Four Big Takeaways from MacKenzie Scott's Open Call Grant Drop

Earlier this week, MacKenzie Scott’s Yield Giving, along with Lever for Change, announced the winners of the inaugural Yield Giving Open Call, Scott’s first and highly anticipated foray into open grantmaking.

Ever the philanthropic norm buster, Scott couldn’t resist exceeding our already high expectations. Rather than stick to her original intention of awarding $250 million in unrestricted funding — $1 million to 250 organizations that serve “communities, individuals and families with access to the fewest foundational resources and opportunities” — Yield Giving announced $640 million in funding to a total of 361 organizations after receiving 6,353 applications.

Moreover, the funding flowed from a participatory evaluation process. In a philanthrosphere where foundation staff typically make the grantmaking decisions, Scott, in a move that also reflected Lever for Change’s prize competition playbook, took cues from the applicants themselves as well as an external panel of over 300 individuals from academia and the nonprofit world. This decision comports with her trust-based approach to philanthropy, which is infused with the belief that organizations can handle large and unrestricted gifts.

Unlike Scott’s 2023 giving, which primarily supported direct service providers, the open call sought to accomplish something distinct from that: “advance the voices” of “groups who have met with discrimination and other systemic obstacles.” The top focus areas self-reported by organizations that received funding were equity and justice, health and education, and while the jury’s still out on whether Scott’s groundbreaking philanthropy should be considered full-throated social justice funding, her support in this open call for groups seeking to build and leverage power among historically disenfranchised communities represents a notable — and welcome — development in the ongoing saga of her giving.

Since this is Scott, her open call also surfaced just as many questions as it answered. Will her latest round of funding convince her peers to adopt trust-based practices like unrestricted support and participatory grantmaking panels? Will she expand her footprint in the systems change space? And to what extent will she channel future giving through what she calls an “ongoing” open call effort?

Time will tell how that all plays out. In the meantime, let’s look at a few more definitive takeaways from Yield Giving’s open call results.

Systems change is in, direct support is (mostly) out

The list of open call recipients in Yield Giving’s grants database includes each organizations’ mission statement, focus areas and geographies served. Organizations self-select from 10 focus areas (arts and culture, education, environment, etc.), each of which includes a set of sub-focus areas. There are 52 of those in total, and practically all of the recipient organizations selected multiple ones, underscoring that these leaders view their work through an intersectional lens.

Out of 1,093 times organizations cited one of the sub-focus areas, 25% of them fell under the broader “equity and justice” focus area, followed by “health” and “education” (16% apiece), “economic security and opportunity” (15%) and “democratic process” (9%).

Scott’s focus here appears to be less on specific issues as much as on how organizations are galvanizing systems change around what are often multiple intersecting issues. For instance, organizations’ mission statements laid out their efforts to “create long-lasting, systemic change” (Future Leaders of America), “break down systemic barriers that keep low-income Virginians in the cycle of poverty” (Virginia Poverty Law Center) and “create systemic change” (Nebraska Appleseed).

That being said, I noticed similar verbiage in the mission statements of organizations that received her funding in 2023, which, as we’ve explored elsewhere, dispels the myth that Scott — given her immense past support for direct service providers — hasn’t been particularly interested in tackling the root causes of social, economic and health inequities. As such, I view the open call’s emphasis on systems change less as a departure from the norm for Scott and more as her thoughtfully building out another thematic thread in her portfolio.

Lucas Zucker is the CEO of Ventura, California’s Central Coast Alliance United for a Sustainable Economy (CAUSE), which received a $2 million gift through the open call. Zucker applauded the emphasis on systems change, saying in an email to IP that his organization was “deeply thankful to Yield Giving for making grants of this scale as general operating funds for not just providing direct services, but organizing communities to advocate for systems change. This is how we get to lasting transformational impact in the nonprofit sector.”

To Zucker’s point, Scott continued to support direct service providers with this funding. But she generally preferred outfits that enable community members to achieve “improvement in their wellbeing” by building power and longer-term resilience, versus those that meet basic needs like providing food, clothing and temporary shelter.

The evaluation process centered participatory input

Yield Giving launched its open call in March 2023 and closed the application window three months later. In July and August of last year, organizations that met the eligibility criteria advanced to a peer evaluation process — a participatory element that Lever for Change introduced to its competitions in 2019.

Under the Yield Giving model, organizations that applied for funding were asked to assess at least five other applications using a scoring rubric consisting of four criteria — equity-focused, track record, community leadership and team capacity. Each organization that completed the reviews received $500.

