The positive effects of MacKenzie Scott’s massive, unrestricted gifts are increasingly apparent and, to date, the experiences of recipient organizations belie widespread concerns about negative unintended consequences from her approach. These are among the key insights of a new CEP report released today, entitled Emerging Impacts: The Effects of Mackenzie Scott’s Large, Unrestricted Gifts.
Our report is based on a large-scale survey of grantees as well as in-depth interviews with a subset of organizations. We also interviewed funders to understand their take on Scott’s approach. To our knowledge, this represents the largest effort to study Scott’s giving.
The new report builds on last year’s Giving Big: The Impact of Large, Unrestricted Gifts on Nonprofits, in which we reported that Scott’s large, unrestricted gifts were experienced by recipient organizations as transformative.
Nonprofit leaders continue to report that they are using Scott’s funds to create impact through their programmatic work and within their organizations. Nonprofit leaders describe expanding and improving programs to pursue opportunities with this funding — often related to equity — resulting in what they increasingly see as demonstrable impact. One leader we interviewed described using the funds from Scott to launch a program to “develop an entrepreneurial leadership camp for Black and brown business owners or those who are budding entrepreneurs. … We’re now in our third year,” the leader notes, “which was going to be it for us because that was the extent of the grant dollars, but we received additional grant dollars and additional media attention. It’s been very successful.”
Nonprofit leaders also describe using Scott’s grants to strengthen their organizations’ capacity and staff climate, translating into better support for the communities their organizations serve. Eighty-eight percent of nonprofit organizations that we interviewed described the grant improving morale, feelings of empowerment, or capacity to think creatively for both staff and leadership — all toward better serving the organization’s mission. One nonprofit leader described how using a portion of their organization’s Scott money to create a 401K plan resulted in changes in their staff culture: “Retention has totally shifted … because of the benefit package that we have. I think the grant has done tremendous things for every aspect — leadership, employee morale, other services that a service worker is getting now because of it.”
Funders generally express positive opinions about Scott’s giving, but most also communicate concerns, particularly about the ability of nonprofits to handle large, unrestricted gifts. Most funders interviewed — more than 80 percent — praise Scott’s approach and view her giving as contributing to ongoing discussions in philanthropy, including those about trust-based giving. Yet, more than three-quarters of the interviewed funders also express concern about nonprofits’ ability to handle large, unrestricted gifts. Funders share many rationales for their concerns, such as beliefs that organizations led by younger or newer leaders or grassroots organizations are not capable of handling such a gift.
But these concerns are, so far anyway, simply not borne out in our data. The nonprofit leaders in our study report few challenges or unintended negative consequences and are planning for the long term to minimize risks of a financial cliff. Fewer than two percent of survey respondents — 11 nonprofits — report having encountered a major challenge related to the receipt or use of their grant from Scott. About half the survey respondents report that the grant has made their fundraising easier. And, importantly, most nonprofit leaders anticipate no or only “a little” difficulty covering ongoing costs after their Scott grant is expended, suggesting that concerns about nonprofit recipients heading toward a financial cliff are unfounded.
It is too early, of course, to render definitive conclusions about Scott’s giving and its effects. But, so far, the evidence suggests Scott’s unconventional approach, unusual both for the size and unrestricted nature of the gifts, is resulting in dramatically positive effects for both recipient organizations and the work they’re doing — and that feared challenges and unintended consequences have not materialized. We look forward to continuing to examine the effects of Scott’s giving in the coming years.
Ellie Buteau is director of research projects at CEP and Christina Im is senior analyst on CEP’s research team.
