Trust, control, and what the evidence shows

Last year the Center for Effective Philanthropy released the final instalment of a three-year study into MacKenzie Scott’s giving: $19 billion, no strings attached, to more than 2,000 nonprofits. The report is called Breaking the Mold, and we keep coming back to it because it does exactly what it says. The headline numbers aren’t what interests us. What interests us is the gap between what the evidence shows and what funders are willing to do with it.

Many funders are genuinely sceptical of unrestricted giving and trust-based philanthropy. Their concerns reflect the demands of their roles and the questions they need to answer from their boards. If we don’t restrict the funding, how do we know it’s being used well? How do we measure impact? What’s our due diligence story if something goes wrong? What do we tell our board? Will people tell us early enough when things aren’t going well?

We’ve heard versions of these questions in our work with funders and philanthropic organisations for over a decade. They come from people who genuinely care about getting this right, not just from people protecting themselves.

The Scott model does something most funders don’t. It separates due diligence and trust in time, rather than running them in parallel.

Scott’s due diligence is anything but light. Under this original approach it was rigorous, extensive, and conducted entirely behind closed doors. Organisations didn’t apply. They didn’t even know they were being considered. A quiet vetting process assessed them thoroughly before any gift was made. In that sense it looked more like traditional philanthropy than trust-based giving: serious gatekeeping, serious scrutiny. From the outside it’s been called a black box, and in terms of process that’s a fair description.

Then comes the part almost no funder replicates. Once the decision was made, Scott lets go completely. No reporting requirements. No time limits on when funds must be spent. No restrictions on use. The due diligence happened before the relationship began, it created trust in and of itself. That opened something restricted grants almost never can: freedom for organisations to make their own decisions about the work.

What the research found

The CEP research tracked what arose from that freedom. Across three years, 813 grantee surveys, and interviews with 243 foundation leaders, the findings are consistent. 93% of leaders reported that the grant moderately or significantly strengthened their organisation’s ability to achieve its mission, including by expanding existing efforts or introducing new approaches. Recipient organisation leaders also shared that the gifts had a positive impact on their confidence in their own leadership, reduced their burnout and supported innovation.

Almost 90% of recipients said the grants strengthened their long-term financial sustainability. Two years on, Scott grantees held twice as many months of operating cash as comparable organisations. Leaders reported greater confidence, reduced burnout, and more capacity to innovate. Half said the gift made fundraising easier, not harder.

And yet: Only 7% of foundation leaders say their foundation’s practices have been particularly influenced by Scott’s giving model, although most say their staff, leadership team or board has discussed her giving.

Most have talked about it. Few have changed because of it.

60% of foundation leaders cited funding cliffs as their main concern, even when only 7% of nonprofit recipients anticipate having ‘a lot’ of difficulty covering ongoing costs. We have seen real funding cliffs in Australia, where large but time-restricted gifts led organisations to scale beyond what they could sustain once the grant ended. The concern isn’t wrong. But removing time restrictions is precisely what prevents the problem.

The evidence is available, so this isn't a knowledge problem. If unrestricted time unlimited funding provides results like these, the gap between knowing and changing is itself a finding. Something other than evidence is keeping practice in place.

The common objections are familiar: Scott operates at a scale most foundations can’t match, the Australian context is different, our boards need something to point to. Some of these are worth taking seriously. Others are doing different work.

What we keep finding underneath the questions about accountability is a question about control. Not whether funders can trust the evidence, but whether they can really trust the organisations they support.

This is the first post in our series What the Evidence, Expertise and Experience Says. Written by May Miller-Dawkins and Jo Taylor, edited by Courtney Collins.
Next week: the Ford Foundation’s BUILD program, and what a decade of independently evaluated unrestricted funding tells us.