Twitter co-founder and chief executive Jack Dorsey said Tuesday he was committing $1 billion of his personal fortune to coronavirus relief through his philanthropic fund.
Dorsey, 43, revealed in a series of tweets that he would transfer his equity in his digital payments group Square to his limited liability corporation Start Small, contributing around 28 percent of his overall wealth.
Dorsey’s first pledge went to an initiative co-founded by actor Leonardo DiCaprio.
The move could be the largest from a single individual for coronavirus relief and comes with the pandemic spanning the globe and inflicting a heavy toll in lives and economic devastation on the United States.
Coronavirus deaths in the United States soared over 12,000 on Tuesday.
Twitter CEO Jack Dorsey is donating more than a quarter of his wealth for COVID-19 relief efforts, in what could be the largest from a single individual for coronavirus relief
Twitter CEO announced on Tuesday in a thread that he will donate around 28 percent of his wealth to aid efforts during the global pandemic and will now make his donations all public
‘Why now? The needs are increasingly urgent, and I want to see the impact in my lifetime,’ Dorsey said.
‘I hope this inspires others to do something similar. Life is too short, so let’s do everything we can today to help people now.’
Dorsey said that after the pandemic ends, the fund would focus on health and education for girls and ‘universal basic income’ efforts.
Dorsey, who is CEO of both Twitter and Square, has created a foundation as well as the Start Small LLC.
The model is similar to that established by Facebook founder Mark Zuckerberg in his Chan-Zuckerberg Initiative, allowing for flexibility in funding startups and efforts a foundation may be ineligible to fund.
Twitter co-founder Dorsey explained his actions via the social media platform on Tuesday
Dorsey said that the fund would focus on girl’s health and education once the global coronavirus pandemic is over and highlighted them as ‘existential problems facing the world’
Dorsey revealed that all information about his donations in the future will be made public
‘Why is #startsmall a LLC? This segments and dedicates my shares to these causes, and provides flexibility,’ Dorsey said.
A document link tweeted by Dorsey showed the new fund had already pledged $100,000 to a new initiative called America’s Food Fund launched by Laurene Powell Jobs, the widow of Steve Jobs, and actor Leonardo DiCaprio.
Dorsey’s net worth is estimated at about $3.3 billion by Forbes, including his stake in Twitter and Square.
He said he chose to use his equity from the payments group because ‘I own a lot more Square’.
Dorsey also said that he would pace the sale of the pledged shares over time.
‘The impact this money will have should benefit both companies over the long-term because it’s helping the people we want to serve,’ he said.
Dorsey is to donate the money mostly from his equity shares in Square and not Twitter
The Twitter co-founder also released a document where his donations can be tracked, revealing that his first $100,000 had been contributed to an initiative co-founded by Laurene Powell Jobs, the widow of Steve Jobs, and actor Leonardo DiCaprio
Dorsey, who for years has kept details of his charitable efforts private, said all donations to and from the fund would now be visible to the public at all times through a public document.
Other technology entrepreneurs have pledged relief efforts in varying amounts.
Amazon founder Jeff Bezos has pledged $100 million to help food relief efforts during the pandemic, and Zuckerberg has offered more than $25 million to help research through the Bill & Melinda Gates Foundation.
The Gates Foundation last month pledged $125 million for research but is believed to be investing more in a variety of projects.
The United States has recorded more than 380,000 coronavirus cases, with the total death toll rising to more than 12,000.
Twitter Inc pulled its first-quarter revenue outlook and forecast an operating loss in late March as the coronavirus outbreak crimped ad sales, but said the pandemic boosted the number of active users on the microblogging platform.
The outbreak has made social media services such as Twitter vital for a broader population than usual, as people look to stay abreast of the latest news from authorities and keep in touch with friends virtually.
But many advertisers have pulled marketing budgets to rein in costs because of the virus-related uncertainty, and others are hesitant to advertise alongside coronavirus discussions for fear of associating their brands with the sensitive topic.
‘The COVID-19 impact began in Asia, and as it unfolded into a global pandemic, it has impacted Twitter’s advertising revenue globally more significantly in the last few weeks,’ Chief Financial Officer Ned Segal said in a statement.
Twitter was the first major ad-supported U.S. platform to disclose the impact of the coronavirus.
The warning from Twitter came two weeks after it reached an agreement with Elliott Management that Jack Dorsey to stay on as chief executive and added three new directors.
Elliott and its billionaire founder billionaire Paul Singer acquired a $1billion stake in Twitter on February 28 and launched a campaign to remove Dorsey after the CEO announced last fall that he would be moving to Africa in mid-2020.
Among Singer’s concerns about Dorsey was his divided attention between his roles at Twitter and Square, the payments company he co-founded.
Investors also raised concerns over how Dorsey would run both companies if he was to move to Africa for half a year.
Elliott, which owns about four percent of Twitter’s stock, was planning to nominate four people to its eight-member board when three of the company’s directors stand for election at its upcoming annual shareholder meeting, sources told Reuters last month.
Twitter reached an investment deal with Silver Lake and Elliott Management in March that would keep Jack Dorsey (pictured) as the social media company’s CEO after an ousting effort
Singer, a Republican mega-donor, planned to use his $1billion stake in Twitter to push for many changes, starting at the top by removing Dorsey and nominating four board members
The new deal with Silver Lake appears to have quashed the threat of Dorsey’s removal. It does not specifically mention changes to his role.
As part of the agreement, Twitter had pledged to grow daily users by 20 percent or more in 2020 and beyond, roughly in line with user growth in its fourth quarter.
Twitter said total monetizable daily active users (mDAU) jumped 23 percent to 164 million quarter-to-date, driven by the conversation around COVID-19, as well as ongoing product improvements.
‘We’re seeing a meaningful increase in people using Twitter,’ Dorsey said.
The company said it expects first-quarter revenue to be down slightly on a year-over-year basis. It had earlier estimated revenue to be between $825 million and $885 million, an 8.6 percent rise from a year earlier at the midpoint.
The company is scheduled to announce its results on April 30.