Discussions of MacKenzie Scott’s unconventional approach to giving tend to devolve into binaries. Scott’s doling out of massive, unrestricted gifts — some $14 billion to 1,600 nonprofits so far — is presented by some as the philanthropic holy grail, to be emulated by all. Others, including many foundation staff with whom we have talked, have (often quietly) dissed her approach as un-strategic or, worse, likely to yield myriad unintended negative consequences.
These simplistic narratives are unhelpful.
Let’s dispense with the first narrative first. Scott’s approach is unique to her personal context — few people on earth have her resources and the accompanying access to outsourced vetting of potential grantees. Moreover, she, unlike many donors, appears more interested in building strong organizations across a wide range of areas of work than focusing in on a particular issue or problem, like climate change or a specific disease. Yet there is, as we imagine she might agree, a place for foundations and donors that develop expertise in specific areas and there is even a place for program-restricted grants (though they shouldn’t be the default, as they have been for many foundations).
So, it’s just overly simplistic to suggest, as some have, that Scott’s giving somehow renders staffed foundations obsolete or that it is something all should emulate — even as her approach does hold lessons for donors of all stripes (more on that in a moment).
Now to the second narrative. We have talked with foundation staff who have told us Scott’s approach is “a disaster.” When we push to understand better, we hear worries about three kinds of unintended negative consequences: 1) her grantees’ ability to responsibly steward resources, or make a continued case for support from past (or potential) funders 2) the fate of organizations that didn’t receive funding in fields or geographies Scott supports (both that they don’t know how to approach Scott and that the lack of a grant from Scott could be seen as a death knell); 3) and, related, the relationships among nonprofits as well as between nonprofits and their funders in the fields in which she makes grants.
On the third point, we have even heard some foundation leaders confess that they’re concerned their own influence on their grantees that received funding from Scott will be diminished because these nonprofits will be less dependent on them and, therefore, less malleable. (Really.) This strikes us as likely more of an intended consequence than an unintended one (given Scott’s references to “yielding” power) and, perhaps not surprisingly, recipient nonprofits themselves tend to see this rather differently: as a healthy and overdue re-balancing.
Regardless, these issues are worth studying, which is why the Center for Effective Philanthropy (CEP) has set out on a three-year effort to look at the effects of Scott’s giving. We have completed only the first year of this study, and so there is much yet to learn, but we have already developed some strong evidence to suggest that the worries about unintended negative consequences are, at least so far, not coming to fruition.
Moreover, we think some lessons that apply to foundations as well as individual donors of various stripes are clear already. Even those who have deep concerns or serious critiques of Scott should, we hope, be able to gain some useful lessons from what she’s doing. We’re not suggesting everyone emulate Scott. We’re suggesting everyone can learn something from what is the most interesting natural experiment we have seen in our time working in philanthropy.
- The first lesson is that giving big to trusted nonprofit organizations and their leaders is experienced as transformative by recipients.
- The second, related, lesson of Scott’s approach is to recognize that the health of nonprofit organizations matter — and working to strengthen them can be strategic.
- A third lesson is that a nonprofit’s people — often disparaged or seen (absurdly) as “bloat” — matter tremendously.
- A fourth lesson is that if we care about equity — racial equity, gender equity, equity for LGBTQ+ people, equity for all — we can (and must) use our philanthropic giving to aggressively pursue those goals.
Read the full article about lessons from MacKenzie Scott’s approach by Phil Buchanan and Ellie Buteau at The Center for Effective Philanthropy.