MacKenzie Scott’s no-strings gifts extend beyond grantees

MacKenzie Scott stormed the philanthropy world last year with $5.7 billion in unrestricted donations to hundreds of charities. The seven- and eight-figure gifts were the largest many had ever received. At the time, few people understood the multiplier effect those gifts would have or how truly wide a net she was casting. The many tentacles of her giving are poised to touch charities far beyond those that received money directly from Scott.

Joe Neri, CEO of the Illinois Facilities Fund, had an inkling that would be the case when his group received $15 million from Scott. Neri’s organization lends money to other charities. Many of the loans it provides help nonprofits make improvements like replacing a leaky roof or constructing a new medical clinic.

Neri knew his organization would lend much of that $15 million to the nonprofits it finances and that the impact of the money would end up being closer to a $75 million donation over time, allowing his organization to help far more people.

Scott’s gift is considered reliable equity by loan-making financial institutions, corporations, and foundations. That means Neri can borrow additional money — in this case around $60 million, he says — that his fund can then lend to charities. The money also generates income when the charities pay the fund back.

“I call it the gift that gives forever,” says Neri.

Another way Scott’s giving is extending beyond original beneficiaries: Many nonprofits that received donations are distributing portions of the money to their affiliates or other small charities.

For example, Scott gave a combined $162 million to 22 Easterseals affiliates, plus the national office in Chicago. Gifts ranged from about $1 million up to the $15 million that the national office received, says Angela Williams, CEO of...