Photo illustration of Jack Dorsey in the middle, with portrait vignettes of his celebrity friends surrounding him
Billionaire Jack Dorsey and his celebrity network. Photo Illustration: 731

Jack Dorsey’s Celebrity Network Is Helping Him Give Away Billions

The tech titan’s big-money giving has bloated Hollywood’s charities
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Jennifer Lopez and Sean “Diddy” Combs were getting ready to salsa dance on Instagram Live when Direct Relief, the charity benefiting from the dance-a-thon, got a message on Twitter from @Jack—that’s Jack Dorsey—asking where to wire $2 million.

Days before the Easter Sunday event last year, Dorsey had announced a plan to donate almost 20 million shares of Square Inc., the payments firm he co-founded, worth $1 billion at the time, primarily to Covid-19 relief. It was about a month into lockdown in San Francisco and the bearded billionaire wanted to move fast.

“Giving $2mm to @DirectRelief,” Dorsey tweeted the night of the dance-a-thon, which was raising money to fight the virus in communities of color. “Thank you @Diddy.”

“I honestly don’t know what the decision-making was on his part,” said Direct Relief Chief Executive Officer Thomas Tighe, who’s never talked to Dorsey. “It was certainly timely.”

This is not how the world of big money philanthropy typically operates.

When Dorsey, 45, laid out his goals—months before MacKenzie Scott became the poster woman of high-flying philanthropists—the nonprofit world was abuzz with hopes for what this brave new approach might look like. Dorsey said he wanted to work quickly and that he would be transparent about it, a departure from the slow-moving black box that characterizes traditional grantmaking.

So far, Dorsey has delivered on that promise. And, with a couple of bonuses: Thanks to Square’s surging stock price, Dorsey’s pledge has exploded in size. What’s more, his gifts come with little red tape for recipients—something coveted, but uncommon, in the philanthropy world. Despite all that remarkable news, there are some downsides to his methods.

Dorsey has a small and erratic operation. Forgoing the large teams of consultants and experts favored by his philanthropic peers, he has just two employees from his family office in charge of helping him empty his wallet. The result is abnormally large gifts to relatively small celebrity charities, and grants to the favored philanthropies of Dorsey’s allies.

Dorsey’s Donations

  • Gifts tied to public figures
  • Other gifts

“Thinking that you can do it on the cheap, in some ways, given the scale of the money that is being distributed, it’s shortsighted, penny-wise and pound-foolish,” said Greg Witkowski, a senior lecturer of nonprofit management at Columbia University, referring to Dorsey’s small outfit. Nonprofits, he said, can be more complicated than for-profit institutions. “You need an understanding of that field to succeed.”

Organizations running on relatively small budgets aren’t always equipped to handle such large sums of money. In one instance, multiple former employees of a celebrity charity that received huge gifts from Dorsey told Bloomberg News that while the non-profit ballooned in size, its operations weren’t up to the task. They described high turnover, lost inventory, and constantly changing org-charts.

In an email, Aaron Zamost, a spokesperson for Dorsey’s charity, did not comment on the abnormally large size of some gifts. “#StartSmall consults with many people and organizations about giving,” he said without naming anyone, adding that Dorsey is “very involved.” Several people familiar with the Twitter founder’s objectives said they were told he’s keeping things small to avoid bureaucratic deadweight.

In other words, he’s bringing Silicon Valley’s favored mantra “move fast and break things” to philanthropy. And while that may work for building social media companies, it’s less-tested in delivering medical supplies to disaster zones, for example.

Dorsey, who’s also the co-founder of Twitter, has so far given away $428 million in about 240 gifts in less than two years—about 5% of Scott’s record setting giving over the same period. But his pot is growing. As Square shares have increased in value, the initial $1 billion he committed has more than quadrupled. Taking into account the stock he sold for past donations, he has roughly $3.5 billion left to give. At this rate, he could be at the project forever.

Growing Pledge

The value of the shares Dorsey pledged has ballooned
Note: Square’s share price and Dorsey’s gift tally are as of market close Friday, Nov. 19, 2021. This does not reflect how much Dorsey has left to give because he has sold off some of the Square shares to make gifts.

