Introduction to MacKenzie Scott’s Philanthropy

MacKenzie Scott, one of the world’s wealthiest women and most influential philanthropists, is now known for her “no strings attached” surprise grantmaking. But, as a Princeton University sophomore, she learned what it was like to be on the receiving end of generosity.

A Personal Experience of Generosity

Facing the prospect of dropping out if she couldn’t come up with $1,000, Scott was crying when her roommate, Jeannie Tarkenton, found her and got her dad to loan Scott the money.
“I would have given MacKenzie my left kidney,” Tarkenton told the Associated Press recently. “Like, that’s just what you do for friends.”

By JAMES POLLARD

MacKenzie Scott’s Current Philanthropic Efforts

Today, Scott’s net worth is around $34 billion, according to Forbes. In October, Scott wrote that Tarkenton’s act is among the many personal kindnesses she has considered as she has donated more than $19 billion of the wealth she amassed mostly through Amazon shares as part of her 2019 divorce from company founder Jeff Bezos. And when Tarkenton started Funding U, a lending company that offers last-gap, merit-based loans to low-income students without co-signers, Scott said she jumped at the chance to help.

The Creation of Funding U

A quarter century passed between the end of their sophomore year and Funding U’s creation, a period when Tarkenton realized just how many more students were being pushed into her former roommate’s position by the rising cost of college. That Scott took an interest in her old friend’s mission to help economically disadvantaged students finance school is unsurprising. Her unusual gifts — which she rarely discusses or discloses outside of essays and a database on her website, Yield Giving — tend to focus on issues of equity, higher education and economic security.

Investing in Mission-Aligned Ventures

But the revelation of Scott’s Funding U support offers a new glimpse into her investments. Scott wrote last year that she would invest in “mission-aligned ventures” led by “undercapitalized groups” that focus on “for-profit solutions” to the challenges that her philanthropy seeks to address. However, this is among the few confirmed publicly.
“She’s looking for innovative ways to create opportunity for those that don’t have it,” said Marybeth Gasman, who runs Rutgers’ Center for Minority Serving Institutions and follows Scott’s donations. “I have to say, as somebody who went to school on a Pell Grant and who came from an extremely low-income family, that’s really meaningful.”

Amplifying Impact

Scott, in many ways, resembled the exact students that Funding U seeks to serve. Tarkenton recalled the undergraduate Scott as a “hardworking student with very good grades” who was “highly focused” and had already been accepted into a competitive program.
Her lending company plugs those sorts of details — student transcripts and internship experiences, for example— into an algorithm that determines the likelihood applicants will complete college, get a job and make enough money to pay back the loan.
Tarkenton suggested that this formula is fairer — and more predictive — than existing criteria that determine loan eligibility based on the credit histories of students or their co-signers.

A Philanthropic Endeavor?

Tarkenton is clear: the endeavor isn’t philanthropic. Funding U is a company, after all, and Scott will eventually get her money back — just as she repaid Tarkenton’s informal loan all those years ago at Princeton.
But the approach represents a model that Scott’s former roommate thinks more philanthropists should embrace. Tarkenton said there’s more space for the likes of Scott to “bring a spirit of investment” that serves a “greater good” but isn’t purely charitable.
“I think philanthropists can get a little messier and do more with their money,” Tarkenton said. “I’m all about pushing philanthropists in a very aligned way.”

Conclusion

The story of MacKenzie Scott and her investment in Funding U serves as a reminder of the impact that kindness and generosity can have on individuals and society. By using her wealth to support innovative solutions to social problems, Scott is creating a ripple effect of positive change that will be felt for years to come.

FAQs

Q: What is Funding U?
A: Funding U is a lending company that offers last-gap, merit-based loans to low-income students without co-signers.
Q: How does Funding U determine loan eligibility?
A: Funding U uses an algorithm that takes into account student transcripts, internship experiences, and other factors to determine the likelihood that applicants will complete college, get a job, and make enough money to pay back the loan.
Q: How is MacKenzie Scott involved with Funding U?
A: Scott provides most of the “junior debt” that Funding U uses to reduce the risk for larger investments from banks, and she will eventually get her money back with interest.
Q: What is the goal of Funding U?
A: The goal of Funding U is to provide affordable loans to low-income students who may not have access to traditional forms of financing, and to help them achieve their educational and career goals.