MacKenzie Scott Shines a Light on Groups That Bolster Nonprofits and Foundations
Nonprofit infrastructure and philanthropy-serving organizations are an unsexy part of the charitable world. They act as an unheralded scaffolding to strengthen and advance organizations that do good by bringing nonprofit leaders and philanthropists together to learn from one another, conducting research, and advocating for the field. The groups have long been underfunded and struggle to win the attention of individual donors.
But that might be changing as MacKenzie Scott shines a very bright spotlight on the organizations and their work. Dozens of nonprofit infrastructure and philanthropy-serving organizations received unprecedented multimilion dollar donations in Scott’s latest round of giving with her husband, Dan Jewett.
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Umbrella groups that serve and advocate for nonprofits or grant makers and donors are an unsexy part of the charitable world. They act as scaffolding to strengthen and advance organizations that do good by bringing nonprofit leaders and philanthropists together to learn from one another, conducting research, and doing advocacy. The groups have long received a small share of philanthropic funds and have struggled to win the attention of individual donors.
But that might be changing as MacKenzie Scott shines a very bright spotlight on those organizations and their work. Dozens of such groups received unprecedented multimillion-dollar donations in Scott’s latest round of giving with her husband, Dan Jewett.
“I’ve been working for philanthropy infrastructure groups of different types for over 20 years now, and I’ve never in my career experienced a gift like this,” says David Biemesderfer, the president and CEO of United Philanthropy Forum, which received $3 million from Scott. He says groups that serve grant makers and nonprofits provide important leadership, but there’s never enough money for them to meet their potential. “It’s a constant challenge where you’re always seeking grants from funders and trying to find ways to generate revenue, so this is highly unusual.”
Roughly 70 local, regional, and national “infrastructure” organizations received gifts from Scott. Many of them include social- and racial-justice and equity components in their work. The Chronicle focused only on the national groups for this article. Of the 53 national groups it identified, 26 either publicized how much money Scott had given them or told the Chronicle how much they had received.
Organizations have struggled with the decision about whether to disclose the size of the gifts they received. Leaders who declined to say how much their groups got cited a variety of reasons, including the onslaught of calls they’d received from consultants and financial-services providers and concerns about whether disclosing the amounts might make it harder to raise money and win grants.
The 26 national groups that disclosed how much they had received got a total $146 million, with contributions ranging from $2 million to $15 million.
Scott’s total giving to these groups is remarkable since it’s coming from an individual donor. In one fell swoop, Scott gave hundreds of millions. U.S. foundations gave $1.9 billion to infrastructure groups from 2004 to 2015, according to a study conducted by the William and Flora Hewlett Foundation and the Foundation Center.
Whether Scott’s giving signals the start of a new era of wealthy donors giving big to these kinds of umbrella organizations remains to be seen, says Stephanie Gillis, a Raikes Foundation official who helps lead a group of donors who support such groups. What matters most right now, she says, is that Scott understands her leverage as a high-profile philanthropist to draw attention to an overlooked funding area — and that Scott has her eye on the future of giving.
“She’s keeping track of how our country has evolved and what we’re expecting in the next 20 years. We are in the midst of what is going to be the largest wealth transfer in our country’s history, and we expect some $20 trillion to be coming into the nonprofit sector and into our work,” Gillis says. “If we can get ahead of that now and address some of the things that haven’t worked and scale up and influence the ecosystem to be more equitable and community-centered, then we have an opportunity to get dollars to meet community needs.”
Most donors and many big legacy foundations don’t understand what these groups do or why they matter, says Kelly Fitzsimmons, the founder of Project Evident, which received $3 million from Scott and helps nonprofits and grant makers measure what works. That is likely one of the reasons so few individuals give them large sums, she says.
“If other wealthy donors better understood the nature of this work, they would follow her lead,” Fitzsimmons says. “We’re in a corner of the nonprofit world that is just not well understood, but it’s a significant area of impact.”
