Philanthropy This Week

Robert Carter for the Chronicle, photo from Getty Images

Good morning.

Four years after MacKenzie Scott started springing multimillion-dollar gifts on charities by surprise, the nonprofit world still has few clues about how and why she chooses the lucky recipients. Why do some groups denied a grant the first time get a second shot? And why have a select few received two grants? Even the winners don’t know why they were singled out and have had no way to contact her or say thank you.

But little by little, Scott has cracked open the door. A searchable database of gifts on her Yield Giving website provides some insights into the causes and groups she has supported so far. And with her first open call for proposals, grantees have received feedback from her team.

As part of our August issue’s special report on MacKenzie Scott’s giving, Stephanie Beasley set out to find out more, interviewing some of Scott’s grantees and the leader of Lever for Change, which oversaw the competition.

“I’ve likened us to a real-estate broker matching buyers and sellers,” Cecilia Conrad, the group’s CEO, told Stephanie. “That’s not a perfect analogy, but what we do is work with funders of all types to design an open call for large grants.”

For Easterseals, which in 2020 received $162 million between its national office and 22 affiliates, there was another surprise to come. Scott’s team asked the group to report on the impact of the gift after the first year, but as it was preparing its second-year report, it was told no further reports were necessary.

“There was no explanation provided,” CEO Kendra Davenport told Stephanie.

The money was pivotal in helping fund work that affiliates had been struggling with. Among other things, they were able to supplement Medicaid reimbursements to ensure that professionals who care for people with disabilities make a living wage.

Said Davenport: “It really is like lightning in a bottle when you get a transformative gift like that, and that’s exactly what it was for us.”

For those who were likely interviewed by Scott’s team but never heard back, it’s a different story, according to an opinion piece by an anonymous author.

After a conversation with two members of a Bridgespan team who said they were exploring nonprofits for an anonymous donor, the author waited and waited to hear back.

“When six and then seven months had passed, I started to wrack my brain, wondering what on earth went wrong,” the author wrote. “What had I said? Did I fail to adequately represent the organization I loved so dearly?

“It kept me up at night. It still does.”

Here’s what else you need to know:

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Metrics and trust-based philanthropy can go hand in hand — though they may seem to be mutually exclusive, writes Eric Weingartner, CEO of the Overbrook Foundation, in an opinion piece.

In his work at City Hall, nonprofits, and foundations, Weingartner has found that metrics such as benefit-cost ratios, returns on investment, and performance evaluation were central to funding decisions. But leaning too much on metrics can mean too much bureaucracy.

The key is to simplify the process of collecting metrics, be flexible, and work with the grantee to decide which metrics to gather. At movement-building organizations, for example, work takes place over time and often in collaboration with others, so there isn’t an obvious formula to determine what to measure.

“Trust-based philanthropy is grounded in the idea that relationships between funders and grantees are crucial and should be characterized by shared accountability,” he writes. “Performance evaluation is fundamental to that accountability.”

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Fundraisers are losing out on gifts by not tailoring their appeals to the devices people are using, according to a new report from researchers at the University of Connecticut and the University of Notre Dame.

The reason: When people use their phones, they’re more focused on themselves than when they are using other devices and thus are less likely to give to help others, writes Maria Di Mento.

The solution: When composing digital appeals, don’t write about the campaign, write about the needs the organization is trying to address or explain what donors can do to help.

“The increase in digital giving is attributed to the fact that more people are using their smartphones over all,” Kristen Ferguson, an author of the report, told Maria. “When you take a step back and compare donation behavior across devices, you start to see this ‘mobile giving gap’ come in. It’s really important for [charities] to view the smartphone as its own platform.”

Joshua A. Bickel/AP

Four medical schools at historically black colleges and universities will receive a total of $600 million for their endowments from Bloomberg Philanthropies, more than doubling the endowments of three of them, writes Thalia Beaty for our partner the Associated Press.

“This gift will empower new generations of Black doctors to create a healthier and more equitable future for our country,” said Michael Bloomberg in a statement.

The recipients: Howard University College of Medicine, Meharry Medical College, Morehouse School of Medicine, and Charles Drew University of Medicine & Science. In addition, Xavier University of Louisiana, which is opening a new medical school, will receive $5 million.

This support goes beyond helping these institutions, Yolanda Lawson, president of the National Medical Association, told Thalia. “It affects the nation’s health.”

— Marilyn Dickey, senior editor for copy

WHAT WE’RE READING ELSEWHERE

Big Donors

Warren Buffett’s recent announcement that upon his death his remaining billions would go to his children’s charities, rather than the Gates Foundation, has raised questions about the state of his decades-long relationship with Bill Gates. People close to Buffett say he views the massive Gates Foundation, with a budget larger than the World Health Organization’s, as bloated and too risk-averse. But the announcement was not technically a departure: When Buffett decided in 2006 to give tens of billions of dollars to the then-Bill & Melinda Gates Foundation, it was a lifetime pledge. Buffett said he would make separate plans for the remainder of his wealth that remained upon his death. (New York Times)

Software billionaire Phillip “Terry” Ragon and his wife, Susan, are putting $400 million into a “Manhattan Project” for HIV, convinced that they can find a cure that has eluded researchers for decades. The Ragon Institute in Cambridge, Mass., will bring together doctors, engineers, physicists, mathematicians, and virologists “to reengineer people’s immune systems” in a way that could also be applied to diseases including tuberculosis, malaria, and cancer. Phillip Ragon said the venture will focus on riskier, earlier-stage research that governments are typically reluctant to fund. Other partners on the project include the Gates Foundation, the International AIDS Vaccine Initiative, and the Italian drug developer ReiThera. (Forbes)

