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HomeMarketMacKenzie Scott’s Unrestricted Gifts Transform the Organizations That Receive Them, Study Finds

MacKenzie Scott’s Unrestricted Gifts Transform the Organizations That Receive Them, Study Finds

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As of last spring, MacKenzie Scott had donated nearly US$13 billion in unrestricted gifts to 277 nonprofit organizations, transforming the ways the grantees function and reshaping philanthropy in the process, a new study shows.

Scott’s philanthropic endeavors began in the summer of 2019 with the announcement of large, unrestricted gifts to a wide-range of nonprofit organizations including the arts, women-led groups, from the Girl Scouts to Planned Parenthood and organizations that prioritize equity.

Scott’s approach has broken norms in the world of philanthropy, and many donors and nonprofit leaders are paying close attention to its impact. 

To better understand how effective her approach to giving has been in the past three years, the Center for Effective Philanthropy (CEP), a nonprofit based in Cambridge, M.A. that aims to help individual and institutional donors improve their effectiveness, analyzed data from the nonprofits and interviewed some 40 leaders from organizations responding to its survey this summer. 

Scott, 52, a novelist and ex-wife of Amazon founder
Jeff Bezos,
has an estimated net worth of US$26.2 million, primarily from her stake in Amazon. 

“Scott’s approach represented the most interesting experiment in philanthropy that we had seen in a long time, so we thought this is just naturally a fascinating experiment to see what happens when organizations receive gifts,” says Phil Buchanan, CEP’s president and co-author of the study, Giving Big: The Impact of Large, Unrestricted Gifts on Nonprofits, which was published last month.

The median grant size the nonprofits received from Scott was US$8 million—“80 times the size of the typical foundation gave,” Buchanan says. For 88% of responding organizations, this was the largest unrestricted grant ever received.

About 83% of respondents believe the grant they received from Scottwill significantly strengthen their organization’s ability to achieve its mission, and nearly two-thirds of nonprofit leaders surveyed say the grant will significantly strengthen their organization’s long-term financial stability, according to the study.

“Based on what we’ve learned so far, contrary to concerns that nonprofits might be overwhelmed and do not have the ‘absorptive capacity’ to handle these gifts, it looks like actually they were pretty clear what to do with the resources,” Buchanan says.

“They were thoughtful about allocating the resources across various categories of expenses including expanding their programmatic work or shoring up their long-term financial sustainability,” he adds.

Direct service organizations accounted for nearly half of the nonprofits Scott made donations to, which “may have been partly just related to the pandemic,” Buchanan says. “She was supporting food pantries and frontline organizations that were responding to that crisis,” he says.

The study also found that Scott’s unrestricted funds did not have the unintended negative consequences that some have speculated they might, specifically, that the gifts might deter other donors from funding those nonprofits, says
Ellie Buteau,
director of research projects at the CEP and co-author of the study.

“Both in the surveys and interviews, we really did not hear any significant unintended consequences that these nonprofit experienced as a result of receiving grants from Scott, at least not in the first year,” she says.

This is the first of a three-year study the CEP will conduct on the effectiveness of Scott’s approach to philanthropy. The nonprofit itself has received US$10 million from Scott, but the study was not directly funded by the grant, the CEP said.

Credit: marketwatch.com

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