Snap co-founder Evan Spiegel and his wife, supermodel Miranda Kerr, recently made a multimillion-dollar donation that will cover $550 million in medical debt for more than 261,000 Californians. Interestingly, this complex philanthropic model was pioneered by MacKenzie Scott, the ex-wife of Jeff Bezos, who has donated over $26 billion to over 2,700 nonprofits through her Yield Giving platform. Using a highly effective “giving playbook” for effective nonprofits, Spiegel emulates the strategy that turned Scott into the most prolific philanthropist of his generation.
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Snap founder Evan Spiegel follows Scott’s modelThe donation was made to Undue Medical Debt, a nonprofit organization that has gained national prominence thanks in large part to Mackenzie Scott’s early, significant investments. The massive debt relief effort will target vulnerable residents across the state, with San Diego and Los Angeles counties receiving the largest share of aid.Between 2020 and 2022, Scott donated a total of $80 million to the organization, helping the one-time nonprofit pay off more than $40 billion in medical debt in all 50 states. Spiegel’s strategy mimics Scott’s signature approach: identify scalable organizations, provide massive, unlimited capital, and leverage unique market opportunities for maximum impact.“The scope of this gift to Californians is truly astounding, freeing more than a quarter of a million families from more than half a billion dollars in unpaid medical debt,” said Allison Sesso, president and CEO of Undue Medical Debt.A unique way to cancel medical debtThe mechanism that drives this exponential impact lies at the intersection of distressed debt markets and dysfunctional American healthcare. Hospitals routinely sell large portfolios of patients’ bad debts to debt collectors for pennies on the dollar. Undue Medical Debt is entering this market as a mainstream buyer, purchasing these portfolios at equally deep discounts. However, instead of trying to collect the money, the organization will permanently cancel the debt.Beginning in mid-July, eligible Californians began receiving letters informing them that their medical debt had been paid off. Assistance is targeted at residents whose medical debt threatens their access to essential health care and economic stability.