CAUSE’s Zucker called peer-reviewed applications “very rare among funders today” and said he was “surprised and excited to not only be asked to review and score other organizations' applications, but to be compensated for our staff time to do this work.” For Zucker, the peer review component “not only created a much more democratic process, but left us even more honored to ultimately be awarded, knowing it in part came from earning the respect of our peers in the trenches doing similar work across the country.”

The top-rated organizations from the peer review moved on to an external evaluation panel. Informed by what Lever for Change called a “final round of due diligence,” Scott and her team decided to expand the awardee pool by 111 organizations and the total award amount by $390 million.

The process was lengthy and transparent

By now, we’re familiar with the way gifts flowing from Scott’s “quiet research” end up in an organizations’ checking accounts. A nonprofit leader gets an unexpected phone call from a Scott rep, has a follow-up discussion or two, and eventually receives a large, unrestricted gift. In this model, Scott’s team does all the due diligence, and all the recipient has to do is take the money.

The Yield Giving Open Call flipped the script, at least to a degree. Organizations were asked to complete an application that took approximately 10 hours and commit to spend two and a half hours evaluating their peers, all while tracking their status across a process that took about nine months. Compared to Scott’s typical modus operandi, this was much more to ask of the target audience, which it defined as organizations with annual operating budgets of $1 million to $5 million for at least two of the last four fiscal years.

Gina Stovall, the deputy director of institutional giving at EnviroVoters, an organization dedicated to mobilizing around climate justice that received $1 million, said the open call involved “a very organized and transparent but long, nine-month process that required focused time — we imagine other small organizations were also challenged by this.”

Ultimately, however, the leaders I contacted found the process to be a rewarding one. Stovall was “surprised and excited” to pore over the scores and feedback. “We typically aren’t given access to the decision-making process, especially not from donors we don’t have an existing relationship with,” she said. CAUSE’s Zucker highlighted “the clear transparency as we moved through the multiple rounds of review, notifying us when we moved to the next stage as the pool narrowed.”

Angela Fernandez, the CEO of Safe Passage Project, which provides free legal services to undocumented youth and received $2 million, had a similar take, noting that “we were able to see our scores anonymously through the [grant management platform] Submittable after each round.” Just as importantly — perhaps more so — Fernandez said the open call’s participatory framework generated “a much higher level of review of language, mission and the voice of impacted communities” compared to other funders’ evaluation processes.

Scott continues to carry the torch for trust-based practices

While I rarely turn down the opportunity to gently encourage funders to adopt trust-based practices, the leaders I contacted brought up the importance of unrestricted support without being prompted.

“For too long, the world of philanthropy has leaned heavily on restricted, project-based grants that rely on the assumption that funders know more than practitioners do about their own communities’ needs,” CAUSE’s Zucker said. “Many funders are now moving toward trust-based philanthropy practices, and Yield Giving is proving itself to be a national leader in this area.”

EnviroVoters’ Stovall said her organization typically depends on foundation funding and rarely expends scarce resources on open calls that often “felt like a long shot.” But the Yield Giving opportunity changed her calculus. “We knew we had to give it a shot,” they said, “because on top of the potential of being awarded massive resources, the unrestricted gift would give our organization flexibility we don’t often come by and the absence of reporting requirements would earn us the same time we spent applying.” For Stovall at least, Yield Giving’s open call seems to have satisfied, in the words of Lever for Change CEO Cecilia Conrad, the grantmaker’s duty to ensure “that the process does not pose an outsized burden relative to expected benefits.”

Nevertheless, four years and roughly $15 billion after Scott first started cutting checks, research shows that large parts of the philanthropic sector are either slow-walking, backtracking or waving away the trust-based tactics she espouses. These decisions have real-world ramifications. Although it’s long been an unquestioned philanthropic norm, we need to be cognizant of how project-based funding can distort an organization’s mission. Meanwhile, a growing body of evidence shows that nonprofits have used Scott’s unrestricted support to expand programming, build up cash reserves and give their staff raises.

Scott, as my colleague Philip Rojc recently noted, has once again shown that loosening the strings and emptying the safe isn’t akin to splitting the atom. It’s simply a matter of will. But if anything, I fear that the more Scott expands her brand of trust-based giving in scope and scale, the more her peers will double down on the status quo, comforted by the fact that she has the norm-shattering corner of the grantmaking market sufficiently covered.

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