Category Archives: Donations

MacKenzie Scott Makes History with $6 Billion in Giving in 2020 Alone

MacKenzie Scott Makes History with $6 Billion in Giving in 2020 Alone

In the last few months of 2020, MacKenzie Scott has redefined what it means to be a philanthropist with a rapid fire of gifts totaling more than $4 billion. All told, she has donated $6 billion this year from the $60 billion she has amassed during her career and her divorce from Amazon founder Jeff Bezos in 2019.

Scott has largely targeted organizations working to meet the basic needs of Americans, especially those offering COVID-19 relief. Many charities are struggling due to the pandemic, which has placed financial strain on people, businesses, and nonprofits alike. Scott saw this as an opportunity to step in and make a difference after pledging last year to spend the majority of her wealth on social causes.

Scott’s team sent emails to nearly 400 organizations in the past four months, offering large gifts at a time when the forecast looked bleak. For many of these organizations, it was the largest single gift they had ever received. In fact, some of the emails went to spam folders, and others were initially dismissed as scams. However, with her rapid giving, Scott has set a new precedent for philanthropy. In many ways, she has turned traditional giving on its head.

Breaking with Philanthropy Traditions

Multibillion-dollar foundations, like the Bill and Melinda Gates Foundation or Bloomberg Philanthropies, typically have large headquarters with many staff members. In contrast, Scott doesn’t even have a website or known address for her philanthropic operation. She uses a small team of trusted advisors rather than a staff. This removes the spotlight from her and instead places it on the organizations she supports

What makes her giving even more remarkable is her choice of recipients. She has focused on many groups that have traditionally been overlooked by major foundations, including community colleges, historically black colleges and universities (HBCUs), and organizations that help pay medical debts. Many of the organizations she has supported are run by women, particularly women of color.

Scott is also breaking the mold in terms of how she reports her giving. Historically, female philanthropists have mostly given anonymously, according to data from the Women’s Philanthropy Institute. However, Scott explicitly listed the causes she has supported. The list shows careful consideration and a great deal of research in terms of striking a balance between meeting basic needs and pushing for systemic change. While she did not state how much each organization received, many of them have already announced their gifts, including the amount, which provides more insight into her motivation and expected impact.

Giving with Trust—No Strings Attached

Another remarkable aspect of Scott’s gifts was that fact that they were not only unsolicited, but given with no strings attached. In other words, Scott donated the money without any stipulations regarding what it should be spent on—she trusts that the recipients know how to use their gifts in the most meaningful way. This no-strings-attached giving is at odds with traditional philanthropy, which often involves long grant proposals, site visits, and frequent performance reports to ensure that benchmarks are met.

Scott notes that nonprofits are typically underfunded to begin with, and creating the additional burden of reporting can divert them from their core work. The nonprofit community has largely applauded the unconditional nature of her gifts, which seems to be indicative of the future many charity leaders would like to see.

The underlying trust in the transaction lets organizations pivot faster and react to sudden changes, such as the pandemic, without being held to standards similar to those of venture capitalists. Many of the nation’s top donors take an aggressive approach to monitoring as if they were investors expecting a return. This scrutiny can make it difficult for organizations to shift when situations change.

Broader Impact on Philanthropy

According to experts on philanthropy, Scott’s total donated amount is likely one of the most ever given to charities in a single year by a living donor. Moreover, it is remarkable that she gave broadly to many groups instead of making a few, targeted gifts.

This approach may prompt criticism of the foundation model, which only requires 5 percent of endowments to be paid out each year. Foundations are known for giving away the bare minimum—often less than the profits they earn through investments, which means that their endowments increase, but organizations in need do not always benefit. The foundation model has come under considerable criticism during the pandemic. At a time when economic need is so overwhelming, many foundations seem more interested in holding on to their wealth than in giving it away to actually help people.

By giving away $6 billion in about six months, Scott has called attention to the slow pace of traditional giving. Her actions have not escaped all criticism, however. As already mentioned, Scott did not disclose the amount each organization received, which would have been required if she donated through a foundation. Instead, she used a Fidelity donor-advised fund to make the gifts, which means it is possible other organizations not listed also received donations.

Some people in the philanthropy sector have criticized this lack of transparency and choice of vehicle, as well as her choice not to explain the process by which she chose the recipients. At the same time, the majority of feedback has been positive, and many in the industry see it as a positive step toward greater giving.

This Is How the American Red Cross Responded to Recent Disasters

This Is How the American Red Cross Responded to Recent Disasters

The American Red Cross responds to natural disasters across the world. Recently, the organization has been actively involved in supporting individuals affected by Hurricane Dorian in the United States and the Bahamas. Early in the storm’s progression, the organization committed $2 million to meet the needs of individuals in the Bahamas affected by the hurricane… Continue Reading