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

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.

 

Understanding Scott’s giving as a departure from prevailing norms, the Center for Effective Philanthropy (CEP) decided to undertake a three-year research study examining the impact of these large, unrestricted gifts on recipient organizations. While CEP cannot explore all the questions raised about Scott’s giving in a single research study, it focused on a set of questions about the effects on recipient organizations:

• 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? 

CEP's primary purpose is to reveal insights that are relevant to a broad spectrum of other donors — individuals and foundations — at a range of giving levels. A secondary hope is that nonprofits can learn from the experiences of those who received these gifts — so they can make the most of existing gifts they receive and be prepared should they find themselves in the position of receiving a large unplanned and unrestricted gift. This research has been conducted independent of Scott and her team or consultants. Although CEP received $10 million from Scott, it funded this effort entirely through support provided by other donors.

Click here to read the report.

Source: Center for Effective Philanthropy