Donating $130B to Henry Street Settlement would probably destroy them. When you have that much money, you don't care about deploying it efficiently, you just want to deploy it. You often can't deploy it efficiently without distorting markets. Rather than more stuff getting done, everything just gets done less efficiently, with everyone along the value chain becoming a highly-paid consultant of dubious value.
It really is a lot easier to deploy $10M in capital than $100B. $10M means that organizations that do good work and otherwise couldn't exist now can exist. $100B just means that everyone working in an area tangentially related to the benefactor's interests takes home fat salaries.
(My wife manages about $180M for a foundation, which is just about the sweet spot: enough to fund several organizations that wouldn't otherwise exist, but not enough to distort markets or incentivize people towards bureaucracy.)
It can't, really, without creating the bureaucracy that leads to all that waste in the first place.
$130B is 13,000 $10M chunks. No single person can find, vet, decide upon, and measure progress for 13,000 small organizations. That means you have to hire a staff to manage and give away the money. A staff means that a.) it's not your imagination that matters b.) money is allocated via horse-trading among the people who have been hired to manage the money and c.) suddenly you have a strong incentive for potential recipients to game the system and focus on making things look good for donors rather than providing the services to the ultimate beneficiaries. Organizations that previously were all about the mission become focused on the money, because there's a lot of it available and they're competing with lots of other organizations for it.
It's equally impossible to create a space program without a lot of middle managers and dubious allocations of funds.
As others have pointed out, Bezos has already got one organization which distributes money to relatively poor and needy people called Amazon, just one which happens to be known for its lack of generosity in doing so. It's also a demonstration that a sufficiently motivated Jeff Bezos is very, very good at devising ways to allocate resources amongst huge numbers of competing needs...
If he wants to deploy it efficiently, without needing to build a bureaucracy around it, he could do what Buffett is doing: donate it to the Gates Foundation. It's not great if you want vanity projects, but if he really wants to do good then it's hard to think of a better way.
Having worked in a mission financed by the Gates foundation I can tell you that a LOT of money leaves between the moment it's donated and the moment it's used in the field.
The Gates Foundation is also a bureaucracy facing the same problems described by GP.
Moreover I guess that economies of scale are not so significant after a certain point. I would prefer five different 100B foundations, rather than a 500B one, to encourage diversity in the donation strategy and goals.
Yes, and any organisation of that scale will have bureaucracy. My point is that he could avoid needing to build another one by using a fund that already exists and has a proven track record.
I agree with you on that. My counterpoint is that marginal economies of scale are small, if not negative, at the size of Gates Foundation, and that having some diversity among foundations may be itself an advantage.
Bezos isn't giving all of his wealth to space. He has been clear about that, stating over and over again in interviews that he plans to also donate to social causes in the US where he can have a near-term impact.
He's 54 years old and has gained $104 billion in new paper wealth in the last three years. I'd rather he get his philanthropy right - assuming the wealth sticks around at all, given Amazon's valuation - instead of hurrying and dumping billions into poor decisions that accomplish little. If he perhaps has 30 years to give tens of billions to social charity efforts, then patience and prudence is called for.
I don't really believe in the "donating all of your tens of billions of dollars" either. However, he is right that Bezos lacks imagination if that is all that he can think of doing with his money.
First off, how about not maximizing the profit from Amazon for himself and for speculative shareholders and increasing worker salaries instead?
Second, how about keeping prices as low as possible for consumers? They made record profits, and multiple X of what Amazon made like a couple of years ago, and yet they still increased Prime subscription prices, for instance.
But Bezos could also lower his company's commissions and increase commissions for affiliates (which I think were also lowered like a year ago), as another example.
There are so many more ways in which Bezos could "do good", without "having" to make billions of profits himself and his shareholders. So either he really lacks the imagination to do stuff like that, or he's just using that reason as an excuse to seem like there's no other option than for him to make so much money, because in reality he loves making all of that money for himself. But he likes to pretend he doesn't and that he would "do more" if he could.
