In 2020, the American novelist and philanthropist MacKenzie Scott donated $6 billion to more than 500 organisations in the United States. The gift made the news because of its size, no doubt, which stood in stark contrast to the philanthropic efforts of Scott’s ex-husband Jeff Bezos. But what was truly exceptional was the manner of giving and destination of the gifts.
First, Scott donated directly to active charities and organisations, without middlemen – she did not even create a website to publicise the gifts. Second, the gifts were unrestricted, allowing recipients to manage funds as they saw fit. Third, Scott’s team took on the task of due diligence themselves, so recipients were asked to provide minimal post-grant reporting. Finally, the recipients were atypical in their lack of perceived glamour: no concert halls, museum or hospital wings, or endowed professorships would be bearing her name. Instead, Scott gave to causes often ignored by philanthropists, such as women-led and Black women-led organisations, such as Black Girls Code, which provides technology education to African American girls and the YWCA Metropolitan Chicago.
This rather unusual way of giving has already caught other philanthropists’ attention. But the smaller, non-profit arts sector is usually slow to catch up with trends and arts philanthropy generally follows a traditional pattern. Given the financial, social and cultural rollercoaster of the past year, it is worth asking whether Scott’s actions could become a highly visible precedent for the future and a tipping point in givers’ attitudes.
Fundraising in the arts is beset by restrictions and bureaucracy. Philanthropists prefer restricted and project-based gifts, which they make to highly visible causes that are usually suitable for acknowledgement – new buildings, galleries, studios, acquisitions and the restoration of artworks. Provision for the necessary supporting operations, such as salaries or infrastructure, are not normally included. Donations from multi-million or billion-dollar foundations are generally tied to labour-intensive reporting on the use of the funds and their ‘real’ impact. In my time working within development, I can testify to the lengthy reporting requirements that accompany even small donations.
Institutions do not like it but, fearful of deterring donors if conditions and expectations are not met, they have created development strategies around anticipated restrictions, forced to think up projects to attract funding, and create teams of staff to fulfil donor expectations. As a consequence, institutions have been forced to expand in certain donor-guided areas such as building projects or, in the case of museums, collecting in particular fields. ‘Core’ funding in the arts in the United States and Europe has decreased, but institutions have been reluctant to seek support for the more ‘mundane’ aspects of creating a great arts programme: minimum wages, diversity, equality, and even the leaky roof or the electricity bill.
In every respect, Scott’s actions broke the status quo of philanthropy. But perhaps the most important shift is one of trust. Scott trusted the institutions to use her gifts in the most effective way. The issue of a lack of donor trust in institutions precedes the Covid-19 crisis. A study in 2017 by Give.org of 2,100 donors in the United States found that 49 per cent of respondents had ‘low levels of trust’ in charities, despite 73 per cent saying it was ‘very important to trust a charity before giving’. The arts and culture charities were found to be the least trustworthy sector.
In a second important precedent last year, the Ford Foundation, which has supported the arts with a focus on social change and diversity, also veered towards a policy of greater trust. Its $1 billion Building Institutions and Networks (BUILD) initiative is giving social justice organisations unrestricted funding for general operating support and ‘core support for institutional strengthening’, something rare for a foundation of this prominence pre-pandemic.
Scott and her team chose to give to ‘unsexy’ causes. Spurred by the Covid-19 crisis and social justice movements such as Black Lives Matter, others follow – the Baltimore Museum of Art recently announced a series of gifts that will allow it to establish evening opening hours and which enabled the immediate implementation of pay increases for hourly workers, from $13.50 to $15.
While change will not happen overnight, one initial step towards reducing restrictions in support could be to encourage split gifts, allocating a percentage of any gift to operations or to unrestricted support. A compromise of sorts, which could help museums and cultural institutions stay afloat and allow donors to be part of the solution and still be heard. This small step alone could open the doors to better communication between donors and institutions in the future.
Lessons have been learned from this pandemic. One of them is that the funding of cultural institutions must be diverted from the idea that so-called ‘core’ funding comes only from ticketing, commercial activities, state funding or endowments.
Whether or not the ‘MacKenzie Scott effect’ continues, relationships between donors and institutions must be changed to ensure that both donors’ concerns and institutions’ needs are heard and acknowledged by all parties. Private supporters must understand that they have a responsibility within the institutions that enrich our cultural lives and protect our artistic heritage – and that there is no shame in protecting staff or paying to keep the lights on.
Leslie Ramos is a fundraising and development consultant and founder of ArtEater, an independent philanthropy agency for the arts.