Philanthropy that doesn’t ask to you report, or comply, and “gifts” you way more than you asked for... Studying Mackenzie Scott’s YieldGiving
From NYT 2022 feature. Image: Israel G. Vargas
For non-profit radical organisations like ourselves, who try to keep a critical, civic distance from both market and state, philanthropic funding is always an option to be explored. Sometimes, as you network, affinities between interested parties can reveal themselves. We’re always on the lookout for those kinds of supporters - and often wonder how they can be bettered nurtured and developed.
Sometimes, philanthropists can profoundly change the terms of what this kind of funding can do. The key question that many raise (and most eloquently in the UK from Immy Kaur of Civic Square) is whether funding liberates or entraps organisations? Does the money respect and amplify the distinct imagination and practice of the donatee - or does it bolt them into “reporting” and “monitoring” categories that limit and cramp their action and development?
We’ve been hearing reports that the donations of MacKenzie Scott, the ex-partner of Amazon chief Jeff Bezos, are setting a new precedent for giving. Her Yield Giving organisation demands little or no “reporting back” to the donors; donations (or “gifts”) of a size that approaches the entire or yearly budget of donatee organisations.
Here’s a study on Scott’s giving from the Centre for Effective Philanthropy (website and PDF), noting the “more than $14 billion in unrestricted support given to more than 1,600 organizations” in the last three years alone.
The research is worth reading, but here’s the intro to the PDF in any case:
MacKenzie Scott has quickly become one of the most widely known philanthropists in the United States.1 In just three years, she gave more than $14 billion in unrestricted support to more than 1,600 organizations,2 stating that her aim “has been to support the needs of underrepresented people from groups of all kinds.” Her gifts have often come as a surprise to recipients, with no restrictions on how or when they must be used, and with few, if any, reporting requirements.
These gifts have been transformational for recipient organizations. This was a main finding of research we at the Center for Effective Philanthropy (CEP) conducted in 2022, the first year of a three-year study examining Scott’s giving. Leaders of recipient organizations described the significant impact these gifts had on their organizations’ ability to achieve their missions as well as on their long-term financial stability and organizational capacity.
As we reported then, “Many of the organizations are either more effectively able to serve their existing core constituency of marginalized communities or are expanding to serve additional communities.”
PRAISE AND CRITIQUE
Scott’s approach has been praised by many, including those in the media who have held it up as an example, particularly for what Giving Pledge billionaires should be doing with their wealth.
“Inside Philanthropy” noted that Scott “is certainly giving away a much greater portion of her wealth than any other donor or institution you could name.” Many, including nonprofit leaders, have touted the benefits of her approach. Rather than tell nonprofits how her gifts must be used, Scott has been clear that she wants the nonprofits to make those decisions, believing they know best what they and their constituents need.
While Scott’s gifts initially came with reporting requirements, albeit minimal, those requirements have recently been waived entirely for many, if not all, recipient organizations.
Scott’s approach has also been critiqued, however: for not being guided by what appears to be a clear strategy, for the one-time nature of her gifts, for the gifts being bigger than some believe recipient organizations can handle, and for a perceived lack of transparency.
“She owes her fellow citizens greater transparency over the power she’s wielding,” Stanford political science professor Rob Reich told “Bloomberg” in 2021. In December 2022, Scott’s team released a “searchable database of gifts” on the website for her charitable organization, Yield Giving. “If more information about these gifts can be helpful to anyone, I want to share it,” Scott wrote in a Medium post. “Yield is named after a belief in adding value by giving up control.”
SCOTT’S GIVING IN CONTEXT
Scott’s giving comes at a time of change in philanthropy. Since the beginning of the COVID-19 pandemic in 2020 and the national spotlight on racial injustice following the murder of George Floyd by police in Minneapolis, many funders have reported streamlining their processes to reduce the burden on grantees and providing more unrestricted support. Findings from two research studies published earlier this year by CEP indicate that grantees continue to experience those changes in 2023.
Yet Scott’s giving continues to stand in contrast to more common approaches to philanthropy. Her grants are differentiated by their size as well as their unrestricted nature, in terms of both how the resources can be deployed and the time period for their expenditure. The relative scarcity of meaningfully sized, unrestricted gifts has long been a source of frustration for nonprofit leaders. Within this context, the breadth and scale of Scott’s approach are unprecedented.
Key Findings:
Nonprofit leaders describe expanding and improving programs to pursue opportunities — often related to equity — resulting in what they increasingly see as demonstrable impact.
Nonprofit leaders describe using Scott’s grants to strengthen their organizations’ capacity and staff climate, translating into better support for the communities their organizations serve.
Funders generally express positive opinions about Scott’s giving, but many have concerns, particularly about the ability of nonprofits to handle large, unrestricted gifts.
Despite funder concerns, nonprofit leaders report few challenges or unintended negative consequences and are planning for the long term to minimize risks of a financial cliff.
More here, and see this report from the Independent.