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GIVING BIG:
The Impact of Large,
Unrestricted Gifts on Nonprofits

Results from Year One of a Three-Year Study of MacKenzie Scott’s Giving

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Overview

In late July 2020, MacKenzie Scott shocked the philanthropic and nonprofit worlds with the announcement that she had given $1.7 billion to 116 nonprofit organizations. The gifts came in the form of massive, unrestricted grants, with a significant proportion targeted to organizations focused on issues of equity, and were made with no restrictions – only an expectation of an annual three-page letter back to the donor for the three years following their receipt.

"Life will never stop finding fresh ways to expose inequities in our systems... What fills me with hope is the thought of what will come if each of us reflects on what we can offer. "

- MacKenzie Scott

Our research aims to answer these pressing questions:

Do nonprofits believe this gift has increased their impact? In what ways?

How did these nonprofits allocate the grant? And why?

Have the nonprofits experienced unintended negative consequences of the gift? What have been the downsides of receiving this gift, if any?

We surveyed and interviewed,
respectively:

0

nonprofit organizations

0

leaders

representing a 36 percent response rate

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1

Finding 1

Transformational Gifts

Nonprofit leaders describe these large, unrestricted grants as transformational for their organizations and their leadership. They believe the funding is significantly strengthening their ability to achieve their organizations’ missions, which, for many, is connected to advancing equity.

"I was left in awe. I didn’t know what to say except thank you. Our core values were repeated back to us as we were given this gift and investment. I thought, ‘Wow, we can now support the growth of our organization and concentrate on our work, not the fundraising needed.'"

– Nonprofit Leader

Do nonprofits believe this gift has increased their impact? In what ways?

Impacts of the Grants on Strengthening Nonprofit Organizations

83%

ABILITY TO ACHIEVE ITS MISSION

Most leaders report this grant will significantly strengthen their organization’s ability to achieve its mission.

63%

LONG-TERM FINANCIAL STABILITY

Close to two-thirds of leaders believe this grant will significantly strengthen the long-term financial stability of their organization.

64%

LONG-TERM ORGANIZATIONAL CAPACITY

About two-thirds of leaders believe this grant will significantly strengthen the long-term organizational capacity of their organization.

83%

of respondents believe this grant will significantly strengthen their organization’s ability to achieve its mission.

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Equity is a core part of the mission of many of the recipient organizations, and leaders say their gifts allowed their organizations to contribute to advancing equity more effectively than they could have otherwise – particularly racial equity and economic mobility.

The Extent to Which the Grant Allowed the Organization to More Effectively Contribute to Advancing Equity

Note: Percentages in this figure may not add to 100 due to rounding.

93%

of respondents said that the grants they received from Scott allowed their organizations to significantly or moderately contribute to advancing racial equity.

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"We registered more than two million voters [of color]. We were able to close the voter registration gap between the white electorate and folks of color."

– Nonprofit Leader

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Finding 2

Putting the Grant to Use

Nonprofits are using the grant money to help those they seek to serve by improving or expanding their existing work and engaging in new work, often bringing on new staff to take on that work. Most are also using the money to improve their organization’s financial stability and to fairly compensate and support staff.

Organizations responding to our survey generally had decided, at least in broad terms, how to use nearly all of their grant money, prioritizing putting the money toward their programmatic work, believing this will lead to the greatest impact.

Uses of the Grant: Programmatic Work
Programmatic uses for which organizations have used or will use some portion of the grant (Ns range from 194 to 241)

For example: purchasing supplies, providing financial support such as scholarships, or regranting.
Note: Measurement and Evaluation is abbreviated as M & E.

98%

of respondents report allocating some portion of the grant to support new or existing programmatic work.

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Close to two-thirds of leaders believe this grant will significantly strengthen the long-term financial stability of their organization. Interviewees describe making choices to “plan for the future in a way that is much more meaningful than had we not had this gift."

Uses of the Grant: Financial Stability
Financial uses for which organizations have used or will use some portion of the grant (Ns range from 187 to 230)

90%

More than 90 percent are using the money to improve their organization’s financial stability.

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Uses of the Grant: Staff and Operational Needs
Operational uses for which organizations have used or will use some portion of the grant (Ns range from 191 to 220)

90%

Nearly 90 percent of organizations are using the grant money for staff and operational needs.

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Finding 3

A Lesson on Trust

To date, few nonprofit leaders have encountered organizational challenges or faced disruptions such as declines in other funding as a result of these grants. Instead, leaders were able to address long-standing needs and reported increased confidence and credibility for their organizations. The main lesson they believe this experience holds for other funders is to have more trust in nonprofits.

Almost three-quarters of the leaders we interviewed already had plans in place that they used these funds to support or accelerate. Most leaders interviewed say the gift increased their organization’s confidence or credibility.

"It is so refreshing to a veteran nonprofit person to have a donor say, ‘You know what? It’s up to me, it’s my responsibility to do the research about who I want to support. It’s not up to the charities to prove to me why I should support them, and I’m going to do this in a very organized, methodical, data-driven way.'"

– Nonprofit leader

Clear Uses for Grant Funds

"We also used the funds to leverage funding from other funders. As it turns out, we have raised more in philanthropic support since receiving the Scott gift. We have received the Scott ‘stamp of approval,’ and as a leader of color that stamp of approval has provided me with greater credibility."

– Nonprofit leader

"It has emboldened us to be more strategic in fundraising by giving us a cushion to be more selective about restricted grants. This will put us in a much stronger strategic position going forward as we will be able to focus on funding that is better aligned with our strategy. "

– Nonprofit leader

GIVING BIG:
The Impact of Large, Unrestricted Gifts on Nonprofits

Results from Year One of a Three-Year Study of MacKenzie Scott’s Giving

Scott’s approach has challenged norms that influence giving by individual donors and foundations alike. Understanding the particular ways in which recipients of her giving have experienced it, and how they are using the funding, offers insights that can inform other donors as they consider how to give effectively. Find more data and analysis from this study in the full report. We look forward to continuing to study the impact of Scott’s giving in years two and three of this research effort.

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Webinar video

Recorded: Tuesday, November 15th, 2022

Giving Big:
The Impact of Large, Unrestricted Gifts on Nonprofits

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Research Funded By

*CEP acknowledges that it has been a beneficiary of MacKenzie Scott’s giving, having received a grant in 2021. CEP has no expectation of receiving further funding from Scott. This project was not funded in any part by Scott’s grant.


Authors
Ellie Buteau, Phil Buchanan, Maria Lopez, Katarina Malmgren, and Christina Im
Copies of the survey instruments can be found here.

View more reports at cep.org