MacKenzie Scott’s recent announcement of $2 billion in gifts, along with her decision to begin investing in mission-driven for-profit ventures, is more than a demonstration of generosity—it challenges institutional philanthropy to adapt and evolve. Her approach prioritizes trust, equity, and transformative impact, offering a stark contrast to the traditional practices that often dominate institutional giving.
For those of us in the institutional funding sector, Scott’s model holds valuable lessons. Large funders—be they government agencies, foundations, or corporate programs—play a critical role in sustaining nonprofits. Yet, their processes often favor control over collaboration, structures over flexibility, and risk aversion over bold, innovative solutions.
Scott’s commitment to unrestricted funding is a striking example of how trust in nonprofit leadership can maximize outcomes. By allowing organizations to allocate resources as needed, her approach shifts power dynamics, enabling nonprofits to address their most pressing challenges—whether they be infrastructure, staff, or program-related.
Her focus on underfunded regions, such as the South, and on historically excluded populations, including women and people of color, highlights the necessity of equitable philanthropy. Too often, institutional funders concentrate on established organizations, inadvertently sidelining smaller, community-based groups that drive systemic change at the grassroots level. Scott’s inclusive approach underscores how philanthropy can dismantle inequities and amplify impact.
Institutional philanthropy, with its ability to offer multi-year funding and foster cross-sector collaboration, is uniquely positioned to complement Scott’s methods. By investing in long-term capacity-building, influencing policy, and convening diverse stakeholders, institutional funders can enhance systemic impact while staying true to their mission.
Examples of this shift are emerging. Initiatives like Blue Meridian Partners (BMP), which pools philanthropic resources to tackle large-scale social challenges, exemplify how collaboration and innovation can drive meaningful change. Much like MacKenzie Scott’s emphasis on trust and equity, BMP takes a novel approach that reduces the inefficiencies and duplications often seen in siloed philanthropic efforts. BMP’s focus on outcomes over process, combined with its willingness to take risks on transformative projects, mirrors Scott’s disruption of traditional grantmaking norms.
Blue Meridian Partners stands out by bringing funders together to address big challenges at a scale that individual donors often cannot achieve. By offering large, flexible, multi-year funding — as evidenced by their $124 million gift to the HBCU Coalition — BMP allows nonprofits to focus on meaningful impact without being tied up in strict goals or detailed reporting requirements. This approach reflects a belief in trusting nonprofit leaders to create change in their communities—an idea MacKenzie Scott has also embraced with her unrestricted funding model.
For traditional institutional funders, BMP and Scott’s models offer a blueprint for rethinking their roles. By adopting collaborative frameworks, emphasizing trust-based relationships, and being bold enough to fund at scale, institutional funders can maximize their impact. They might consider pooling resources, loosening or removing restrictions, and shifting focus from short-term outputs to long-term outcomes. These changes could unlock the potential for philanthropy to not just address systemic inequities but to transform the structures that perpetuate them.
Scott’s philanthropy also prompts critical questions for institutional funders: Are current practices advancing equity or reinforcing the status quo? Are funders empowering grantees to innovate, or are they imposing constraints? Are they providing the funding and resources for grantees to collect and analyze data that is important to the funders? And most importantly, are they bold enough to embrace the risks required to achieve lasting, systemic transformation?
While no single approach can address the complexities of societal challenges, Scott’s model has sparked a conversation that institutional funders cannot ignore. By blending trust-based practices with the rigor and accountability of traditional grantmaking, the philanthropic sector has an unprecedented opportunity to redefine its impact—for nonprofits, communities, and society at large.
