Breaking the Mold: The Transformative Effect of MacKenzie Scott’s Big Gifts
- Hazel Hennessy
- 3 days ago
- 4 min read
Updated: 2 days ago
Unlocking the Potential of Unrestricted Giving: A Path to Lasting Impact
In the evolving landscape of philanthropy, the conversation is increasingly focused on the power of unrestricted giving. In response to this interest that many members of Philanthropy Ireland had to Mackenzie Scott’s grantmaking approach, we wanted to provide a brief insight into her unrestricted funding and both the positive and negative outcomes to this approach to philanthropy.
Inspired by the groundbreaking approach of McKenzie Scott’s large-scale, unrestricted gifts to nonprofits, many funders are beginning to recognize the transformative potential of this model.
A recent study on the impact of these donations reveals that unrestricted funding not only strengthens nonprofits but also drives innovation, resilience, and long-term sustainability. However, the research also points to some hesitation among funders in fully embracing this approach. So, what can we learn from this shift, and why should philanthropists and funders consider integrating unrestricted giving into their strategies?
Three Takeaways for Philanthropy Ireland members:
Unrestricted funding benefits both immediate programs and leads to increased confidence, financial stability, job satisfaction and mission focus.
Roughly 50% of foundation leaders believe nonprofits are only “somewhat,” “slightly,” or “not at all” able to handle large gifts with no restrictions. Indicating a need to ask more questions of grantees to provide confidence in their ability to handle large gifts or to look at what steps to put in place to better support charities to handle large donations if that is the most impactful route.
Most leaders report that they are managing grant funds to ensure there is no financial cliff as they focus on long-term financial sustainability.
The Power of Flexibility in Giving
Unrestricted funding gives nonprofits the flexibility to allocate resources where they are most needed, whether it’s improving existing programs, responding to emerging needs, or investing in long-term growth. Nonprofit leaders who received these gifts reported feeling more empowered to make strategic decisions without the constraints of rigid funding requirements. This freedom allows them to innovate and experiment with new ideas, which is crucial in today’s fast-changing world.
More than 70% of nonprofit leaders indicated that unrestricted grants significantly boosted their confidence in leading their organisations, with many citing a reduction in burnout and an increase in job satisfaction. By providing nonprofits with the freedom to prioritise what matters most, unrestricted funding can have a ripple effect—benefiting not only the immediate programs but also the overall organisational health.
Resilience Through Long-Term Support
Beyond fostering innovation, unrestricted gifts also provide a safety net for nonprofits. These funds give organisations the ability to plan for the future without the pressure of securing new funding every year. The long-term benefits are clear: organizations that received unrestricted funding from McKenzie Scott reported not only strengthening their programs but also becoming more resilient in the face of future challenges.
In fact, many organisations shared that the credibility gained from receiving these prestigious gifts helped them attract additional funding. This "stamp of approval" opens doors to new opportunities, creating a cycle of growth and sustainability. Unrestricted grants empower nonprofits to respond quickly to changing community needs, ensuring they are better equipped to weather unexpected crises or shifts in demand.
The Case for a Diversified Funding Approach
While the advantages of unrestricted funding are clear, the study revealed some hesitancy within the philanthropic community. Many funders expressed mixed views about providing large, unrestricted gifts, citing concerns about financial risks and whether organisations have the capacity to manage such funds effectively. Some funders worry that large gifts may unfairly favor certain organisations, while others remain uncertain about the long-term effects of this funding model.
However, experts argue that a diversified approach to giving—one that includes both unrestricted and project-based funding—can create a more sustainable and equitable ecosystem for nonprofits. Unrestricted gifts are particularly valuable for organisations that need flexibility to grow, advocate for change, and build capacity. This approach ensures that nonprofits are empowered to address immediate needs while also investing in their future.
Why We Need Unrestricted Giving More Than Ever
In today’s philanthropic landscape, flexibility is key. Nonprofits are facing a host of challenges, from financial pressures to increasing demands for their services. At the same time, many organisations are pushing the boundaries of innovation and social impact. Unrestricted gifts provide the space for nonprofits to adapt, grow, and make a lasting difference in their communities. They help organisations become more resilient, creative, and better equipped to tackle the complex problems they face.
As funders, there is a responsibility to think beyond traditional project-based funding and explore how unrestricted giving can play a critical role in strengthening the nonprofit sector. By offering nonprofits the freedom to allocate resources where they are most needed, we help them not only survive but thrive in a rapidly changing world. The results are clear: unrestricted funding leads to more effective, innovative, and sustainable organizations that can drive real, lasting change.
Find out more:
Comments