Last April, Twitter and Square co-founder and CEO Jack Dorsey announced he had transferred $1 billion of shares in Square to an LLC called Start Small to fund COVID-19 relief efforts, and once the pandemic subsided, causes related to girls’ health and education and universal basic income (UBI).
It was a huge development, the largest commitment earmarked for COVID response at the time, prompting me and others to call out Dorsey’s fellow billionaires for not pulling their weight during a historic crisis. Though he’s moving money through an LLC and donor-advised funds, which are not required to disclose donations, Dorsey’s pledge to track his giving in a publicly accessible Google spreadsheet was refreshing in an increasingly opaque world of mega-giving.
Once the money began to flow, it became evident that Dorsey’s lean operation was channeling grants to organizations serving communities that were being hit the hardest, and offering a lot of unrestricted funding. Along with the comparable, albeit much larger giving of MacKenzie Scott, the project became representative of emerging paradigms in rapid, no-strings mega-giving.
But for all of Dorsey’s efforts at transparent and innovative grantmaking, there’s still a lot we don’t know about Start Small almost a year and a half later. Who makes the funding decisions, for example, and how do these individuals determine which organizations receive support? What criteria are they looking for, and at what pace will giving proceed? I suspect—and hope!—that Dorsey or a team member will shed more light on these important questions in the months ahead.
The things that we do know, however, will be of great interest to nonprofit leaders. For one, unlike the large majority of foundations, Smart Small does accept unsolicited funding requests, via a simple Google Form. The LLC is also giving at a higher rate than most private foundations. And Start Small has way more money to give. Thanks to Square’s stock price, the LLC’s decision makers now have around four times as much money to disburse than in April 2020.
Seventeen months after Dorsey fired off a string of tweets proclaiming his intentions, here are eight points gleaned from his ambitious and evolving philanthropic experiment.
1. He’s disbursed 43% of his original commitment of $1 billion
Dorsey’s $1 billion commitment put him at No. 5 on the Chronicle of Philanthropy’s list of top givers in 2020, and among the largest individual donors to COVID relief. While such statistics make for good headlines, savvy readers know that a “commitment” doesn’t mean the money hit a recipient organization’s checking account. It merely signifies the promise of future giving. This is why it’s always tricky to conflate commitments as a metric for a donor’s real-time generosity.
So how has Dorsey fared? According to his spreadsheet, as of September 22, Start Small has awarded 243 donations totaling just over $425 million since last April. Of this amount, Dorsey has earmarked approximately $317 million of the total for COVID-related support. And Start Small gave $333 million of the total to U.S.-based organizations, according to an analysis by the National Committee for Responsive Philanthropy’s Ryan Schlegel.
2. Dorsey’s gotten a lot wealthier
When Dorsey pledged to donate $1 billion worth of equity in Square, the amount represented a whopping 28% of his $3.9 billion net worth. Now, reflecting a trend of ballooning private wealth during a global crisis, Dorsey’s real-time net worth stands at over $14 billion, thanks to a 259% increase due to Square’s share price. Dorsey owns about 13% of Square, according to a March 2021 regulatory filing.
3. The value of Dorsey’s commitment has almost quadrupled in size
Last April, in a video chat with comedians and TV hosts Desus Nice and The Kid Mero, Dorsey said, “One of the awesome things about this [Start Small] model is, as Square grows in value in terms of its stock price, the fund has more to access.” He wasn’t kidding.
While the original commitment was for $1 billion, because it came in the form of a stock donation, the amount available for philanthropy has grown with Square’s share price. As of September 22, the spreadsheet’s “Details” tab notes that Square’s share price was $260.92, up from around $50 when the initiative began.
That means the combined funds—which currently exist across the Start Small LLC and a number of DAFs—have a value of around $4 billion—and that’s after having donated $425 million. Even if the Square stock tanks and the fund loses half its value, Dorsey will still have around $1 billion more to give away than when he started.
4. Start Small has become a major social justice funder
“After we disarm this pandemic, the focus will shift to girls’ health and education and UBI (universal basic income),” Dorsey tweeted last April. But on May 25, the murder of George Floyd prompted a nationwide uprising. That June, Dorsey made his first gift under the “Social Justice” category—$2.2 million to support Campaign Zero’s national initiative leveraging data to improve policing outcomes in America.
Roughly 74% of Dorsey's total giving was earmarked for grants focused on COVID-related relief, with some grants assigned multiple categories. But a review of Start Small’s recent grantmaking, from June to September 2021, suggests that social justice has become a top priority. Of the 22 grants awarded in that period, 59% were assigned the Social Justice category, followed by COVID-19 (27%), Girls Health and Education (27%) and UBI (5%). (The total is more than 100% because some grants were assigned multiple categories.) And of the $21 million in total dollars disbursed during this period, 75% flowed to grants categorized as Social Justice, outpacing Girls Health and Education (32%), COVID-19 (21%) and UBI (5%), again, with some overlap in categories.
The largest grants filed in the social justice category thus far are $10 million for Boston University’s Center for Antiracist Research; $7.6 million for FUSE Corp’s Equitable Recovery Initiative, which aims to accelerate system change and increase racial, social and economic justice; and $4 million for Bread of Life to support families in Texas who have been impacted by last winter’s storms.
Bottom line? What started as a COVID-19 relief fund is now one of philanthropy’s biggest supporters of front-line social justice organizations. But he’s not making social justice grants in a vacuum, as the notable overlap between grant categories indicates. The NCRP’s Ryan Schlegel picked up on this theme, telling me, “You can see from his social justice funding how important UBI/direct cash transfer policy development and advocacy is to him, especially, in the large gifts to orgs and cities focused on that work.”