Florida A&M University

An abortive $237 million gift to Florida A&M University was fraudulent, according to an independent review that found a series of deficiencies in how university officials handled the stock donation. The report, released Monday, said top officials relied on the donor’s false valuation of the stock to be transferred and rushed the process in order to make an announcement at an upcoming commencement ceremony. Employees thought a confidentiality agreement barred them from seeking outside expertise, the report said, and the university’s president kept the matter from the Board of Trustees for fear of leaks to the media. As for the donor, the report said the gift was part of his efforts to exaggerate the success of his business ventures. (Tallahassee Democrat)

The donor who presented Florida A&M University with a blockbuster gift this spring before it quickly fell apart has rescinded the donation. Gregory Gerami gave the school stock in his hemp-farming operation that he said was worth $237 million. Questions quickly arose about that figure and about Gerami’s financial wherewithal, especially in light of a previous failed promise of $95 million he had made to a university in South Carolina. The results of an independent investigation into the debacle at FAMU are imminent. Gerami said he pulled the gift because “certain FAMU officials were damaging his business” and have not signed paperwork that would allow him to receive a tax deduction on it. (Myrtle Beach Sun News)

More News

A little-known Virginia nonprofit has funneled nearly $10 million to lawyers and gun-rights groups that are spearheading efforts to roll back gun restrictions. The Constitutional Defense Fund, started by an undercover narcotics officer turned pastor, used grants from donor-advised fund sponsor Donor’s Trust to pay the Cooper & Kirk law firm, the Second Amendment Foundation, and the Firearms Policy Foundation, “which together have filed at least 21 lawsuits since 2020 that challenged gun restrictions.” Because of the anonymity that Donor’s Trust confers on its donors, it is not always clear who is backing the legislation — a plaintiff recruited for one of the 21 cases said he did not know who was paying Cooper & Kirk to represent him — which experts say opens the door to impropriety and influence peddling. (The Trace)

Although the meat and dairy industry is a major emitter of greenhouse gasses, it has escaped significant climate-related regulations, thanks in part to help from major environmental groups. Organizations including the World Wildlife Fund, the Environmental Defense Fund, and the Nature Conservancy collaborate with industry groups on certain initiatives that critics say are based on shaky science, cannot yet be evaluated, and provide political and public-relations cover for a highly polluting industry. Donors to these groups also have not made reducing animal agriculture a priority, even as it is central to emissions-reductions goals. Spokespeople for these organizations say working with the industry is an effective way to introduce more environmentally friendly technologies and methods to farmers. (Vox)

About 20 percent of those claiming abuse in a landmark settlement against the Boy Scouts did not apply for compensation by the deadline. Lawyers involved in the litigation, which covers allegations dating back decades, said hundreds of claimants had died during the lengthy court proceedings, which saw the nonprofit claim bankruptcy. Many “have mental illness or extreme difficulty functioning,” one lawyer said, while still others could not bear to revisit the abuse. Finally, some false claims were filtered out by the lengthy application process. More than 60,000 people are seeking payouts ranging from thousands of dollars to $2.7 million from a $2.4 billion pot. (Wall Street Journal — subscription)

One block in Harlem is learning how to live with one of the country’s first supervised drug-use sites. The nonprofit OnPoint offers a safe place to use street drugs, as well as storefront medical attention, food, and counseling. But it also anchors one of the police precinct’s most violent blocks, and some neighbors complain that the drug users and dealers it attracts have exacerbated the struggling area’s problems. Others, including the owner of a day care across the street, credit OnPoint’s workers with helping to keep the block cleaner and safer, and said the neighborhood needs the center. (New York Times)

For five years, the American Exchange Project has been sending rural and urban teenagers to stay with host families in places far different from their own hometowns in an effort to break down suspicions and stereotypes. The nonprofit, which was inspired by founder David McCullough III’s cross-country trip in 2016 and welcomed its 1,000^th student this year, is funded by Kate Capshaw and Steven Spielberg’s Hearthland Foundation, among others. McCullough said the organization is providing students “with experiences that help them humanize the other so that they don’t demonize them later.” (Los Angeles Times)

The American director of an infant-formula charity and adoption agency in Malawi is under investigation for possibly using contributions to pay for a jet-setting lifestyle and facilitating dubious adoptions. State Department investigators say Jason Carney used the bank accounts of his charity, 2^nd Milk, to pay about $172,000 in credit card bills for personal expenses. Meanwhile, officials in Malawi say he was arranging adoptions to U.S. parents that had not gone through the necessary government approvals, including at least one in which he appears to have thwarted the efforts of some relatives to keep the child. Carney did not respond to requests for comment. (Wall Street Journal — subscription)

NEW GRANT OPPORTUNITIES

Your Chronicle subscription includes free access to GrantStation’s database of grant opportunities.

Education: The Wish You Well Foundation supports adult and family literacy in the United States by fostering the development and expansion of new and existing adult literacy and educational programs. The focus is on supporting nonprofit organizations that teach adults the literacy skills they need to communicate, grow, and thrive within their communities. (Funding is not provided for youth programs.) Grants range from $200 to $10,000.

Civil Rights: The Herb Block Foundation is committed to defending the basic freedoms guaranteed to all Americans, combating all forms of discrimination and prejudice, and improving the conditions of the poor and underprivileged. The Foundation’s Defending Basic Freedoms program provides support to 501(c)(3) nonprofit organizations nationwide to help safeguard the basic freedoms guaranteed in the U.S. Bill of Rights, help eliminate all forms of prejudice and discrimination, and assist government agencies to be more accountable to the public. Grants range from $5,000 to $25,000; applications due October 2.