11/16/2022

What Large, Unrestricted Gifts Do for Leaders

Generous general operating support can be transformational

MacKenzie Scott’s giving has shattered conventional norms for big donors and foundations. Consider this: In her first three rounds of giving, between the summers of 2020 and 2021, the median grant size was $8 million, according to the data we collected for a just-published report entitled Giving Big: The Effects of Large, Unrestricted Grants on Nonprofits. That compares to a median grant size of $100,000 among larger, staffed funders whose grantees our organization, the Center for Effective Philanthropy (CEP), has surveyed in recent years.

Scott’s gifts have been huge, by conventional standards, and they have also been unrestricted. It’s totally up to recipient organizations, and their leaders, to decide how to use them. For decades, nonprofit leaders and advocates have argued that nonprofit organizations need more unrestricted resources, in the form of general operating support, to do their best work. It makes sense. A lack of unrestricted resources impedes planning, curtails the ability to invest in staff salaries and organizational capacity, and, at its worst, leads to mission creep in which organizations chase project funding to keep the lights on.

So, understanding what a fascinating natural experiment Scott’s giving represents, we set out to study the effects of Scott’s large, unrestricted giving on the organizations she supported. But what we found is that, in addition to impacting the recipient organizations, the grants were transformational for leaders. It affected them personally and professionally—profoundly shifting their mindsets. This matters because it shows that a different approach to giving can shift leaders’ thinking, emboldening them to dream of what’s possible for their organizations—and for those they serve—in new ways and act on making those dreams a reality. 

Please select this link to read the complete article from SSIR.