Scott has used her giving to HBCUs and racial- and gender-equity groups to highlight the work of organizations that are often overlooked. The same is true of the large sums she’s given to organizations that serve and advocate for nonprofits, something she pointed to in her June announcement:
“Social-sector infrastructure organizations empower community leaders, support grassroots organizing and innovation, measure and evaluate what works, and disseminate information so that community leaders, elected officials, volunteers, employees, and donors at every level of income can make informed decisions about how to partner and invest,” Scott wrote in her announcement. “These organizations, which are themselves historically underfunded, also promote and facilitate service, which in turn inspires more people to serve.”
Stamp of Approval
Scott’s gifts have already helped leaders at these organizations raise awareness about their work, which could increase their chances of attracting gifts from other individual donors to expand their work far into the future.
One wealthy donor recently told Nicholas Tedesco, the head of the National Center for Family Philanthropy — an organization that advises and educates wealthy donors about effective grant-making practices — that the donor’s family foundation is now considering an earlier grant request from the center since it learned Scott gave the center $4 million in June.
“They very explicitly said to us that the gift will allow a grant request from us to be considered with more seriousness because of the due diligence that has been done by MacKenzie and Dan and because the family wants to know that they’re not the largest funder of the organization,” Tedesco says.
He and his team had mapped out a new strategic plan to expand the organization well before the center received Scott’s gift. Part of that plan involves raising $15 million over the next three years to support the group’s expansion. Scott’s gift, he says, validates the center’s new plans, making it much easier for him to make the case for support to other donors.
Tedesco isn’t alone. Many leaders say the gifts act as a stamp of approval for their organization’s work.
Scott made a gift to the Donors of Color Network, a cross-racial group of wealthy donors who support racial-equity efforts. That news has given the two-year-old organization more gravitas and a higher profile in the eyes of some potential members, says Ashindi Maxton, the network’s executive director.
“We haven’t had the floodgates open of new members or grant seekers. What we have had is a deep credentialing among folks who were already in our orbit,” Maxton says. “We’ve had donors join who might have been on the fence, and we’ve had donors reach out who we knew but who hadn’t necessarily said they planned to join.”
The announcement of Scott’s $2 million donation to Native Americans in Philanthropy produced a significant bump in attention for the organization, a coalition of grant makers, tribal leaders, and others who work together to advocate for increased philanthropic support of Native Americans and the organizations that serve them, says CEO Erik Stegman. He was even invited to appear on the television show Good Morning America to talk about Scott’s latest donations.
MacKenzie Scott is practicing the kind of philanthropy nonprofits have been asking for, Stegman says — to “give up power to the organizations and communities that know best.”
“I’m able to point that out to people who don’t know much about our work or even the philanthropic sector,” he says, “but they know enough about MacKenzie Scott and what she’s up to that it starts a conversation about our work in a different way and with a broader audience than I was able to reach before.”
News coverage that focuses breathlessly on the size of Scott’s gifts misses an important point, says Elizabeth Barajas-Román, who leads the Women’s Funding Network, which received an undisclosed sum from Scott. What’s more significant, she says, is the way Scott’s money focuses on groups unaccustomed to the limelight.
“It gets people to pay attention and wonder, ‘What are women’s funds? What are they doing, and why did MacKenzie Scott pick a women’s funding network?’”
Data and Technology Boost
Many of the umbrella groups that received gifts from Scott are still figuring out how they will use the money. Almost all, however, told the Chronicle that they plan to use some portion of it to hire more staff and build up their technology and data capabilities.
Independent Sector, a national membership organization of nonprofits, foundations, and corporate-giving programs, was one of the few such groups to receive a donation from Scott in her earlier rounds of giving last year. It got $6 million from Scott last July. The organization’s leaders decided to put the money into a board-designated fund so that it could be invested and grow but also be used to support specific internal needs.
“We were in the middle of the pandemic, and we didn’t know what would happen to membership or if there would be a massive downturn in the economy,” says Dan Cardinali, the group’s CEO. “We wanted to make sure we were living within our means for our normal operations.”
