NEW YORK (AP) \u2014 MacKenzie Scott, one of the world\u2019s wealthiest women and most influential philanthropists, is now known for her \u201cno strings attached\u201d surprise grantmaking. But, as a Princeton University sophomore, she learned what it was like to be on the receiving end of generosity.<\/p>\n
Facing the prospect of dropping out if she couldn\u2019t come up with $1,000, Scott was crying when her roommate, Jeannie Tarkenton, found her and got her dad to loan Scott the money.<\/p>\n
\u201cI would have given MacKenzie my left kidney,\u201d Tarkenton told the Associated Press recently. \u201cLike, that\u2019s just what you do for friends.\u201d<\/p>\n
Today, Scott\u2019s net worth<\/a> is around $34 billion, according to Forbes. In October, Scott wrote<\/a> that Tarkenton\u2019s 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.<\/p>\n A quarter century passed between the end of their sophomore year and Funding U\u2019s creation, a period when Tarkenton realized just how many more students were being pushed into her former roommate\u2019s position by the rising cost of college. That Scott took an interest in her old friend\u2019s mission to help economically disadvantaged students finance school is unsurprising. Her unusual gifts<\/a> \u2014 which she rarely discusses or discloses outside of essays and a database on her website, Yield Giving \u2014 tend to focus on issues of equity<\/a>, higher education<\/a> and economic security.<\/p>\n But the revelation of Scott\u2019s Funding U support offers a new glimpse into her investments. Scott wrote last year<\/a> that she would invest in \u201cmission-aligned ventures\u201d led by \u201cundercapitalized groups\u201d that focus on \u201cfor-profit solutions\u201d to the challenges that her philanthropy seeks to address. However, this is among the few confirmed publicly.<\/p>\n \u201cShe\u2019s looking for innovative ways to create opportunity for those that don\u2019t have it,\u201d said Marybeth Gasman, who runs Rutgers\u2019 Center for Minority Serving Institutions and follows Scott\u2019s donations. \u201cI have to say, as somebody who went to school on a Pell Grant and who came from an extremely low-income family, that\u2019s really meaningful.\u201d<\/p>\n Amplifying impact<\/p>\n Scott, in many ways, resembled the exact students that Funding U seeks to serve. Tarkenton recalled the undergraduate Scott as a \u201chardworking student with very good grades\u201d who was \u201chighly focused\u201d and had already been accepted into a competitive program.<\/p>\n Her lending company plugs those sorts of details \u2014 student transcripts and internship experiences, for example\u2014 into an algorithm that determines the likelihood applicants will complete college, get a job and make enough money to pay back the loan.<\/p>\n Tarkenton suggested that this formula is fairer \u2014 and more predictive \u2014 than existing criteria that determine loan eligibility based on the credit histories of students or their co-signers.<\/p>\n Scott provides most of the \u201cjunior debt\u201d they use to reduce the risk for larger investments from banks such as Goldman Sachs, according to Tarkenton. She is among a handful of philanthropists who provide 30 cents for every dollar that Funding U loans. These funders lend at concessionary rates, meaning they make less money back than the market suggests they should and wait a longer period of time to recoup the money.<\/p>\n Funding U gets the other 70% from banks, who support them to comply with federal laws aimed at preventing anti-poor discrimination by requiring banks to make loans that benefit their communities.<\/p>\n \u201cI wanted to combine capital from people who were participating in this because they cared about the underlying person,\u201d Tarkenton said, \u201cand also, knowing that scale of philanthropy wasn\u2019t quite big enough, bring to the table some sort of market solution alongside that capital.\u201d<\/p>\n A philanthropic endeavor? <\/p>\n Tarkenton is clear: the endeavor isn\u2019t philanthropic. Funding U is a company, after all, and Scott will eventually get her money back \u2014 just as she repaid Tarkenton\u2019s informal loan all those years ago at Princeton.<\/p>\n But the approach represents a model that Scott\u2019s former roommate thinks more philanthropists should embrace. Tarkenton said there\u2019s more space for the likes of Scott to \u201cbring a spirit of investment\u201d that serves a \u201cgreater good\u201d but isn\u2019t purely charitable.<\/p>\n \u201cI think philanthropists can get a little messier and do more with their money,\u201d Tarkenton said. \u201cI\u2019m all about pushing philanthropists in a very aligned way.\u201d<\/p>\n It\u2019s why she started Funding U. Working at an Atlanta-based adult literacy nonprofit, Tarkenton said she noticed persistent disparities in degree completion rates based on socioeconomic status. She found the problem too big for philanthropy to solve. But the need was too small for most market players to care about addressing, she said.<\/p>\n Scott described the Funding U loans as \u201cgenerosity- and gratitude-powered\u201d in an Oct. 15 essay about the ripple effects of kindness. <\/p>\n Panorama founder Gabrielle Fitzgerald, whose social impact nonprofit tracks Scott\u2019s giving, said the investment is \u201cvery consistent with her approach to ensuring students have access to higher education.\u201d She said many funders see impact investing as a critical part of their giving portfolios.<\/p>\n \u201cIt shows that she\u2019s using all the tools at her disposal to pursue her goals,\u201d Fitzgerald said. <\/p>\n And the full circle impact of Tarkenton\u2019s college-era loan?<\/p>\n \u201cIt\u2019s a really lovely story in a time when we\u2019re not seeing a lot of kindness and generosity,\u201d Fitzgerald added. \u201cAnd just a reminder that helping your fellow humans is both a good thing to do at the time and something that could have a massive impact down the road.\u201d<\/p>\n ___<\/p>\n Associated Press coverage of philanthropy and nonprofits receives support through the AP\u2019s collaboration with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content. For all of AP\u2019s philanthropy coverage, visit https:\/\/apnews.com\/hub\/philanthropy<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"NEW YORK (AP) \u2014 MacKenzie Scott, one of the world\u2019s wealthiest women and most influential philanthropists, is now…\n","protected":false},"author":2,"featured_media":314944,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[12300,28,526,10502,162040,793,851,162039,1168,14734,35992,795],"class_list":{"0":"post-314943","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-amazon-com","9":"tag-business","10":"tag-education","11":"tag-education-funding","12":"tag-gabrielle-fitzgerald","13":"tag-general-news","14":"tag-inc","15":"tag-jeannie-tarkenton","16":"tag-jeff-bezos","17":"tag-philanthropy","18":"tag-the-goldman-sachs-group","19":"tag-u-s-news"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/314943","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=314943"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/314943\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/314944"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=314943"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=314943"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=314943"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}