5. Nonprofit leaders can submit funding requests
When Dorsey announced his $1 billion commitment last April, he tweeted “Suggestions welcome,” implying that organizations could pitch their proposals to his Twitter handle. It seemed like a clumsy way for nonprofit leaders to petition an individual overseeing two major tech companies, even if Twitter is one of them.
But as it turns out, there’s been a way to submit funding requests via a Google Form, apparently from the beginning, though it wasn’t all that apparent. I first came across the form when a search for “Start Small LLC” brought me to a seemingly official site, startsmall.llc, which links to the form and a contact email. However, the site is “currently not affiliated with Jack/Twitter/Square.” Rather, it’s the creation of a developer who populated the page with content from Dorsey’s Twitter feed and gift-tracking spreadsheet.
Aaron Zamost, a former Square exec and representative from Start Small, did respond from the contact email listed, confirming that the site was not affiliated with Dorsey, and that “our online presence is limited to this Google Form application, as well as our public grant tracker.” Zamost also said they’ve been accepting requests via the form since April 2020, although there’s not much out there that would point you to it.
Those who do come across the Google Form will find a streamlined funding application. The form asks for a summary of the organization’s mission, the grant request amount, whether the grant is for general support or a specific project, whether the grant falls within one of Start Small’s four funding areas or “Other,” and how the funding will address a specific problem.
The fact that I was able to access Start Small’s Google document and email a team rep stands in contrast to the grantmaking of Dorsey’s fellow apex donor, MacKenzie Scott. While Scott (presumably) lists all of her grant recipients on the online publishing platform Medium, she does not list the grant amount, provide grantseekers with a point of contact, or allow funding requests. For that matter, most foundations don’t allow unsolicited proposals, either.
Unfortunately, that’s about where the open access ended. Start Small’s rep declined to answer other questions about the team’s composition, decision-making process, and other related procedural items.
6. Start Small is prioritizing nonprofits
“Why is #startsmall a[n] LLC?” Dorsey tweeted when announcing his plans last April, before answering his own question: “This segments and dedicates my shares to these causes, and provides flexibility.”
Using an LLC, donors can bankroll nonprofits, political organizations and for-profit enterprises with a social mission. This “kitchen sink” approach has captured the imagination of the tech billionaire class looking to tackle the world’s most vexing problems. Other donors who channel their giving through LLCs include Mark Zuckerberg (CZI), Pierre Omidyar (Omidyar Network) and Laurene Powell Jobs (Emerson Collective).
In the case of Start Small, it seems that nonprofit organizations and universities are the sole recipients so far. It’s hard to say for certain, but I didn’t come across any for-profit or political groups among the list of grantees.
It’s worth noting that even when a donor using an LLC offers a level of transparency, we basically have to take their word for it. There’s still no legally required documentation of what Dorsey’s up to, no publicly filed forms. For what it’s worth, we do have the word of Zamost, who told me that “all funding from Start Small is captured in the spreadsheet.”
7. Start Small is giving at a higher rate than most foundations
LLCs are also immune from the federally required minimum 5% annual payout rate required of foundations in order to keep their tax status. Theoretically, that means Dorsey could make the pledge and sit on the funds forever. Dorsey clearly isn’t doing so.
In fact, by some metrics, he’s outperforming private foundations, many of which, critics allege, have been far too stingy throughout the pandemic, while reaping the benefits of the longest bull market in history. Even with its surging assets, Start Small’s $425 million in grants accounts for a healthy 10.9% of its current value ($3.9 billion). Even looking solely at Dorsey’s $333 million in domestic donations, the figure is 8.5%.
8. Start Small is outperforming most foundations in key funding areas
Last May, NCRP’s Schlegel analyzed Dorsey’s early round of donations and concluded that his giving for marginalized people eclipsed that of most institutions in Candid’s dataset of the 1,000 top U.S. foundations, while also lamenting his tepid support for organizations engaged in “structural change work.”
I checked in with Schlegel via email to see if these trends still hold. “He’s doing much better than many foundations,” he said. Schlegel came to this conclusion after bucketing Start Small’s $354 million in domestic giving thus far into categories like BIPOC, defined as “funding that names BIPOC explicitly as beneficiaries in the grant description or organization name”; immigrants and refugees; and social justice strategies, which includes areas like civic engagement, community organizing and policy change. Schlegel then compared these figures with support from foundations in Candid’s dataset.
Schlegel found that Dorsey’s giving for BIPOC organizations (23% of all donations), immigrants and refugees (9%), and social justice strategies (30%), would put him in the 89th, 91st and 86th percentile of foundations, respectively.
Dorsey’s BIPOC-related giving increased from 11% to 22% since last May, while support for immigrants has stayed at about the same level. “It should indict the entire sector, though, that at just 9%, he’s dedicating more of his portfolio to immigrants and refugees than 91% of foundations,” Schlegel said. Notably, he pointed out that Dorsey has been giving “significantly more” to social justice strategies since last May.
The one area where Dorsey’s percentage of giving has dropped—from 78% to 59%—is support for marginalized people, a broad term that includes poor people, women, LGBTQ people and others. Schlegel attributes the decline to “a handful of big gifts for COVID vaccine development and dissemination since May—work which is, of course, universal in its intent if not in actual practice!”
Despite the decline, Schlegel noted that the 59% figure still exceeds NCRP’s Criteria for Philanthropy at its Best benchmark, which stipulates that funders should designate 50% or more of grant dollars for marginalized communities.