As We Enter a New Era of Checkbook Philanthropy, Can Donors Avoid the Pitfalls of the Old One?

There was a time not too long ago when to be at the height of philanthropic innovation was to unequivocally reject “checkbook philanthropy.” That is, ad hoc support — often unrestricted or otherwise with little follow-up — for organizations a donor is connected with or just stumbles across. Instead, strategic philanthropy was all the rage: finely-tuned commitments toward defined external goals, often structured around a specific “theory of change” and incorporating robust metrics.

But today, in the era of MacKenzie Scott and lots of (talk about) trust-based giving, strategic philanthropy has lost much of its cutting edge. Indeed, checkbook philanthropy of a certain kind is back in vogue. It’s not exactly like the earlier incarnation, which was sometimes derogatorily described as “giving without thinking.” Instead, there seems to be a refreshing embrace of a type of well-considered philanthropy that is not tied to a top-down, prescriptive strategy or overloaded with concerns over metrics and ROI.

The best of this new brand comes in the form of unrestricted giving, and though I should note that most funders still aren’t on board, the trend is a welcome one. Nonprofits shouldn’t have to scramble to align themselves with their a funder’s latest strategy only to discover that strategy has “evolved” a year on, precipitating yet another scramble, programmatic disruptions and reams and reams of paperwork. The new era of checkbook philanthropy promises to put those trials in the past as funders bestow upon their recipients the holy grail that is multi-year, general operating support.

Exemplified at the highest level by Scott herself, Checkbook Philanthropy 2.0 differs from its antecedent in that there is, it seems, an element of strategy at play. This isn’t “giving without thinking.” Rather than simply penning checks to alma maters or backing groups they happen to like, the new checkbook philanthropist aims to resource the field, moving money to build up a set of organizations over the long term. In time, or so the unwritten theory of change goes, those organizations will act in a bottom-up way that just happens to gel with what the funder wants.

That’s all well and good if it works. The problem, though, is that some of the same challenges inherent to the older iteration of checkbook philanthropy still haunt its more enlightened cousin.

No, I’m not talking about the argument that smaller nonprofits lack the capacity to “absorb” or otherwise make use of expansive general support. Though that’s still a live debate, our sense here at IP has always been that those concerns are overblown. Rather, we need to ask how well the new checkbook philanthropy deals with the biases of affiliation.

When a donor engages in old-school checkbook philanthropy, they tend to give to groups with which they’re affiliated or feel some connection. That could be an alma mater, or a local charity they’re involved with, or a medical institution addressing a condition affecting the donor or their family. While the sector’s cutting edge may feel itself well and truly past that sort of giving, it’s important to note that the classic checkbook approach remains the norm across much — even most — of the wider philanthrosphere, and even at the upper echelons of grantmaking.

The thing is, Checkbook Philanthropy 2.0 hasn’t necessarily evolved beyond the impulse to support what happens to be proximate to the people making the decisions. Take progressive-leaning funders, among whom the push to lift restrictions has been particularly pointed. Sure, their giving might not be wedded to the personal considerations of a founding donor. But is it always the case that it uplifts community voices, as is often claimed? Or is it more accurate to describe that giving as reflective of the ideological and professional milieu of the people holding the purse strings?

To look across the aisle for a second, conservative philanthropists have been engaged in what I’ve been calling Checkbook Philanthropy 2.0 for a while, bestowing general support on a field of organizations they know well, organizations they believe to be pushing the change they want. Lots of us have argued that their approach has been strategically effective — more so, in fact, than the “strategic” philanthropy of mainstream liberal grantmakers.

But despite recent wins for the right, like stacking the judiciary with judges amenable to radical moves like nixing Roe v. Wade, conservative philanthropy critics haven’t been all enthusiasm. There’s been hand-wringing, for instance, about the Checkbook Philanthropy 1.0 of right-leaning donors like Ken Griffin. Other commentators have questioned conservative givers’ reflexive support for a field of established think tanks and policy groups, even as Trumpist populism all but obliterates old conservative shibboleths — with old-guard conservative philanthropy left standing on the sidelines.

So while we hope the Checkbook Philanthropy 2.0 of progressive-leaning grantmakers will be more effective than 2010s-era strategic philanthropy in achieving social, economic and environmental justice aims, it’s worth keeping the potential downsides in mind — that is, ideological groupthink, reflexive funding for established groups and causes, and the possibility of getting blindsided by inconvenient “bottom-up” developments — like, say, a potential turn to the right among some Americans of color, with implications for how progressive groups go about their racial justice and movement work.

That brings me to another potentially concerning aspect of the new checkbook philanthropy, one related to the issues around affiliation but worth a separate mention. Ever since strategic philanthropy became all the rage, the sector has played host to a rapidly growing cohort of philanthropy-serving professionals. Whether they’re consultants, staff at PSOs or intermediary organizations, DEI/CSR/ESG experts, you name it, part of their role has been to serve the strategic needs of emerging donors. Their work also often dovetails with that of the wealth management industry.

Don’t get me wrong: The undertakings of the consultocracy are often highly laudable, and these professionals can bring a deep well of experience to the table. But in the end, they’re still looking to drum up business. And in a sector looking to embrace Checkbook Philanthropy 2.0, it’s worth asking how their presence will affect funders’ actions.

The prime recent example of this is MacKenzie Scott and Yield Giving. Famously operating with the assistance of the Bridgespan Group and rejecting a traditional foundation model, Scott has given the consultancy sphere a big vote of confidence as she rolls out today’s highest-profile program of Checkbook Philanthropy 2.0.

Some time ago, I got pushback for, as at least one reader saw it, suggesting that Scott’s consultants were setting the terms of her giving. While that’s clearly not the case — like any big donor, Scott is the first and final authority over where her money’s going — I still think it’s worth asking to what degree these new megadonors’ giving has been influenced by the folks they pay to help oversee it.

Looking at a recently released report on trends in Scott’s giving, it’s hard not to pick up the scent of the professional U.S. philanthropic mainstream. Gifts go to larger organizations (but not too large), center on education and healthcare, and mostly go to groups based in the U.S. Lest we forget, Scott has also bestowed ample direct support on a wide array of PSOs and philanthrosphere interests, including the Bridgespan Group itself.

This isn’t necessarily a problem. Checkbook Philanthropy 2.0 is about resourcing the field, after all, and the theory of change is that strengthening these organizations will yield tangible, long-haul gains without the need for onerous funder supervision. But still, one has to wonder how this profusion of professionals, who came up during the high tide of strategic philanthropy but now find themselves unmoored from top-down “strategy” under less self-aggrandizing donors, will interpret their remit. Will they innovate? Will they truly channel community voices and priorities? Or will they default to the familiar and urge donors along safe, well-trod paths?

I don’t know the answers to those questions, but as Checkbook Philanthropy 2.0 gains steam among leading funders, they’re due for some exploration.

Featured