2024-01-05 14:47:14
MacKenzie Scott has become one of the world’s biggest (and fastest) philanthropists in recent years. US$16 billion has been distributed to almost 2,000 organizations around the world in the five years since she signed the Giving Pledge, the promise to donate more than half of her fortune during her lifetime.
Still, few people understand the methodology of MacKenzie, who was married to Jeff Bezos for 25 years and helped him found Amazon. (When she divorced Bezos, MacKenzie received a 4% stake in Amazon, or 19.7 million shares.)
The doubts exist because the billionaire chose a different path than most American philanthropists: instead of creating a private foundation, focusing on specific issues and tightly controlling the application of the money, MacKenzie gives much more freedom to the organizations she helps.
Now, a Harvard Business School study has begun to find logic in this approach.
With data provided by Yield Giving, which concentrates all of MacKenzie’s donations, and crossing with statements made to the US IRS, HBS concluded that the philanthropist prefers to donate to more robust non-profit organizations.
Yield Giving recipients raised five times more donations than the U.S. average. What’s more, these organizations have an average net worth of $46 million – nearly four times the industry average.
Matthew Lee, a professor at Harvard’s Kennedy School and one of the survey’s three authors, said opting for larger, more robust organizations increases the likelihood that unrestricted donations will be used more efficiently.
On its website, Yield Giving states that it makes donations after conducting discreet research and careful assessments of organizations, especially regarding their potential for positive impact on society.
The administrative part is also important: among the main criteria for receiving a donation, the organization needs to have stable finances, a track record of several years, measurement and evidence of results, as well as experienced and representative leadership.
Even with these explanations, doubts remain even among donation recipients.
In 2022, Habitat for Humanity, an organization focused on homelessness, received $436 million — with $25 million for the main office and the rest for 84 of the organization’s programs chosen by MacKenzie’s team.
According to Forbesno one inside understood why so much money had come in – but, of course, everyone was grateful.
As Yield Giving does not send money with a stamp, organizations have complete freedom to choose the best destination for the resources.
Meals on Wheels in San Diego, which delivers meals to people in need, decided to invest in its headquarters (bought the property and renovated it) to expand its operations.
There were, however, two rules for the donation to be made: an annual report (for three years) showing the impact of the decision, and accepting that I would no longer receive money from Yield Giving – and there was no point in begging.
HBS also did a survey on which causes received MacKenzie’s money: education received the most resources, around US$2.2 billion since 2020. Much of the money went to educational institutions and universities that primarily serve students blacks and Hispanics.
In 2022, however, a change in priority: health and housing were the causes most supported by Yield Giving, perhaps a sign that MacKenzie does not want to be recognized for working in just one area.
According to Lee, early data indicates that Scott’s unrestricted giving has had a profound effect on the organizations’ aspirations and financial viability.
“We know she believes the collective empowerment of nonprofit leaders is the path to achieving good,” Lee wrote.
Although there has not yet been enough time to measure the impact of donations, the professor hopes that this type of practice will serve as an example for other donors.
“We hope it will be an inspiration and a way forward to support these organizations, which are the beating hearts of communities everywhere.”
André Jankavski
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