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Corporate & Institutional

Getting a Mackenzie Scott Gift:
Is Your Charity Ready for a Significant Windfall?

Walter J. Dillingham Jr., CFA
Director of Endowments & Foundations Practice for Wealth Markets

April 8, 2024

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In June 2023, Giving USA reported that total giving for 2022 was at $499.3 billion, a 10.5% decrease after inflation from the prior year—a result of the slowing economy and stock market drop.¹ Despite the slower growth, one positive trend in the philanthropic arena has been the continued grantmaking of MacKenzie Scott, an American novelist who has become a key philanthropist in current times. She has an estimated net worth of $34.8 billion, owning a 4% stake in Amazon, which was founded by her ex-husband Jeff Bezos.² Mackenzie Scott has given over $16.5 billion in unrestricted grants to more than 1,900 nonprofits.³

These unrestricted gifts have a significant impact on the nonprofits that receive them and can be life changing. Many of these nonprofits have received these large unrestricted funds for the first time and are exploring ways to maximize their impact. One way to plan for these unrestricted funds is to conduct an internal review of the organization’s short-term and long-term needs. On the short-term side, some nonprofits have expanded key programs and hired new staff. On the long-term side, a number of nonprofits have used these funds to start or build their quasi-endowment programs. Many are seeking best practices as they develop their game plans for the future of these funds

In this report, we provide some background on MacKenzie Scott’s philanthropy and highlight her giving plans so far. We discuss some best practices and review the importance of preparing a financial game plan that a nonprofit can follow. Key components of a plan can include:

1. Current assessment: Take a financial inventory of both short-term and long-term needs.

2. Investment policies: Build a customized investment policy statement.

3. Governance program: Set up policies and procedures for the endowment/quasi endowment program.

4. Communications plan: Develop a communications plan surrounding these new funds for the various stakeholders.

5. Strategic endowment plan: Build an endowment growth plan for the future.

BACKGROUND ON MACKENZIE SCOTT’S GIVING

MacKenzie Scott’s philanthropic program is nontraditional in that she has not formed a foundation to disperse the grants and has no formal application process. According to the New York Times, Ms. Scott formed a new shell company in 2019 in Delaware called Lost Horse. From there, the representatives of Lost Horse started to reach out to nonprofits directly. The Bridgespan Group, a nonprofit consultancy firm, also has contacted some of the nonprofits.⁴

The New York Times commented:

“On paper, Lost Horse’s Headquarters are a law firm office in a downtown Seattle Skyscraper and a tax firm in Los Angeles that handles family offices for high-net-worth individuals. Public records also show that Lost Horse has an office of its own in a brand-new eco-friendly building in Seattle, where many of the staff are actually located.”

The New York Times also commented that since Ms. Scott does not have a foundation that would require her to file an IRS Form 990-PF, there is very little information on her giving. They noted that she has been giving through donor advised funds.⁴

The magnitude of Ms. Scott’s gifts has been significant. The New York Times goes on to provide a comparison of her giving:

“Over the past year, Ms. Scott has announced grants of $6.6 billion. For comparison, The Gates Foundation said it paid out $5.8 billion in grants in 2020, the most recent year for which complete data is available…. Gates made those grants with a staff of over 1,700 employees….” ⁴

As a way to be transparent on the grants and provide more information to the nonprofit community, on December 16, 2022, MacKenzie Scott launched a giving website that highlights her grants and mission and announced the name as Yield Giving.⁵ On March 23, 2023, MacKenzie Scott also announced a $250 million “Open Call” initiative to the nonprofit community. The program was geared toward supporting community-focused organizations working with people and in places experiencing the greatest need.⁶ This was the first time she has solicited grants and was targeting organizations that have $1 million to $5 million in total revenue. The deadline to apply was Friday, May 5, 2023.⁶

As of the writing of this paper, Mackenzie Scott granted $640 million to 361 nonprofits through her Open Call program. This was more than double her original plan to give. (Source: CNN Business March 19, 2024)

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[1] Giving USA 2023: The Annual Report on Philanthropy; The Giving Institute
[2] Forbes website listing, 7/21/23.
[3] www.yieldgiving.org
[4] The New York Times, “The Fortunes of MacKenzie Scott,” Nicholas Kulish and Rebecca R. Ruiz, April 10, 2022.
[5] Candid, "McKenzie Scott launches Giving Website, details on the Charitable Process." December 16, 2022.
[6] Candid, "MacKenzie Scott's Yield Giving Launches $250 million open Call," March 23, 2023.

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Getting a Mackenzie Scott Gift: Is Your Charity Ready for a Significant Windfall?

Discuss Fundraising and Endowment Management with our team.

Getting a Mackenzie Scott Gift:
Is Your Charity Ready for a Significant Windfall?