Dear MacKenzie Scott and Yield Giving,

We believe the pivot in your latest Yield Giving open call missed the mark and strayed back into business-as-usual philanthropy, limiting the effectiveness of nonprofits who are the most well-positioned to make impact on the ground.

Your past philanthropic efforts show it is possible to do the right thing by nonprofits through large, multiyear, unrestricted grants. Over the years, you have continued to evolve your strategic approach with the help of external feedback from those of us in the community and, as a result, we hope to influence future iterations of your giving by sharing key opportunities to improve your latest open call to better serve communities in need. 

You are uniquely positioned to inspire a philanthropic revolution that will have a huge social impact ripple effect. It’s time for philanthropists to change the way they approach their giving. 

This letter has 3 objectives to consider:

• Lift up model philanthropy approaches such as your original effort;
• Illuminate little known challenges facing nonprofits in their fundraising efforts;
• Suggest actions that will get us to real impact at scale.

Model Philanthropy

To give away what you know is a disproportionate amount of money “until the safe is empty" is actually doing the work of the Giving Pledge. Few other signatories have done the same. Giving $14 billion to 1,600 organizations with zero required reporting and the trust that they know what to do with the capital is significant.

Trust-based philanthropy is necessary. Many grantors and foundations are trying to make this shift – simplify the funding application process, reduce reporting requirements, cut back on spending restrictions – but you have shown that this can be done faster and at a significant scale.

Your blog posts demonstrate you’re grappling with the beast of philanthropy. However, Yield Giving's tagline is "to give up control.”  We're asking you to truly follow through on that promise.

The Hidden Challenges

This Yield Giving Open Call requirement masks some real dilemmas for nonprofits:

“Organizations must have an annual operating budget of at least $1 million and no more than $5 million for at least two of the last four fiscal years to be eligible to apply”.

This excludes 92% of nonprofits who could benefit from this funding, representing more than 1,500,000 (1.5 million) nonprofits, 12,300,000 (12.3 million) nonprofit workers, and almost 10% of the workforce in the U.S alone. Here are the implications:

• 88% of nonprofits have budgets less than $500,000, such as volunteer-run nonprofits, grassroots fiscal sponsorship projects, activists and community organizers. Most are short staffed already, let alone able to afford staff with sophisticated expertise in grant writing and reporting.

 

• The term “capacity” is used as a catch-all concept to ignore actual work being done by people on the ground. The vast majority of these nonprofits are led by underrepresented groups (BIPOC, LGBTQIA+, disabled, rural, immigrant, low socioeconomic status, etc.). 

 

• Nonprofits with lesser budgets can have just as much (if not more) direct impact because they are adjacent to the lived experience expertise needed to create solutions. 

 

• 30% of nonprofits fail before 10 years of operating. This percentage would decrease dramatically through access to more significant capital. 

Call to Action

For the philanthropy sector at large, we ask for:

• Open format applications with simple steps (executive summary, project description, potential outcomes). This should take less than an hour to complete.

 

• Participatory funder model where donors commit to several years of non-restricted funding to allow nonprofits to stay agile, maintain scale, and respond to new risks and fresh opportunities.

 

• Grantseeking support fees to offset costs and time spent applying for funds, monitoring impact and grant reporting.

 

• Due diligence shifts from grantseeker to grantmaker – funders should spend more time  conducting field visits, interviewing organizations in person (at their locations) when possible, and consulting similar organizations in the area to learn about the local context in lieu of expecting nonprofits to write lengthy reports on their strategy and qualifications without the ability to quantify their intangible impact. 

 

• Specialized advisors or “navigators” who help nonprofits understand and maneuver through the application process, which can facilitate equitable distribution of funding.

 

For you specifically, Ms. Scott, we ask you to commit to the following:

• Implementing the models outlined above for your next iteration of philanthropic giving. 

 

• A $5 billion Yield Giving Open Call that adopts this new radical approach that shifts power to nonprofits with annual operating budgets from $0 to $500,000 regardless of how long they’ve been operating.

 

We are not looking for incremental change anymore. We are calling for a revolutionized approach to philanthropic giving, inviting all funders to challenge their standardized way of doing business, and create a more equitable and just world through trust, confidence and collaboration.

Sincerely,

The undersigned nonprofit workers, board members, foundations, volunteers, nonprofit consultants and advisors.