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It is one of the ideas with the greatest currency in philanthropy right now: More funders need to make large, unrestricted grants, and then trust nonprofits to use them well. Despite all the dialogue, however, the practice is still all too rare. Giving in this way still feels “risky” to many donors.
What actually happens when nonprofits receive large, unrestricted grants? The Center for Effective Philanthropy’s (CEP) recent examination of MacKenzie Scott grantees, along with complementary research by Panorama Global, sheds light on this question. (In the interest of transparency, it is worth noting Bridgespan is among Ms. Scott’s advisors, but was not involved in either CEP or Panorama’s research efforts.) The emerging empirical answer, per CEP’s report — is that “the effects have been dramatically and profoundly positive.” This creates grounds for optimism that giving in this way has breakthrough potential.
These are early observations, given the recency of the grants, the studies’ authors rightly note. Many wonder if a “lottery curse” akin to jackpot winners entering into “periods of wild spending” (as IDinsight’s Ruth Levine framed it) might manifest over time. To begin to flesh out that longer-term picture, we’d like to add another dataset to this growing body of insights.
Five years in, the story holds
In 2017, Ballmer Group made large, unrestricted grants to 21 U.S. nonprofits working to advance economic mobility. At the time, Ballmer Group was two years old and exploring ways to help organizations rapidly scale. Compared to the Scott sample CEP studied, Ballmer Group grants were similar in that they were large relative to the grantees’ size, lacked donor restrictions, and were a surprise to the grantees.
There were also some differences. Ballmer Group grantees’ median pre-grant budget ($21 million) was more than twice as big. The grants were disbursed evenly over five years (versus offered all up front for Scott grantees). And, at the time of the initial five-year commitment, grantees were told there was a possibility of renewal (Ballmer Group recently wrote about many of these renewals and lists all of their grants on their website).
Earlier this year, we interviewed leaders from 18 of these Ballmer Group grantees and studied public data for all 21 to understand their experience over the initial five-year grant period. Ballmer Group neither funded the research nor endorsed the findings. (In transparency, Bridgespan advised Ballmer Group on their sourcing and diligence for the initial grants and over time has provided independent strategic support to a handful of the grantees.)
Our findings were strikingly similar to CEP’s. By and large, the challenges donors often hypothesize that large, unrestricted grants will create — such as leadership team overload, internal culture tensions, strain in relationships with peer organizations, and hampered ability to fundraise — did not materialize. Instead, we heard that the funds created space for leaders to lead, built morale within the organization, allowed for re-granting or other forms of collaboration across the broader field, and served as a “vote of confidence” in conversations with other donors. Leaders were almost unequivocally positive about their grant experience.
Read the full article about large, unrestricted grants by Kathleen Fleming, Anthony Michael Abril, and Jeff Bradach at The Center for Effective Philanthropy.