Almost half of the money has gone to organizations started by, partnered with or connected to some of the most famous people on the planet—many of whom have a personal relationship with Dorsey. It’s like the Oscars and Grammys combined: Jay-Z, Rihanna, Eminem, Leonardo DiCaprio, Sean Penn, Jaden Smith, John Legend and Matt Damon are among those whose charitable organizations have received direct donations from #StartSmall. Celebrity charities alone got a quarter of the money Dorsey’s granted to date.

And Dorsey isn’t just giving to his famous friends, he’s making extremely generous gifts that allow their non-profits to dramatically grow in size and scope.

Actor Sean Penn’s disaster relief organization CORE (Community Organized Relief Effort), for example, got a $30 million injection from Dorsey last year—several times larger than its usual yearly donations. The nonprofit, which primarily worked in the Caribbean before Covid-19, went from about a dozen U.S. employees to more than 1,500 last year, said CORE’s CEO Ann Lee. With the help of Dorsey’s gifts, CORE opened Covid-19 testing sites around the U.S., administering 40,000 tests a day in Los Angeles alone at its peak.

People who worked at CORE during that rapid period of growth said they got little training and human resources personnel regularly left, including one who lasted just a week. One employee said there were payroll issues, with no communication about why or when their paychecks might arrive. CORE also lacked an inventory system for its growing Covid testing operations, employees said; they also said they had to count test kits by hand and that they lost equipment like Wifi sticks.

Disorganization isn’t uncommon in the disaster relief world, but Witkowski, who is also a faculty affiliate at the National Center for Disaster Preparedness, said CORE’s growing pains are “far beyond the sort of scaling problems that others have when they’re scaling up for disaster.”

In an emailed statement, Lee said CORE’s systems were not designed to manage such a large workforce, but that they have since made significant investments to improve internal processes. She also said the hand counting of tests was a safeguard measure in addition to an electronic system and that the payroll issue was a one time thing because they changed systems.

“We could not have predicted that we needed to build permanent infrastructure capable of managing thousands of employees and millions of dollars in supplies,” Lee said in the statement. “The alternative was not to respond or significantly delay critical response.”

Eminem, Jaden Smith and tech entrepreneur Sam Altman’s charities all got gifts from Dorsey several times larger than what they usually see in an entire year, according to filings to the Internal Revenue Service. Rihanna’s organization more than doubled its 2019 donations with more than $20 million in gifts from Dorsey alone last year.

Dorsey’s Big Gifts

The tech titan is giving unusually large donations to many celebrity organizations.
  • Total grants and contributions, 2019
  • Grants from #StartSmall, 2020

Dorsey discloses every donation in a real time, public Google Sheet. The rows populate with new gifts—sometimes once a week, other times several a day—like a pared down Twitter feed: timestamp, amount, organization and a couple hundred characters on why he’s making the gift, sometimes pulled straight from nonprofits’ own pitches for money. “It’s important to show my work so I and others can learn,” Dorsey tweeted.

That, however, is where Dorsey’s transparency begins and ends. #StartSmall, the name of his philanthropy, has no official website, or Twitter page. There’s a Google form, but it’s not straightforward where to find it. It’s accessible through an unaffiliated website and is in the Twitter bio of Vanessa Terry, one of the two people Dorsey has working on #StartSmall. The other is Matthew Goudeau, who used to work for the city of San Francisco, helping it land a $15 million gift from Dorsey last year.

Back in 2015, Dorsey—then with only a couple billion dollars to his name, according to the Bloomberg Billionaires Index—planned to go the more traditional route. He set up a foundation, but filings show it never had any assets or expenses.

Today, #StartSmall exists as a limited liability company, which transfers its holdings to donor-advised funds when they are distributed to a grantee, Zamost said. Such a vehicle gives philanthropists the tax benefits of a foundation without the reporting requirements. Dorsey has said that he chose an LLC because it “provides flexibility.”

The two-person team Dorsey has working on it is an unusually small crew for the amount of money at hand. For example, billionaire hedge fund manager Jim Simons, who’s philanthropic ambitions are comparable to Dorsey’s in terms of dollars committed and spent, has 400 people working at his foundation.

Dorsey is one of the more distinctive Silicon Valley tech titans. The scraggly-bearded CEO looks more like a Deadhead than a tech titan with a $13 billion net worth. He co-founded two public companies, including a social network that keeps millions of people glued to their phones. Yet, Dorsey himself is known for an affinity for silent meditation retreats and intermittent fasting.

