founder Gordon Moore and Bill Gates amassed vast fortunes before turning to active giving. The second wave coincided with the 1990s dot-com boom, generating a new cadre of donors like Pierre Omidyar and Jeffrey Skoll.
The next wave included philanthropists emerging throughout the 2010s—Eric Schmidt, Zuckerberg, Laurene Powell Jobs—while the current wave is being shaped by young tech entrepreneurs, dubbed the 1% Generation, that adheres to Salesforce founder Marc Benioff’s Pledge 1%, in which companies pledge to give away 1% of equity, 1% of product and 1% of employee time, in addition to committing to their personal philanthropy.
Over time, givers have begun to embrace philanthropy earlier in their careers
Many of the donors who made their fortunes in tech’s first wave adopted a “get rich now, give later” mentality. Gates co-founded Microsoft in 1975, but didn’t launch the Bill & Melinda Gates Foundation until 2000. That same year, Moore started the Gordon and Betty Moore Foundation. He was 71 years old.
We saw this trend play out for donors who made their fortunes during the dot-com boom as well. Steve Ballmer founded the Ballmer Group in 2014 after stepping down as Microsoft CEO. Jeff Bezos only recently began ramping up his philanthropy. The 77-year-old Larry Ellison co-founded Oracle during Jimmy Carter’s presidency. We’re still waiting for him to embark on active public mega-giving.
In the late 1980s, Ellison took a liking to a young employee named Marc Benioff. Writing in Forbes, Benioff recalled that during his time at Oracle, he believed that he had to wait until he retired to be philanthropic. However, once he founded Salesforce, he discovered that he could simultaneously run a company and make a vigorous commitment to philanthropy.
Benioff’s revelation marked a generational line in the sand, as he and other younger tech executives began to embrace philanthropy earlier in their careers. In 1999, a year after eBay went public, its first president, Jeffrey Skoll, established the Skoll Foundation. Five years later, eBay founder Pierre Omidyar launched the Omidyar Network.
This trend accelerated in the subsequent wave. In 2010, two years before Facebook went public, a then-26-year-old Mark Zuckerberg made a $100 million gift to the Newark public school system. Five years later, he and Priscilla Chan established the Chan Zuckerberg Initiative (CZI). Facebook co-founder Dustin Moskovitz launched his giving vehicle, Good Ventures, when he was in his late 20s.
That said, this 2010 Generation also has its share of laggards. Google founders Larry Page and Sergey Brin have a combined net worth of $240 billion, yet their public giving has been pretty underwhelming across the past 20 years. Neither individual has signed the Giving Pledge—at least not yet—but all of that money has to eventually go somewhere, and where it ends up will be one of the most close-watched stories across the next decade.
The pair’s decision to hold off on widespread giving looks increasingly anachronistic, as the idea that tech entrepreneurs should embed giving into the formative stages of their companies and careers has become an undisputed article of faith for the emerging 1% Generation.
Their approaches to giving defy easy categorization
Tech winners who made their fortunes prior to 2010, including Gates, Moore and Skoll, opted to move their philanthropy through 501(c)(3) private independent foundations. But tech donors have also embraced limited liability companies (LLC) as their giving vehicle of choice.
Under this model, donors can combine traditional grantmaking with political giving and impact investing to achieve maximal scale and impact. Pierre Omidyar got the ball rolling back in 2004 when he established his Omidyar Network, which included a nonprofit foundation and an LLC. Nine years later, Mark Zuckerberg and Priscilla Chan launched CZI, also an LLC.
Unlike 501(c)(3)s, funders giving through an LLC do not need to disclose their donations, making it difficult to track where the money is flowing. Back in October, my colleague Philip Rojc reiterated our longstanding concerns with the “deeply opaque” giving of Laurene Powell Jobs, who channels support through the Emerson Collective, an LLC.
Jack Dorsey’s Start Small, which he launched to fund COVID-19 relief efforts, is also an LLC. Cognizant of these questions around transparency, he set up Google spreadsheet tracking where the money is flowing. Last September, Start Small rep Aaron Zamost told me that “all funding from Start Small is captured in the spreadsheet.”
A month later, the co-founders of Canva, the private Australian graphic design platform, announced they would transfer a 30% stake of the company to the year-old Canva Foundation. The company’s total valuation stood at $40 billion, meaning the leaders earmarked the equivalent of $12 billion for charitable purposes.
Givers operate with varying degrees of accessibility and transparency
We approached this research with a set of hypotheses informed by previous coverage. We anticipated that the average grantseeker will have difficulty accessing tech funding and that corporate philanthropy was opaque and negligible relative to their bulging balance sheets. These hunches proved to be accurate, but once again, it would be a mistake to paint the tech sector or its mega-donors with a broad brush.
A better analogy would be a continuum. On one end, we have accessible and transparent funders like the Chan Zuckerberg Initiative, which has an online grant database and whose CZI Community Fund issues an annual open call for applications, and Craig Newmark Philanthropies, which encourages nonprofits to fill out an online information request to be considered for a grant.
In the middle of the continuum we have the Gates Foundation and the Ballmer Group, which have grant databases but invite proposals by directly contacting potential grantees, and MacKenzie Scott, who cannot be reached by grantseekers, publishes her grant recipients on the online publishing platform Medium, but has dropped hints that a database may be in her future. At the other end of the spectrum are billionaires like Brin, Ellison, and Netflix founder Reed Hastings who do not have a website or a public point of contact.
The most fascinating aspect of writing this brief was creating mini-profiles of the sector’s biggest donors. I often found myself unconsciously assuming the role of an armchair psychologist, and while I am not a trained professional, I eventually landed on the theory that no tech billionaire embodied the complexities, contradictions, and tensions permeating the space more than Pierre Omidyar.
He and his wife Pam have acknowledged the absurdity of their wealth, writing in their Giving Pledge letter that “we have more money than our family will ever need.” Ever the Silicon Valley disruptors, the couple aims to “solve some of the world’s most intractable problems” and channels funding through an LLC, the Omidyar Network, that straddles the line between transparency and opacity. Yet the eBay founder also has a tendency to go off-script, as evidenced by his emergence as a Big Tech skeptic.
But I couldn’t help but notice that for all of their ambitions and contrarian impulses, the Omidyars seemed suspiciously quiet across the past two years, so I did some deeper digging. A forthcoming post will take a closer look at what the couple has been up to.