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“Seeding by ceding”: What we know about the latest group of organizations funded by MacKenzie Scott

By Grace Sato
July 22, 2021

Pie chart showing number of organizations by transparency seal status n=231

Last month, philanthropist MacKenzie Scott announced that she, in partnership with her husband Dan Jewett, donated another $2.74 billion to philanthropic entities. Her third round of grants in less than a year, Scott wrote that grant recipients were “286 high-impact organizations in categories and communities that have been historically underfunded and overlooked.” These included higher education institutions with students from underserved communities, arts organizations, and social sector infrastructure organizations. (Editor’s note: Scott awarded a grant to Candid.) 

As we did with Scott’s previous grant recipients, we examined the organizations and projects Scott selected to see what we might learn about her approach to grantmaking. By matching the list she provided with organizations in our database, we were able to analyze her grantees along five dimensions: size, geography, issue (subject area and population served), and transparency.i Although Scott discloses who receives donations, she does not say how much is awarded to each organization, so we do not yet have information about grant size distribution in this round of giving. (Our analysis of Scott’s 2020 grants is available here.) 

Organizational size 

Organizations that received a grant from Scott varied in size, but the majority have annual revenues in the $1 million to $5 million range. This is a change from her previous round of grants, where more than half of the organizations had annual revenues between $10 million to $100 million. In other words, recipients in this latest round of funding tended to be smaller. 

Chart on number of organizations by annual revenue n=224

Scott supported more than just nonprofit institutions. This time around, more than 30 recipients were fiscally sponsored entities, collaboratives, or specific funds within organizations. For example, several donor collaboratives housed at Borealis Philanthropy were individually supported, including the Black Led Movement Fund, the Disability Inclusion Fund, and the Spark Justice Fund. Because these recipients are not organizations with IRS 990 filings (from which we derive revenue data), they are not included in the graph above.  

Geography 

Scott’s grants were again oriented to recipients in the United States, with grantees located across 28 states as well as D.C. and Puerto Rico. Half of the grantees were located in California, New York, or D.C. This time, however, non-U.S. entities were also supported, including 11 based in India, two in Africa, and one in Mexico.  

Table of top 10 states grantee locations and number of grantees

Issue (subject area and population served) 

When it comes to issues funded, Scott explained that her selection process involved “identifying and evaluating equity-oriented non-profit teams working in areas that have been neglected,” including arts, higher education, and social sector infrastructure institutions as well as organizations working to address discrimination against ethnic and religious groups. An analysis of organizations and projects funded against Candid’s Philanthropy Classification System validates her statement. 

In terms of subjects and activities being supported, arts and culture rose to the top of the list, followed by philanthropic and nonprofit management, community and economic development, and education. 

Chart showing the number of grantees by subject area n=272

Scott’s equity-oriented approach is also evident when analyzing grantees based on the populations they serve. There is remarkable diversity and intentionality in the projects and organizations she chose to fund. For example, we found that 87 recipients (nearly one-third of her grantees) have a specific focus on racial equity.ii Within that group, 22 serve African Americans; 14 serve Asians and Pacific Islanders; 12 serve Hispanics and Latinos; and 12 serve Native Americans.  

Chart showing the number of grantees by populations served n=275

Transparency 

Consistent with our previous analysis, Scott’s grantees continue to be more transparent than the general nonprofit population.  Nearly half of the organizations have earned Candid’s Seal of Transparency by claiming and updating their profile on guidestar.org. This is almost 10 times the rate of nonprofits in general.iii 

Additionally, 59 of 231 organizations (25 percent) have shared data with Candid about the race or ethnicity of their staff, executive leadership, and/or their board.  

As we noted in our last post, transparency does not guarantee effectiveness or impact. But it does demonstrate a willingness to be examined and signals accountability, leadership, and trust. In light of the recent commitment donors have made to fund BIPOC-led organizations and grassroots movements, nonprofit transparency, particularly about the demographics of leadership, is a step toward building a more equitable sector. 

 Pie chart showing number of organizations by transparency seal status n=231

Conclusion 

MacKenzie Scott’s most recent round of grantmaking follows the hallmarks of her giving over the past year. Her latest blog is aptly titled “Seeding by Ceding,” as she has continued to award very large, unrestricted donations, allowing nonprofits the flexibility to determine how best to spend the funds. In addition, addressing equity and economic mobility have been common themes throughout. This is especially the case with this latest round of grants, which has focused on smaller organizations and those addressing racial equity and economically disadvantaged populations. 

[i] Comprehensive data about grantees was not available for every analysis. Therefore, each chart contains information about how many grantees are represented.
[ii] Here, we define racial equity as any organization or project coded as explicitly benefiting communities of color, according to our Philanthropy Classification System.
[iii] Currently, only nonprofit organizations can receive a Seal of Transparency. Analysis is based on grantees that are U.S.-based nonprofits and excludes fiscally sponsored entities, projects/funds within organizations, and non-U.S. organizations.

 

Thanks to Jenna Allen, Carol Brouwer, and Guy Mika for creating the data set used in this analysis.  

Tags: Foundations and grantmaking; Giving; Equity