Like many of the groups, Independent Sector has designated some of the money to upgrade its internal technology and data-collection systems. One way it is doing that is by improving the technology that helps its members and others interact with each other online. One example is Upswell, an effort the organization created in 2017 to hold conference-like gatherings that aim to collect ideas and connect nonprofit leaders with one another in virtual groups focused on specific causes. Cardinali says new technology improvements will also help his organization collect more granular data and feedback from member surveys, Upswell gatherings, and online seminars so it can better serve members.
Independent Sector has hired two new full-time staff members for that purpose and will likely hire a third, Cardinali says. The organization also set aside some of the money for two additional efforts: to hire on contract a group of community organizers who have deep experience working with Latinos and Pacific Islanders and to conduct research projects related to Independent Sector’s public-policy work. Some of that research includes analyzing whether a universal charitable deduction would encourage more people to give to charity and how much additional giving it might spur and examining proposed legislation that aims to accelerate foundation and donor-advised-fund giving. Both research efforts are designed, in part, to look at the potential effects of those policies from an equity and justice point of view.
GivingTuesday, an organization that encourages generosity around the world, plans to use the $7 million it received to accelerate its plans to expand in East African countries, India, and elsewhere in the global south, says CEO Asha Curran. The money will also go toward providing more training and other support to the volunteer leaders running the nonprofit’s efforts around the world and new data projects to map giving to mutual-aid groups and generosity more generally.
‘We’re Not Sitting Back’
Scott’s gift was the biggest GivingTuesday has ever received from an individual donor, as has been the case with many of the umbrella groups. Yet Curran says the gift doesn’t change her group’s fundraising plans.
“This gift literally did not give us a break from fundraising for even a day. What this does give us is incentive to get to $10 million by our 10th anniversary next year,” Curran says. “We’re not sitting back and declaring victory; we’re looking at how we add to this gift and continue to add to it.”
But the money does give the groups more breathing room. The $4 million that Grantmakers for Effective Organizations received is a substantial amount but not so substantial that it can save it for a rainy day, says CEO Marcus Walton.
“It allows us to do what we’re doing without the typical budget constraints,” he says. “We still need to prioritize, but we don’t have to do so from a scarcity mind-set. We can be a little bit more abundant in our thinking.”
Walton’s group, a membership organization that helps grant makers improve their philanthropy, is using some of that $4 million to broaden a series of training and education programs about racial equity and justice it provides members. The programs aim to bring foundation leaders and staff up to speed on best practices on racial equity. The goal is for foundations to have a clear sense of their values and to be connected with the people they are trying to serve, something Walton says many grant makers struggle to do. He says the Scott gift will also allow his organization to partner with two other groups that received gifts from Scott — Equity in the Center and National Committee for Responsive Philanthropy — to provide the programs to many more members.
Several organizations that spoke to the Chronicle are concerned that some longtime donors will assume that Scott’s gifts are enough to take care of the nonprofits for years to come, which they say is simply not true.
“These gifts help to free us up a bit to expand the possibilities but only if we continue to get the support we’ve had and can build on that,” says Biemesderfer, of United Philanthropy Forum. “It shouldn’t be viewed as replacement funding or else it kind of defeats the whole purpose.”
Instead of worrying about whether other donors will pull back, Stegman says he views the attention brought about by Scott’s gift as a unique opportunity to capture the eyes and ears of those who advise wealthy philanthropists, a group he says groups that serve nonprofits and foundations have historically had trouble reaching.
“Our organizations are so steeped in the private foundation world that we struggle sometimes with how much energy and attention we put into engaging that audience,” Stegman says. “With these gifts, she really helps individual donors see that there is this field of organizations that are working to help leverage their dollars into stronger investments across the field.”
The following organizations declined to say how much they received or did not respond to the Chronicle’s requests for information:
Arts Administrators of Color Network
Black Organizing for Leadership and Dignity (BOLD)
Building Movement Project
Center for Evaluation Innovation
CompassPoint Nonprofit Services
Donors of Color Network
Equitable Evaluation Initiative
Equity in the Center
Filantropía Puerto Rico
National Council of Nonprofits
National Equity Project
Philanthropic Initiative for Racial Equity
Rockefeller Philanthropy Advisors
Rockwood Leadership Institute
Women’s Funding Network