MacKenzie Scott’s no-strings gifts extend beyond grantees
Jun 2, 2021, 1:34 PM | Updated: 5:08 pm
MacKenzie Scott stormed the philanthropy world last year with $5.7 billion in unrestricted donations to hundreds of charities. The seven- and eight-figure gifts were the largest many had ever received. At the time, few people understood the multiplier effect those gifts would have or how truly wide a net she was casting. The many tentacles of her giving are poised to touch charities far beyond those that received money directly from Scott.
Joe Neri, CEO of the Illinois Facilities Fund, had an inkling that would be the case when his group received $15 million from Scott. Neri’s organization lends money to other charities. Many of the loans it provides help nonprofits make improvements like replacing a leaky roof or constructing a new medical clinic.
Neri knew his organization would lend much of that $15 million to the nonprofits it finances and that the impact of the money would end up being closer to a $75 million donation over time, allowing his organization to help far more people.
Scott’s gift is considered reliable equity by loan-making financial institutions, corporations, and foundations. That means Neri can borrow additional money — in this case around $60 million, he says — that his fund can then lend to charities. The money also generates income when the charities pay the fund back.
“I call it the gift that gives forever,” says Neri.
Another way Scott’s giving is extending beyond original beneficiaries: Many nonprofits that received donations are distributing portions of the money to their affiliates or other small charities.
For example, Scott gave a combined $162 million to 22 Easterseals affiliates, plus the national office in Chicago. Gifts ranged from about $1 million up to the $15 million that the national office received, says Angela Williams, CEO of Easterseals, which assists people with disabilities.
The national office plans to use part of the $15 million it received to help some of the 45 affiliates that didn’t receive Scott donations. For example, affiliates can apply to the national office for money to help close a funding gap or update an existing program.
Scott, 51, is a reluctant public figure. She did not respond to interview requestsfor this article. According to media reports, Scott grew up in a wealthy San Francisco household. Her father ran an investment firm until filing for bankruptcy in 1987. With the family’s finances diminished, she worked multiple jobs to put herself through Princeton.
Scott played a prominent but backstage role helping her former husband, Jeff Bezos, build Amazon into the global behemoth it is today.
Since the couple divorced in 2019, she has attracted an extraordinary amount of attention for a postdivorce net worth estimated at nearly $60 billion. A writer whose novel The Testing of Luther Albright won an American Book Award in 2006, Scott has shied away from speaking publicly about her philanthropy.
Yet true to her craft, Scott provided clear written statements about her motivations in two Medium posts that were published in July and December. In them, she explained how she selected the groups to which she gave and why. She wrote that her life includes “two assets” that she can use to help others: the wealth delivered to her by an “imbalanced” social system and “a conviction that people who have experience with inequities are the ones best equipped to design solutions.”
Indeed, one of Scott’s most important goals for her giving is to help historically marginalized people by supporting charities that focus on racial, gender, and social justice.
Scott’s gift of $2 million to Borealis Philanthropy, a grant maker that supports social-justice groups led by people who have traditionally been excluded from leadership positions is one example. It also exemplifies Scott’s effort to fan money beyond the immediate beneficiary. She directed the Borealis gift to the group’s Fund for Trans Generations, which supports nearly 60 small charities that are led by and serve transgender, gender nonconforming, and nonbinary people.
Many of the groups are implementing antiviolence programs and helping trans and gender-nonconforming people develop leadership skills. Scott’s money will aid those efforts at a time when violence and punitive laws aimed at trans people have increased, says Ryan Li Dahlstrom, who leads the fund.
Scott’s decision to let nonprofit leaders decide for themselves how to use the money shows that she trusts their expertise. Almost every charity leader who spoke to the Chronicle said the freedom to direct the money to where it was needed most was the characteristic of her giving that mattered most.
Scott is showing a striking level of humility not usually seen among ultrawealthy donors who have made their fortunes in technology.
“That’s just, unfortunately, hubris that sometimes comes with the money,” says Chuck Collins, a former wealthy heir who gave his fortune to charity in 1986 and today leads the Program on Inequality and the Common Good at the Institute for Policy Studies. “Coming out of the tech world and the whole notion of disruption, I would say she is the big disrupter of traditional billionaire philanthropy.”
Many nonprofit leaders hope other wealthy donors will take note of Scott’s approach and start giving more and bigger unrestricted donations — with an explicit recognition that it is charity leaders who know best where to direct charitable dollars to do the most good.
“There has to be a recognition at some point that you have professionals on the ground that are close to the issues,” says Williams of Easterseals. “We come to this work with a level of understanding and sophistication to do the work. What we don’t come to the table with is an abundance of funds to get it done.”
To what extent Scott’s gifts help — or hurt — recipients’ fundraising efforts remains to be seen. Several say some longtime donors now think their money is no longer needed. That couldn’t be further from the truth, the nonprofit leaders say.
“We operate on thin margins, and the work needed is so important,” says Williams. “When you think about most nonprofits, they’re not really operating with a lot of cash in the bank, so to have a rainy-day fund or an endowment is a luxury.”
Leaders at Walla Walla Community College, located in a rural part of Washington State, have found a thoughtful way to talk to donors who might assume their support is no longer needed after learning that Scott had given the college $15 million.
Jessica Cook, who leads fundraising, and the community college’s president, Chad Emerson Hickox, stress to donors that one of the reasons Scott decided to donate to the college is its track record of helping people who wouldn’t otherwise go to college — and that it was their giving that made that track record possible.
“This $15 million is a remarkable gift. But it’s not the only generosity that we received over the years,” Cook says. “I think it means a lot to people to hear that.”
This article was provided to The Associated Press by the Chronicle of Philanthropy. Maria Di Mento is a staff writer at the Chronicle. Email: firstname.lastname@example.org. The AP and the Chronicle receive support from the Lilly Endowment for coverage of philanthropy and nonprofits. The AP and the Chronicle are solely responsible for all content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.
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