MacKenzie Scott is shaking up philanthropy's traditions. Is that a good thing?
With the Russian invasion of Ukraine, a series of devastating climate change-fueled events and high food and energy costs, 2022 was a year of significant turmoil. But at least in the philanthropy sector, there may be reason for optimism.
On December 14, 2022 billionaire philanthropist and novelist MacKenzie Scott announced that her donations since 2019 have totaled more than $14 billion and helped fund around 1,600 nonprofits. But as much as the scale, it is the style of giving that is causing a stir; it's targeted at a wide spectrum of causes, without a formal application process and — it appears — no strings attatched.
"I cried!" admits Katherine Williford, chief growth officer of the international nonprofit Water For People, recalling the day in August 2022 that their $15 million grant was confirmed.
Williford said the previous January, a representative of someone only referred to as a "high net-worth individual" interested in promoting health and equality contacted them.
"We walked them through our plans, visions, finances. Then after six months we get $15 million with no restrictions or reporting requirements. We even offered to send an annual report or an update on the funding but they said, 'We trust you.' I've never had that happen in all my years in fundraising."
It was only when the grant was confirmed that Scott was revealed as the donor.
As of December 2022, Scott was the fifth richest woman in the U.S. with an estimated fortune of about $26 billion. Scott divorced Amazon founder and executive chairman Jeff Bezos in 2019, and as part of the settlement, received a 4% stake in Amazon. That same year, she vowed to give away her "disproportionate amount of money" and to "keep at it until the safe is empty."
She rarely grants interviews and did not respond to a request for comment from NPR for this story. In keeping with her low-profile approach to gift-giving in the last several years, she has only vaguely explained her rationale for deciding whom to fund and, until December 2022, did not even have a website that tracked the gifts.
Initially, some potential recipients ignored Scott's representatives' emails or hung up on their calls, believing them to be scams or hoaxes. For many of Scott's recipients, it was the largest grant they have ever received.
The lack of information about Scott's team, method and decision-making process has invited some skepticism. Stanford University professor and co-director of the Center on Philanthropy and Civil Society Rob Reich told Bloomberg in 2021:
"She owes her fellow citizens greater transparency over the power she's wielding. Scrutiny does not mean condemnation; it just means we deserve to ask questions."
Scott appears to have taken this advice and in December, unveiled the website with a database listing her donations, with plans to detail the selection criteria and to launch a process for nonprofits to apply for grants.
Some experts like Sir Stephen Bubb, head of the Gradel Institute of Charity at the University of Oxford, say that the need for greater openness does not always apply.
"If it's public sector money then absolutely there has to be transparency and proper processes. If it's philanthropy I think a freer more interesting approach is appropriate," Bubb says.
Peter Grant, from Bayes Business School in London, agrees, saying it's important to not discourage people from making gifts. "The quicker and easier you make it to get that money out of your bank account and into things that are making the world better, then the more effective grant making will be," he says.
It doesn't appear that Scott has been deterred by critics, and in November 2022, she outlined that her giving was targeted toward "supporting the voices and opportunities of people from underserved communities." In 2020, she announced that she had already contributed more than $586 million to causes supporting racial equality. Most of the initial grants have been to U.S.-focused initiatives, but some are international in scope like a $15 million gift to VisionSpring, a social enterprise that provides low-cost eyeglasses to workers in sub-Saharan Africa and South Asia.
VisionSpring's CEO Ella Gudwin describes Scott's support as a "big win" for the sector. "This is believed to be the largest, single private donation toward solving the problem of uncorrected blurry vision as a poverty intervention," she says.
Most notable in Scott's gifts is the lack of any reporting requirements, something that nonprofit workers like Water For People's Williford heartily welcome.
"People don't realize how much time organizations spend on allocating restricted resources. A lot of people say, 'I want to make sure my money goes only to programming, not to overhead.' " But, she says that overhead is important — it's "salaries, fundraising and keeping lights on."
She also says that it is common for donors to have specific geographic preferences for their gift.
"If you get different restrictions, you are constantly having to reallocate resources and reserves."
Bubb says that an unrestricted approach is a blow against bureaucracy.
"Philanthropic foundations have been far too process-driven, deciding what's best for charities and making them jump through hoops with over-elaborate application arrangements."
A report by the Center for Effective Philanthropy (CEP), based on interviews with Scott's beneficiaries, found that the effects of the largesse have been "dramatically and profoundly positive." It outlines how organizations' initial concerns of not having the capacity to absorb such a large donation or deterring other donors, have largely been allayed. On the contrary, the report notes that leaders surveyed, "report a new sense of empowerment and agency."
(The CEP has previously received a grant from Scott but notes that the report did not receive any funding from her.)
Meanwhile, Williford and her colleagues at Water For People are able to concentrate on their goal of providing sustainable clean water access to everyone by 2030 and assist their expansion into Tanzania.
"Unrestricted donations in a vacuum is not the solution but the more that donors do trust-based philanthropy — building a relationship and doing due diligence — the more time can be spent on project delivery."
Andrew Connelly is a British freelance journalist focusing on politics, migration and conflict. He tweets @connellyandrew.
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