Amazon's Jeff Bezos unveils $2 bn philanthropic fund

WASHINGTON: Amazon founder Jeff Bezos announced on Thursday he was creating a philanthropic fund with a $2 billion initial commitment to help homeless families and launch preschools in low-income communities.

The world’s richest individual made the announcement on Twitter a year after asking for ideas on how he could use his personal fortune — now estimated at some $163 billion — for charitable efforts.

The “Bezos Day One Fund” created by Bezos and his wife MacKenzie will focus on two areas — helping “existing nonprofits that help homeless families” and funding “a network of new, nonprofit, tier-one preschools in low-income communities,” he wrote.

For the homeless, grants will be given to organizations “doing compassionate, needle-moving work to provide shelter and hunger support to address the needs of young families,” Bezos said.

The fund will also seek to launch and operate “a network of high-quality, full-scholarship, Montessori-inspired preschools in underserved communities,” he wrote.

“We will build an organization to directly operate these schools.”

Bezos said the schools would “use the same set of principles that have driven Amazon” and that “the child will be the customer.”

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Early steps on charity

The $2 billion initiative, while significant, is far less than the philanthropic efforts of other billionaires including Microsoft’s Bill Gates, who has donated tens of billions to his foundation, and Facebook’s Mark Zuckerberg, who has pledged to donate 99 percent of his shares in the social media giant to an organization focused on public good.

It also falls short of the “giving pledge” initiative launched by Gates and billionaire investor Warren Buffett, who have encouraged wealthy individuals to pledge half their fortunes for philanthropy.

Bezos’s fortune comes mainly from his stake in Amazon, the diversified online firm which briefly hit $1 trillion in market value this month and is the second most valuable company after Apple.

He also operates the private space exploration firm Blue Origin and owns the Washington Post newspaper.

Despite his fortune, Bezos has not been a major philanthropic donor and Amazon has been criticized in its home of Seattle, Washington, for doing little to address problems of the growing homeless population.

Last year, he donated $33 million to fund scholarship for “dreamers,” the name given to undocumented children of immigrants who face legal obstacles in attending college or university. He has also made donations for cancer research and to Princeton University, his alma mater.

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Bezos’s personal wealth has soared with the value of Amazon, whose stock price has doubled over the past year with its expansion into new sectors and geographies.

Launched in 1994 as an online bookseller, Amazon has become a retail powerhouse operating globally, and has expanded into streaming video, music, cloud computing and other segments, and last year acquired the Whole Foods grocery chain. Amazon’s digital assistant Alexa has helped drive its hardware sales and is used on smart devices ranging from cars to refrigerators.

According to the research firm eMarketer, Amazon’s e-commerce revenue will grow more than 28 percent this year to reach $394 billion, and will account for 49 percent of US online retail sales and nearly five percent of all retail spending.

Some analysts have suggested Amazon could face antitrust scrutiny over its growing power in the economy, and President Donald Trump has accused the company of taking advantage of the Postal Service, despite studies suggesting the internet giant’s deal has been beneficial to the US government postal operator.