As Dorsey morphed into a celebrity billionaire, he made friends with the rich and famous. Kanye West has called Dorsey a friend. Sean Penn, of CORE, and Dorsey were spotted on a beach in Hawaii last November. Dorsey went yachting with Beyonce and Jay-Z in the Hamptons. Earlier this year, Square acquired Tidal from Jay-Z for nearly $300 million, giving the rapper a seat on the board.

In a world where personal connections are a leg up to a Dorsey gift, that leaves other charities wondering how to get funding.

Aisha Nyandoro, who runs Magnolia Mother’s Trust, an organization that gives cash to Black mothers living in extreme poverty, said she applied last year for a #StartSmall grant through the public application form.

Nyandoro’s is just the kind of project that Dorsey might fund. In a Twitter thread last year, he listed universal basic income as one of the best long-term solutions to the “existential problems facing the world.” Nyandoro, who is CEO of Springboard to Opportunities, the parent nonprofit that runs the Magnolia Mother’s Trust, has routinely appeared on NPR as an advocate for guaranteed income. She doesn’t have any connection to Dorsey, though, and never heard back about her application.

By contrast, Dorsey gave $15 million to Mayors for a Guaranteed Income, a project started by former Stockton, California Mayor Michael Tubbs, who knows Dorsey in part through his former Stanford classmate, Snapchat founder Evan Spiegel.

“Individuals don’t know what they don’t know,” Nyandoro said. “Your philanthropy tends to start at home.”

It’s not impossible to get a gift by applying cold, but it’s rare. Zamost didn’t say how many such gifts #StartSmall has given. Of the roughly three dozen organizations Bloomberg spoke with, six said they got a gift with no connection to Dorsey or someone who knows Dorsey.

Anthony J. Artis of the Flint, Michigan-based Dedicated Believers Ministries, a non-denominational Christian church and charity, applied for $425,000 from #StartSmall in June 2020. “I just wrote a letter and sent it to the corporate address,” Artis said. “I had no other connection but God.” He ultimately got about a third of what he requested for Covid-19 relief efforts.

Dorsey’s average gift size is almost $1.8 million, and more than $1.6 million for gifts tied to celebrities, tech titans or other powerful connections like athletes and politicians.

A better bet for smaller organizations looking for a gift is to go through DeRay Mckesson, the Black Lives Matter activist, podcast host and one-time Baltimore mayoral candidate. Mckesson has known Dorsey for years and volunteers as a grant-picker for #StartSmall about five to 10 hours a week, he estimated. He’s one of the “many people” #StartSmall consults with on giving, Zamost said. So far Mckesson has sent at least $27 million to more than 34 organizations, many of them small and grassroots. Seven of the 10 most recent gifts #StartSmall granted were tied to Mckesson.

“As an activist and organizer who’s been working across the country on issues of racial justice and education, I have met hundreds of leaders and organizations,” Mckesson said in response to emailed questions. “Organizations come on the radar by recommendations from others, and I also research issue areas and reach out.”

DeRay Mckesson in 2020 at the iHeartRadio Podcast Awards.
Activist DeRay Mckesson in January 2020. Photographer: Rich Fury/Getty Images for iHeartMedia

On average, gifts to organizations with a Mckesson connection received about $800,000. Many of the nonprofits he’s working with are small, and Dorsey’s gifts are among the biggest they’ve ever received. Daniel J. Downer, the executive director of the Bros in Convo Initiative, which Mckesson connected to #StartSmall, said he initially asked for $50,000, but ended up getting a $90,080 grant. “This really was a big, big gift,” Downer said.

John Rappaport, a University of Chicago Law School professor, who said Mckesson often turns to him for the latest research on policing in America, said he got a grant from #StartSmall without formally applying. Rappaport sent Mckesson a pitch, but never had any contact with #StartSmall until he got a phone call telling him he was getting $200,000.

The professor said the process made him feel “a little uncomfortable,” even though Mckesson is using his position to reach groups, largely minority-run, who fall through the cracks of traditional philanthropic giving.

“It felt a little, like, sneaky or something,” Rappaport said. “I was like, ‘Oh, I’m getting this because I happen to know DeRay.’ I happen to know DeRay because he likes my work, not because my dad is famous or something, but still, it felt like ‘Why me?’ You know?”