I really don't believe in this whole thing of "pleasing shareholders at all costs, and bottom-feeding on the poor (both regular workers and consumers) as much as possible to do that." Also, Bezos himself used to believe that pleasing shareholders didn't have to be the company's #1 priority for a decade and a half, even if his reason then wasn't "to do good" but "grow as much as possible first".
I'm not sure what is happening lately, but there is a clear trend of corporations bottomfeeding more and more and squeezing all the money from the bottom up. My guess is it's a combination of increased corruption in Congress and of "buying of politicians" (it has become much easier to do it), a failure of anti-trust laws and enforcement, allowing big companies to grow ever larger and have less competition, as well as increased corruption/greed at the top of these companies (their boards being more and more willing to compensate themselves and the top-level execs more and more every year, to the detriment of workers and consumers).
To be fair, Bezos isn't rich because Amazon makes loads of money and has fat margins. Amazon was loss-making for most of its existence, and probably only became profitable thanks to AWS. He's insanely rich because shareholders don't care about Amazon's current profits, but just like its growth.
You mean he could make less money by running his company inefficiently and that would be good for people? Why single out Amazon workers and affiliates though? What if he gave cash to, I don't know, all optometrists, or something? Eventually, it's just giving away money to someone. Space travel is different - it's creating value on its own.
Exploit is the wrong word. It's America and they're free to quit. Nothing's keeping there except their own desire for money. They won't starve without that job so it's not wage slavery. They simply choose to do it.
And why affiliates? The GP proposed giving money to internet advertisers. They are surely not the most deserving group of people on Earth.
> They won't starve without that job so it's not wage slavery. They simply choose to do it.
Aren't those people paid close to minimum wage? People on minimum wage don't live in an utopia where they have all the freedom in the world to move around as they wish, unlike Silicon Valley employees being paid 200k per year.
I'd say Bezos has a lot of work to do on the "taking better care of his employees" front.
And regarding space travel at this point it's just an intellectual fetish based on reading/watching SF (and I'm a big fan of SF...). Except for the "single point of failure" thing, which hasn't truly been an issue for the last 65 million years, we should be fine on Earth for the next decades, at least.
We seem to have avoided catastrophe as a species a few times cutting it real close.
And those haven't been really big incidents either.
Anyway, Musk's strategy in making space travel cheaper is a right one. Throwing more money at it directly is likely to result in inefficient solutions. It requires time and work add much as some money.
Setting up a Bezos space university would be a good start. And figuring out education without (much) bureaucracy and sinecures.
Space travel (especially long range) is interesting in that tackling it rewrites solving a whole lot of ancillary problems. Social, political, educational, biological, agricultural, physical etc.
Another option is to give it directly to poor people, no strings attached as mentioned in a recent HN article as being an effective way to use funds to help people get out of poverty.
Giving directly works if the primary impediment to development is a lack of capital. That's been the case in places like rural Kenya or Bangladesh, which is why organizations like GiveDirectly.org or the Grameen Bank have seen success.
This is not the case in many areas of the world, and particularly not in poor pockets within developed nations. There, the barriers to development often include things like: poor educational attainment; fucked-up incentive structures; lack of physical safety & security, unenforceable property rights (leading to fucked-up incentive structures); non-existent infrastructure.
Throw money at a bunch of people who know what they need to do better their lives and have the skills to do so, and you get economic development. Throw money at a bunch of people who have either no idea or no incentive to spend the money wisely, and the money trickles right back out again.
(This, BTW, mirrors the startup scene pretty well. Throw a few hundred million at Google, Slack, or GitHub and you get tools that help millions of people. Throw a few hundred million at Juicero, Klinkle, or Theranos and you get a clusterfuck.)
It really is a lot easier to deploy $10M in capital than $100B. $10M means that organizations that do good work and otherwise couldn't exist now can exist. $100B just means that everyone working in an area tangentially related to the benefactor's interests takes home fat salaries.
(My wife manages about $180M for a foundation, which is just about the sweet spot: enough to fund several organizations that wouldn't otherwise exist, but not enough to distort markets or incentivize people towards bureaucracy.)