MacKenzie Scott's giving 'profoundly positive' for nonprofits: report

It’s been more than two years since MacKenzie Scott entered the philanthropy world in a major way and transformed herself into a kind of “fairy godmother” among nonprofits.

Back then, Scott was best known as the former wife of Amazon founder Jeff Bezos. But since 2020, Scott — who is worth an estimated $23.8 billion and received 4% of Amazon’s shares as part of her divorce settlement with Bezos — has given away more than $14 billion total to more than 1,500 organizations. 

She has given at a breakneck pace unmatched by most major foundations and focuses her giving on organizations led by women and other underrepresented groups as well as those focused on equity and human rights. And she’s done it all without establishing a foundation or an application process for potential grantees.

Instead, she has relied on advisers at her Lost Horse LLC family office and the Bridgespan Group to help her identify grant recipients, according to a new report that tracks the impact of Scott’s giving. Her gifts are distributed through donor-advised funds at Fidelity Charitable, National Philanthropic Trust, and community foundations.

The report tracked her gifts starting with a July 2020 announcement of $1.6 billion for 116 organizations up until her third round in the summer of 2021. The report is based on responses collected from 277 nonprofits and 40 leaders of grantee organizations. It was published by the Center for Effective Philanthropy, or CEP, a nonprofit that provides philanthropy research and advisory services to donors.

The report comes as Scott on Monday announced another round of gifts totaling close to $2 billion.

In the report, CEP provides an analysis of Scott's practice of providing trust-based, unrestricted funding, meaning she leaves it to nonprofits to decide how to spend the money — which is what many of them want.

Unrestricted grants had not previously been common in the sector. Prior to 2020, only about 20% of grants were unrestricted, CEP found. Even amid widespread public praise for Scott, “in our world, working with foundations, we heard a lot of whispered concern about nonprofits not having the absorptive capacity to handle these gifts,” CEP President Phil Buchanan told Devex.

“There’s a lot of paternalism about nonprofits and a mistaken sense, I think, that nonprofits in general are not effectively led,” he said of the reasons why philanthropic donors are hesitant to give unrestricted gifts.

There are, of course, examples of ineffective leaders in every sector, he added. “But as a general rule, leading a nonprofit is hard, and the people who do it are really good — not all of them, but many of them,” Buchanan said.

While there isn’t much insight available about how Scott selects grantees, it’s clear that she chooses carefully, he said. Scott has said that she has focused specifically on nonprofits aiming to make systemic change and that work closely with the communities they serve.

“The leadership of people directly experiencing inequities is essential, both because it is informed by insights no one else can contribute, and because it seeds power and opportunity within the community itself,” Scott wrote in a blog post in March.

Past recipients have included international organizations such as Partners in Health, CARE, Kiva, and the Center for Disaster Philanthropy. Funding has gone to Africa-based and Africa-focused organizations like humanitarian aid and development nonprofit Adeso, African Population and Health Research Center, and Afrika Tikkun. Funding for international feminist, LGBTQ, and human-rights organizations has also been a major priority area for Scott.

Eighty-eight percent of nonprofits included in the report said Scott’s funding was their largest-ever unrestricted grant. Many reported using the money to expand their staff and their programmatic work. About 40% of them were regranting some of the money to other nonprofits.

More than 90% of grantees said they were using the money to improve their organization’s financial stability by creating financial reserves, endowments, funds for “special opportunities,” or for fundraising. That was especially true for organizations with nonwhite leaders, the report found.

Degan Ali, Adeso’s executive director, previously told Devex that the group wanted to spin its $5 million Scott grant into an endowment and encouraged other grantees to launch similar plans to help sustain themselves long term.

Some grantees told CEP that they initially worried that receiving a large, one-time grant from Scott could ultimately hurt their fundraising because other funders might “pull back” or reduce their gifts because they might believe those nonprofits no longer needed their funding. So far, that hasn’t happened. Instead, the effects have been “dramatically and profoundly positive,” CEP found.

CEP also is among Scott’s grantees but said that it did not use any of that funding to conduct the report, which is the first of three it plans to publish on Scott’s giving. Future reports will include information about subsequent grantees.

In the meantime, Scott has expanded her grantee list. Over the past seven months, she said that she’d given away nearly $2 billion to 343 organizations “supporting the voices and opportunities of people from underserved communities.” Many of them were funds that pool together donations to later distribute to smaller organizations, such as the Global Fund for Children, Global Greengrants Fund, and the Luminos Fund, which works with educational organizations in Lebanon and several African nations.

In the post, Scott, who is very private and makes few public statements outside of her Medium post grant announcements, urged “anyone similarly interested in supporting the leadership of people from the communities they’re assisting” to consider giving to funds.

“The funds we picked look for teams with lived experience in the issues they’re addressing, as we did when selecting the other nonprofits in this giving cycle, and the 1,200+ recipients before them, many of which are also funds,” she said.

Scott also provided VisionSpring, a social enterprise that provides eyeglasses to farmers and artisans in South Asia and sub-Saharan Africa, with its largest-ever single gift, and also donated to groups like the India Health Action Trust.

This is the first round of giving Scott has announced since filing for divorce from her husband Dan Jewett, who had been included as her partner in previous rounds of grant-making.

Scott said in Monday’s blog post that she would “soon” release a database with more information about her grant-making.