Why trust may be the main piece in MacKenzie Scott’s unrestricted $4 billion to 350+ organizations

By now, many- especially in the nonprofit and philanthropy space- have heard of MacKenzie Scott’s record-breaking donation to 350+ organizations totaling over $4 billion, and all within a matter of months (July- Dec 2020). If you haven’t, here’s an insightful piece in her own words on her philanthropy. 

Many have written about the merits of her giving; the imperative that she must give due to systemic racism; the fact that she’s Jeff Bezos' ex-wife and has therefore acquired a fortune.

But what I’m most interested in, and what I’m fascinated by is HOW she chose the nonprofits to support. 

Why? Because in my opinion, that’s the secret sauce. The method she employed has the potential to pave the way for future giving, by providing a framework for nonprofit support to evolve.

Almost all of us would agree with MacKenzie Scott that this pandemic has absolutely devastated countless American lives, and crippled entire communities. And, it has been infinitely worse for women, people of color, individuals in traditionally marginalized communities, and for people living in poverty. Yet- and I respect that she makes this statement right up front in her piece- the wealth of billionaires has grown substantially during the same time (her family background included).

MacKenzie Scott writes, and I agree, “that anyone’s personal wealth is the product of a collective effort, and of social structures which present opportunities to some people, and obstacles to countless others.”

So, she decided to start giving it away, and will continue until “the safe” is empty.

She selected over 350+ organizations from an initial 6-7000 and when she offered the funds, she did so with no restrictions attached. That is certainly not what the majority in the nonprofit world is used to. Game-changing, unrestricted, no- holds- barred giving is rare. 

So, how did MacKenzie Scott decide on these few out of so many, and what organizational assets (not speaking of money here) needed to be in place so these funds could be provided unrestricted?

Well, first, she didn’t do it alone.

She and her team called upon hundreds of field experts, funders, non-profit leaders, community experts, and volunteers with decades of experience. She called upon our very own nonprofit and social scientist peers to help her decide. This is smart philanthropy- because no one knows better than the people in the trenches every day driving impact in underserved communities. 

The team then “leveraged this collective knowledge in a collaboration that included hundreds of emails and phone interviews, and thousands of pages of data analysis on community needs, program outcomes, and each non-profit’s capacity to absorb and make effective use of funding.”  This is key because it highlights due diligence and the objectivity they employed as a whole. Why is this critical to the nonprofit world? Because just like many other industries, nonprofits can also be plagued with the framework of being at an advantage based on who you know, rather than being strictly or equally evaluated on the strength of your organization and programming. This can have serious ramifications.

Second, this team was guided by a data-driven approach. “When research is data- driven and rigorous,” Mackenzie Scott shares, “our giving process can be human and soft.”

Wow. This is powerful for so many reasons, providing incredible insight for nonprofits to grow and evolve.

Mackenzie Scott and her team began with an initial 6,490 organizations and undertook deeper research into 822. Of the 822 they “put 438 on hold due to insufficient evidence of impact, unproven management teams, or to allow for further inquiry about specific issues such as treatment of community members or employees.” MacKenzie Scott knows it’s impossible to eliminate every risk through their analysis, but the process will eliminate many.

Nonprofits, and in particular fundraisers and development staff, work tirelessly looking for, assessing, and securing resources to fulfill missions. It is a cyclical process that is constantly in motion with absolutely no downtime. While program teams are the heart of the organization, development staff are the lifeline as they traverse the funding world for resources that cover most, if not all the expenses of an operating budget, from salaries (which account for the bulk of nonprofit budgets) to office supplies (down to the last staple). 

If done at the highest degree of excellence, development staff and fundraisers are stewards of supporters’ social investment. 

However, the reality is that many nonprofit functional teams work in silos, and development and fundraising staff spend much of their time jumping through hoops to secure and maintain funding.

Why?

There are countless reasons for this, but four big ones that surface time and time again have already been outlined above (by MacKenzie Scott’s Advisors and subject matter experts). Finding ways to empower organizations to get uncomfortable and look internally to find some basic opportunities and solutions to these organizational challenges, can open the door to major, game-changing, unrestricted support that can be replicated by teams and enable more organizations to get off the hamster wheel.

These include: 

1)    Insufficient Evidence of Impact (Practices in place to measure and evaluate programs)

2)    Unproven Management Teams (Strong and skilled Leadership and Management)

3)    Treatment of Community Members (Service and commitment to program participants/clients as paramount)

4)    Treatment of Employees (A healthy organizational culture)

I’m thankful to MacKenzie Scott’s share regarding her process through this initial phase of her impactful giving, because it has the potential to remind organizations that ideas, initiatives, and missions require thoughtful and strong operational systems and processes and a healthy organizational culture to execute them. And, above all, they must always be client/participant centric.  For a nonprofit to truly thrive, and be ready for an opportunity, these must be considered and improved alongside the interdependence of the development department and fundraising. 

It is true that the disproportionate wealth we are seeing has created the need for so many of the nonprofits in American communities (last count was 1.5 million), and in many ways, there is no one better equipped to solve those issues than the community based organizations (CBOs) in those very communities. But what we also know is that many nonprofits must get their houses in order and ensure they are in a position that merits the funds they seek. This doesn’t mean everything must be aligned, nor in most cases will they be, but the framework and foundation must be there. Until we as a sector can do our own organizational due diligence and make the hard decisions that have the capacity to improve things internally, we can’t expect objective funders to simply believe the organization will be scaled effectively.

But here’s the great news- MacKenzie Scott (and there will be more like her) is just starting her philanthropy work. She and her Advisors are looking for more nonprofits, and we know what process they're using to trust their social investment is as impactful as possible.

Remember, MacKenzie Scott and her team are being guided by subject matter experts including community leaders, nonprofits, funders, and volunteers with decades of experience who know exactly what they’re looking for: a strong/promising nonprofit that can show evidence of impact, a proven management team, a client/program participant centric approach, and a strong organizational culture.

Why?

So they can provide the unrestricted funds that are needed to scale the organization effectively, and then get out of the way. 

I don’t know about you, but that’s music to my ears!