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MacKenzie Scott donates money differently to most other rich people

The world's wealthiest woman favours small charities and no-strings-attached donations.

As part of her 2019 divorce settlement from Amazon founder Jeff Bezos, MacKenzie Scott received 4 percent of the company, which at that time was valued at about $35 billion. That combined with other assets made her the richest woman in the world. Scott, however, said she had no desire to hold onto her fortune. She wanted to give it away to good causes “until the safe is empty.” And she did indeed go on to give away $8.6 billion within a single year. That put her ahead of many other notable philanthropists, including Bill and Melinda Gates, Warren Buffett and George Soros.

But something else that sets Scott apart from many other billionaire donors is how she donates money. When deciding which charity to give some of their money to, most people, including the uber-rich, consider two major points: which cause the organisation is trying to help, and how effective the organisation is at helping that cause. However, unlike regular donors, the very well-off usually enlist the help of an army of consultants, specialists and technocrats to assist them in answering these questions. They usually also have the pull to get whatever information they need out of charities and also to influence how their gift is spent.

It has subsequently become fashionable for philanthropists to distribute their money via thorough vetting, detailed application processes, careful monitoring and evaluation, and grants that are strictly linked to specific outcomes. The Bill and Melinda Gates Foundation is the poster child for this way of giving. The motives behind it are simple and well-intentioned: ensure the money goes where it will do the most good. It’s basically a co-opting of standard business principles around making sure you get the biggest return on your investment possible, which is why it’s such a popular approach for donors who made their money by being successful businesspeople.

This strategy has led to a lot of people being helped and a lot of lives being saved. However, there are some drawbacks to this way of doing things. For one, it’s much harder for smaller charities to access because they have less resources to spend on applying, networking, and complying with the grant requirements. The laser focus on outcomes also makes it harder for orgs to justify spending the donations on new staff or equipment, even though these investments may lead to more charity recipients being helped overall. Which is why lots of people in the charity sector are interested in the different approach Scott is taking.

Most of Scott's donations are given to small charities and are unsolicited (i.e. her people reach out to the non-profit rather than the other way around) and come without any requirements to spend the money in any particular way. She also favours organisations run by people with lived experience of the issue they are trying to fix. All this tends to be warmly regarded by the charity staff who have benefited from her money, who appreciate the lack of bureaucracy and being trusted as experts on their cause.

There are some concerns. Scott’s donation method increases the chance of both parties being scammed. And while this may be irritating but survivable for Scott herself, the numerous smaller charities who have received phishing emails from con men pretending to be Scott risk having their operations financially damaged if they fall for it. There’s also been criticism surrounding Scott's lack of transparency regarding her donation criteria and the fact it's very difficult for non-profit leaders to contact Scott to make a pitch for funds.

The overall consensus, however, seems to be that Scott’s donation methods could provide a useful, complementary alternative to the Gates Foundation style of funding. After all, sometimes when it comes to making the world a better place, some tasks are best handled by the giant technocratic global organisation favoured by philanthropists like the Gates and some are more the remit of the on-the-ground local charities Scott has targeted.

For example, scale is needed to effectively distribute Covid vaccines in poorer countries, so few would disagree with the Gates Foundation's decision to pour money into the World Health Organisation and Gavi (a vaccine distributor). Similarly, few would say the local foodbanks Scott funded were not also deserving causes, or that knowing their own area and the needs of their own community were not valuable tools for these charities to have. Of course, whether the world should be relying on the generosity of a few super-economically-successful individuals to make itself a better place is a separate question.

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