The ripple effects of a transformative gift

As funders seek out new ways to address the complex challenges facing our world, collaborative funds have proven to be highly effective vehicles for catalyzing change. Rather than providing funding to one organization, a gift to a collaborative fund can reach a much wider group of changemakers working towards a shared goal – seeding collaboration, movement building and impact at scale.

Based on what we know of her giving, MacKenzie Scott understands this. According to Panorama Global, over $1 billion or 7 percent of MacKenzie Scott’s giving between 2020 and 2022 went to collaborative funds. Though her funding decisions are made behind closed doors, one clear through line underlies her philanthropy: the importance of centering the people most directly experiencing injustice.

As a collaborative fund working to end modern slavery, we share Scott’s conviction that “the leadership of people directly experiencing inequities is essential, both because it is informed by insights no one else can contribute, and because it seeds power and opportunity within the community itself.” This is why the Freedom Fund invests in frontline anti-slavery organizations in countries like Nepal, Ethiopia, and Brazil, many of them led by people with lived experience of exploitation and from highly marginalized communities.

We received an unrestricted gift of $35 million from MacKenzie Scott in June 2021, and two and a half years later, we are reflecting on how this funding has impacted our organization, what we have achieved and where we go from here. We hope that by sharing the lessons we have learned we can shed more light on the impacts of large, transformative gifts, especially on collaborative funds like ours.

Scott’s gift gave us the opportunity, space and motivation to:

1. Practice broad consultation and transparency in decisions about funding allocation.

In determining how to allocate the funds, we used surveys, focus groups and town hall meetings to solicit input from our staff and board. We sought to ensure the funding would have the greatest impact on the lives of vulnerable people and catalyze long-term impact, investment and evidence, and we committed to spending it within five years. By drawing ideas from across our global team, we were able to embrace creativity and innovation and make decisions that reflected the perspectives of those working most closely in communities. As we embark on a new strategic planning process this year, we are taking on these learnings by designing a deeply consultative process.

2. Fund existing programs for the long term.

We used Scott funding to deepen our existing “hotspot” programs, which provide funding and other support to geographically concentrated clusters of community-based organizations. The Scott funding allowed us to continue support for hotspots in countries like Myanmar, Indonesia, Thailand and Nepal, and to plan for the longer term. We were also able to dedicate more resources to our corporate accountability and movement building portfolios, reaching more organizations and individual leaders through grants and other forms of support.

3. Pilot and build new, innovative programs.

We expanded into new regions and underfunded issues by developing and launching new hotspots in Kenya, Brazil and Bangladesh, focusing on exploitative child domestic work, forced labor in logging and the commercial sexual exploitation of children. We took the time to start each new program with an inception phase, which enabled us to engage deeply with local organizations and communities and integrate their input throughout the strategy development process. We also began developing a more comprehensive suite of resources and offerings to help current partners with institutional strengthening in areas like fundraising, finance and governance.

4. Invest in internal systems and team capacity.

We identified several ways in which our internal operations infrastructure needed strengthening, especially as we prepared to scale up our programmatic impact. These included investments in a new grant management system, enhanced information technology systems, human resources capacity, and additional staffing in areas like communications. We see these investments as closely tied to our ability to develop and launch new programs, sustain existing work, raise additional funding and provide the high-quality support that our partners deserve.

5. Pass along unrestricted grants to our partners.

Scott's giving approach has inspired us to pass along the trust extended to us through our own grantmaking, particularly through the provision of unrestricted grants. Despite a strong focus on building trust with our partners, most of our past grants have been project-restricted due to the nature of our model and our issue-specific mission.

However, we know that unrestricted general operating funds are critical to organizational growth and sustainability, especially for newer organizations who are just beginning to build their institutional capacity. We dedicated some of the Scott funds to expanding our Survivor Leadership Fund, and we have also begun piloting unrestricted Elevate Grants, provided to hotspot partners who have been funded by the Freedom Fund for at least three years.

6. Embrace more partners who other donors might deem as too “risky.”

We ramped up efforts to support smaller, more nascent groups, many of them survivor led. These groups are typically at an earlier stage of development, coming out of informal community groups or survivor collectives formed by existing NGO partners, and they may not have the government registration, policies, or governance and staffing structures required by most funders. Through our new Accelerator Grants, we support these groups to build their organizational capacity so that they can ultimately become hotspot implementing partners and take on additional funding. We foster their growth through other forms of support such as technical assistance and peer mentorship from more established groups.

7. Advocate within philanthropy.

We embraced our role as champions for funding frontline organizations, recognizing the critical importance of organizations that directly impact and involve communities. In summer 2023, we launched Funding Frontline Impact, an online resource that offers practical grantmaking guidance and case studies from the Freedom Fund’s experience supporting frontline NGOs around the world. Scott’s funding allowed us the budget and time to reflect on our best practices and share more transparently about our decision-making processes.

Though transformational for the Freedom Fund, the MacKenzie Scott funding also brought with it a unique set of challenges. One of the most significant dilemmas was the tension between expanding our partner network and supporting existing programs - ensuring we did not put a strain on staff capacity or overwhelm grantee partners with additional requests and offerings. We have periodically evaluated each new initiative to both check on progress against planned activities and determine if we need to adjust timelines or scale back.

We committed to spending the Scott funds over five years because we felt an obligation to get as much of the funding as possible out to frontline partners in a reasonable time frame, in line with our and partners’ capacity. As a result, the Freedom Fund’s annual budget has increased from about $18 million in 2020 to about $28 million in 2024. As we think longer term, we are focused on securing significant amounts of new funding to sustain our work at this scale beyond the initial Scott gift.

We continue to build the case not only for the Freedom Fund’s ability to efficiently direct funds to frontline communities but also for the need to significantly increase philanthropic investment in the anti-slavery movement. Scott’s gift has made us more prepared to take on large gifts in the future. We have honed our programmatic thinking about our role in addressing modern slavery and introduced new initiatives and greater nuance within existing work. As we embark on our upcoming strategic planning process and plan for further growth, our learnings from the last two years will be invaluable.

Read a detailed reflection paper on the impact of MacKenzie Scott’s gift to the Freedom Fund here.