Two years into CEP’s study of the effects of MacKenzie Scott’s grantmaking on the social change sector, the findings are overwhelmingly positive. Scott’s strategy of making multimillion-dollar gifts with no strings attached has led to significant, demonstrable benefits for the nonprofits she supports, the communities they serve, and the causes they advance.

To me, these findings aren’t surprising at all. Sadly, I also wasn’t surprised by another finding: Many funders remain quite skeptical of flexible giving.

A Fundamental — and Persistent — Disconnect

Although 80 percent of the funders in the CEP study laud Scott’s approach, “More than three-quarters of the interviewed funders express concern about nonprofits’ ability to handle large, unrestricted gifts.” Not only do they “express concern,” but some of CEP’s funder respondents shared their concerns in patronizing terms. This was especially true when these funders talked about grassroots organizations, which are often led by people of color, women, and members of other marginalized groups.

Learning from BUILD

As I compare the data on funder beliefs with the data on nonprofit experiences, I feel pretty frustrated. As director of the BUILD program at the Ford Foundation for the last seven years, I’ve led a foundation-wide initiative to award 5-year, highly flexible grants to more than 400 social justice organizations and networks in nearly 40 countries. An ongoing independent evaluation of BUILD has yielded findings similar to what CEP is finding in its research about the Scott grants: Organizations that have received BUILD grants are better able to plan and execute on their missions than before they received BUILD support. They are more financially stable, and more successful in leveraging support from other donors. They are better able to compensate and support their staff. And as a result, the evaluation reports, BUILD has contributed to increases in social impact.

With this evidence in hand, BUILD team members and I have met with hundreds of funders all over the world, urging them to shift their grantmaking toward larger, longer, more flexible grants. We argue that these grants strengthen leaders and institutions, leading to demonstrable impact. They also provide the basis for more trusting and equitable relationships between donors and doers. Ultimately, they may even help to shift the power in our sector in favor of social change leaders.

After countless articles, one-on-one meetings, and conference presentations, I remain amazed at how curious other funders are about BUILD. And CEP research does find that funders are giving more unrestricted support than they did prior to 2020.

Unfortunately, I’ve also been amazed at how many funders remain resistant to shifting their own practices.

Read the full article about flexible funders by Kathy Reich at The Center for Effective Philanthropy.