When billionaires divorce, they don't only split what they own; their philanthropy endeavors are often central to divorce negotiations.
For instance, when two spouses are on the board of a charitable foundation, negotiations will have to settle who stays on the board and who has to leave. Sometimes, a single charitable trust has to be divided into two separate trusts. Scenarios can be endlessly complex, and only a savvy attorney specializing in divorce involving philanthropy can help.
As prominent billionaires and philanthropists divorce, we see more of these complex scenarios in the public sphere.
Lately, some of the most affluent couples on the planet have split, and one of the spouses has decided to donate most of their fortune to charity. This is true of MacKenzie Scott and Melinda Gates, the ex-wives of the founders of two of the world's largest tech companies, Amazon and Microsoft.
In a New York Times op-ed back in May, Melinda Gates announced that she would step down from her role at the Bill and Melinda Gates Foundation and contribute a billion dollars to advancing women's rights on a planetary scale.
When their divorce was announced in 2021, Bill and Melinda Gates sent a clear message: the fact that they were splitting up wouldn’t change the dynamics at the foundation. “Their roles as co-chairs and trustees are not changing, and they will still set the agenda for the organization that bears their names,” the New York Times reported. Whoever believed that sounded too good to be true was absolutely right.
The Settlement Agreement
Imagine a scenario where Bill and Melinda realized they couldn't run the foundation together and hadn't anticipated that possibility in their divorce agreement. That would have been disastrous, especially for Melinda.
Fortunately, the agreement included a provision that established what would happen if things went awry. If Melinda Gates resigned, as per the agreement, “Gates would essentially buy her out of the foundation, one of the world’s largest private charitable organizations, and she would receive resources from him to do her own philanthropic work.”
As it turns out, not all was harmony in Seattle, and Melinda was set free to handle her philanthropy as she saw fit. “I will leave the Bill & Melinda Gates Foundation, of which I was a co-founder almost 25 years ago, to open a new chapter in my philanthropy,” Gates wrote last May. “To begin, I am announcing $1 billion in new spending over the next two years for people and organizations working on behalf of women and families worldwide, including on reproductive rights in the United States.”
It would seem that these affluent women are frustrated with the bureaucracy of complex philanthropic organizations and want to independently fund initiatives that are close to their hearts.
Women and Philanthropy
According to research by Katherine E. Loer, “women are the drivers of their families' philanthropic decisions. Women give more than men. And when they give, they give differently. And yet, most nonprofits and educational institutions are still using tried and true fundraising practices that either alienate women, or gain only minimal support from them.”
One might think the Bezos and Gates of the world wouldn't feel this way. But there is evidence to the contrary. Researchers have found that women are better at philanthropy than men.
In the words of The Nation's Tim Schwab, “Gates’s vast wealth could help the world in far-reaching ways, for example, if it were redistributed as cash gifts to the poor. That can’t happen through the Gates Foundation’s father-knows-best, look-at-me brand of bureaucratic philanthropy.”
The brand of direct philanthropy MacKenzie Scott and Melinda Gates propose is a far cry from that exercised by their former husbands.
Bezos’ new wife told Vogue last year that she immediately called the authorities to see how she and her husband could help after wildfires devastated the island of Maui; Bezos followed up by announcing he would donate $100 million to help rebuild what had been destroyed. So far, however, he has only given $15.5 million. In 2022, the former Amazon CEO told CNN that he was planning to give away most of his multibillion-dollar fortune. But he has done no such thing.
Schwab has commented, “Thousands of news stories have profiled Bill Gates’s generosity over the last two decades. Essentially every day, headlines remind us of his private foundation’s largesse: a million dollars here, a billion dollars there.” But, The Nation's journalist writes, “The one-sided storytelling about Gates’s selfless philanthropy has created a dangerous mythology... After two decades of philanthropic giving, Bill Gates continues to be one of richest people on the planet.”
The math just doesn't add up. Melinda Gates' editorial implies that women cannot wait for men to decide when to further their causes. “The second the global agenda gets crowded, women and girls fall off,” she wrote, adding that research has shown just how beneficial investing in women and girls can be for any economy.
Gates cited a rather shocking statistic: only approximately 2 percent of charitable giving in our country goes to organizations dedicated to women's issues, and only 0.5 percent goes to initiatives focusing on women of color.
Melinda Gates Takes Control
Embracing the new chapter in her life as an opportunity, Gates has allocated twelve $20 million grants to “people whose work I admire” to distribute as they see fit. Recipients include New Zealand's former PM, Jacinda Ardern, maternal-health advocate Allyson Felix, and Shabana Basij-Rasikh, whose work focuses on girls' education in Afghanistan.
Melinda Gates' announcements didn't stop there. She said she would fund a $250 million initiative focusing on the health of girls and women on a global scale.
Meanwhile, MacKenzie Scott has already given away over $16.5 billion since her divorce from Bezos. After an open call for applications, she pledged $640 million to 361 small nonprofits. Scott's organization supports initiatives such as early learning, social engagement, environmental justice, and gender identity projects.
The cases of Gates and Scott are different, as Melinda was already a prominent philanthropist before her divorce. MacKenzie may be a new philanthropist, but she has quickly risen to the top of the list. With sound legal strategies and smart negotiations, both women were able to keep a significant portion of the marital wealth and dedicate it to many worthy causes.