January 4, 2021
With civic need at an all-time high, philanthropist and author Mackenzie Scott’s gift of nearly $4.2 billion to 384 charities nationwide could not have come at a better time.
Scott and her team of advisors chose the benefactors based on “a data-driven approach to identifying organizations with strong leadership teams and results, with special attention to those operating in communities facing high projected food insecurity, high measures of racial inequity, high local poverty rates, and low access to philanthropic capital,” according to her December post announcing the gifts on Medium.
These funds are largely unrestricted in how they are used and with many of those dollars going to small organizations, which means these gifts have the potential to not only make a lasting impact, but change the way wealthy individuals, foundations and organizations think about giving in their own communities.
That is also a major change in approach to giving. Many large foundations often require hoops for an inquiring organization to jump through before it can get access to the money, and then once it has access, the organization has to comply with onerous reports detailing exactly how funds were used in accordance with the wishes of the benefactor. Not in Scott’s case.
It’s a classic example of cutting the red tape, facilitating delivery of much-needed capital direct to the source and trusting them to use it wisely. Of course, that doesn’t necessarily sit well with some large foundations or individuals who now may draw fire for not taking similar actions quickly as the net worth of billionaires skyrocket during the pandemic.
Another potential side effect is while many of the organizations were named, only some of the amounts have been revealed. Media are already digging into who got what, and it won’t be long before scrutiny of how the money was actually used begins. Non-profits have varying levels of financial sophistication and there is the potential for perceptions of (or real) misuse of the funds—a storyline the media will follow closely.
An important lesson for the lucky organizations who have received this generous gift—closely monitor how the money is being used to avoid potential questions that might arise from media and other stakeholders. To be certain, the money is a real lifeline for organizations whose mission it is to support underserved populations. Scott has set a new bar—and perhaps established a new standard—to deliver real money proactively, promptly and passionately when and where it is needed most.
Want to talk about reputational risk at your organization? Email me at firstname.lastname@example.org.