May 31, 2019 9:00 AM

5 Mistakes MacKenzie Bezos and Other Mega-Donors Should Avoid

The philanthropic road is littered with the carcasses of those who thought that “disrupting” poverty would be as simple as disrupting the taxi industry.

MacKenzie Bezos standing next to Jeff Bezos

MacKenzie Bezos’ recent announcement that she’d take the Giving Pledge and dedicate at least half of her $35 billion in net worth to philanthropy has sparked attention, partially because her ex-husband, Jeff Bezos, wouldn’t sign the pledge. Her commitment to the Giving Pledge, spearheaded by Bill and Melinda Gates and Warren Buffett in 2010, should be lauded, especially in light of the current cynicism about the giving of mega philanthropists.

“My approach to philanthropy will continue to be thoughtful,” she wrote in her letter announcing the pledge. “It will take time and effort and care. But I won’t wait.”

I hope others—including Jeff Bezos as well as those who will earn fortunes from the recent initial public offerings of Lyft, Uber, and Pinterest and the potential IPOs of Slack and Airbnb—will follow MacKenzie Bezos’ lead. I hope they share her commitment to giving and her wisdom about the care such giving takes. Because it is anything but easy.

Indeed, as big givers from Andrew Carnegie to Warren Buffett have observed, it can seem easier to accumulate resources than to give them away wisely. Yet many new mega-donors arrive on the philanthropy scene with much bravado, sure that whatever acumen helped them get rich will make them better philanthropists than those who came before them. The philanthropic road is littered with the carcasses of those who thought that “disrupting” poverty would be as simple as disrupting the taxi industry or that “transforming” education would be as easy as giving every student access to some new app or device.

Almost invariably, they learn this is not the case. In a just-completed study funded by the Helmsley Charitable Trust and conducted by the organization I lead, we interviewed donors and early staff involved with starting 14 major grantmaking organizations. Among the key lessons that emerged was a need for humility. One of those we interviewed put it this way: “Just because you come from a business background ... doesn’t mean that you’ll be similarly successful in a nonprofit setting."

Here, then, are five common mistakes new givers make that the next generation of tech philanthropists should try hard to avoid.

Thinking a single, quick-fix “innovation” will solve complicated social problems.

Those who made their money through technological innovation often believe there will be an analogous breakthrough in their philanthropy. For instance, the Bill and Melinda Gates Foundation has sought to find the single intervention that would lead to better outcomes in U.S. public education, focusing first on reducing the size of high schools, then on teacher evaluation, and then on “common core.” But none has panned out as everyone hoped: It turns out that there is no quick fix when working on complex, interdependent problems like education.

Looking for one-size-fits-all performance measures

Those who are used to focusing on the readily available metrics of the business world, with its common measures like profit or ROI that cut across companies and industries, often push for something analogous in philanthropy to gauge progress.

For instance, one “venture philanthropy” organization I know has used meaningless metrics like “lives touched” and ratios such as “cost per life touched” in an effort to standardize assessment across diverse organizations working on different issues. Others have emphasized “overhead” measures, seeking to differentiate between money spent “on program” and money spent on items like rent (even though the program couldn’t exist without it). This leads to poor decision-making about which organizations to support. The fact is, really understanding the impact of a nonprofit is complicated—often requiring sophisticated evaluation skills not generally learned in an MBA program or at a technology startup.

Relying too much on their own network.

When I ask new donors how they are coming up to speed on philanthropy, they often tell me about the experts helping them or the other big donors whose advice they have sought. That’s fine, but insufficient.

New donors should spend some days shadowing nonprofit executive directors to understand the unique challenges of nonprofit work. They will see that nonprofit leadership generally is tougher work than leading an equivalent sized business. Contrary to negative stereotypes, many nonprofits have highly effective, brilliant leaders. Donors who learn from nonprofit staff in this way will also be more responsive to the real needs of these organizations—for example, offering unrestricted, long-term support rather than the highly restricted single-year funding that inhibits nonprofit performance.

New givers should also seek to understand the realities of those whose lives they seek to improve, by talking with them directly. After all, who knows more about their situation and challenges than they do?

Dismissing philanthropy as ineffective rather than seeking to learn from what has worked.

I’ve seen donor after donor enter philanthropy this way, only to realize that their “new” approach isn’t really new or just doesn’t work—as some who pioneered the idea of “venture philanthropy” now concede.

The reality is that effective giving has led to great progress both here in the U.S. and around the world. Software entrepreneur Tim Gill’s support, through the Gill Foundation, helped fuel a movement for increased civil rights for LGBTQ people. Early Microsoft employee Rose Letwin has contributed, through her Wilburforce Foundation, to preserving millions of acres of land in the Pacific Northwest. And, while they have made mistakes, Bill and Melinda Gates have also had great success, too: Their foundation has helped, through its giving, to contribute to a massive decline in childhood mortality worldwide. These are just a few examples from which new donors could learn.

Thinking any single philanthropist can accomplish anything.

This is perhaps the most counterintuitive for those who made their money running a business. Donors must act collaboratively, adopting shared strategies with a network of other actors—including nonprofits and other funders. In the competitive dynamics of business, strategy is all about unique positioning, and you want your strategy to be yours alone. In the collaborative dynamics of philanthropy, strategy must be broadly shared or it will fail. Mark Zuckerberg found this out the hard way in Newark, where his effort to reform public education fell far short of expectations in part because of a lack of partners with local roots.

Being an effective giver isn’t easy, as MacKenzie Bezos seems to recognize. Many donors have to learn the hard way. “I probably did as much background research as anyone, and I’d argue I didn’t do enough,” technology entrepreneur Mario Morino told me. “I was really arrogant.” Morino cared so deeply about having an impact with his philanthropy that he set out to learn and improve, devoting the past two decades to becoming one of the most thoughtful givers I know.

Morino came to realize that giving is uniquely challenging, that his business acumen didn’t necessarily guarantee success as a philanthropist, and that analogs like venture capital didn’t translate so easily to giving. His experience, and those of others like him, can be instructive to the newest generation of givers—if they have the humility to recognize what they don’t know and to learn from those who came before.