MacKenzie Scott once required a $1,000 loan from her Princeton roommate to avoid dropping out of school. Now, the billionaire philanthropist is repaying this kindness through an innovative investment.
Scott, whose net worth is around $34 billion according to Forbes, has revealed she’s backing Funding U, a lending company started by that same roommate, Jeannie Tarkenton.
As a Princeton sophomore, Scott faced the possibility of dropping out without $1,000. Tarkenton found her crying and arranged for her father to loan her the money.
“I would have given MacKenzie my left kidney,” Tarkenton told the Associated Press. “Like, that’s just what you do for friends.”
Funding U offers merit-based loans to low-income students without co-signers. The company uses algorithms to evaluate transcripts and internships rather than credit histories.
Scott provides most of the “junior debt” that reduces risk for larger bank investments. She’s among philanthropists who provide 30 cents for every dollar loaned.
These funders lend at concessionary rates, accepting lower returns and longer repayment periods. The remaining 70% comes from banks meeting federal community lending requirements.
“I wanted to combine capital from people who were participating in this because they cared about the underlying person,” Tarkenton said, AP reported. She acknowledged philanthropy alone couldn’t address the scale of the problem.
Since her 2019 divorce from Amazon founder Jeff Bezos, Scott has donated over $19 billion. Her gifts focus on equity, higher education, and economic security.
In October, Scott described Funding U loans as “generosity- and gratitude-powered” in an essay about kindness. She noted Tarkenton’s college loan among personal kindnesses that influenced her giving.
“[Scott is] looking for innovative ways to create opportunity for those that don’t have it,” said Marybeth Gasman, who runs Rutgers’ Center for Minority Serving Institutions, AP reported.
Tarkenton emphasizes the venture isn’t purely philanthropic. Scott will eventually recoup her investment, just as she repaid the original Princeton loan.
“I think philanthropists can get a little messier and do more with their money,” Tarkenton said, per AP. “I’m all about pushing philanthropists in a very aligned way.”
Gabrielle Fitzgerald, whose nonprofit Panorama tracks Scott’s giving, called the investment consistent with her education access goals.
“It shows that she’s using all the tools at her disposal to pursue her goals,” Fitzgerald said, according to AP.
