Questions like this are becoming increasingly common as billionaires publicly donate massive amounts of money to nonprofits across the country, many of which have historically relied on smaller donations to advance or maintain their work. Your donation may feel like a ‘drop in the bucket’ compared to influxes of millions of dollars that the super-wealthy are providing.
What Big Gifts Can Do
For many organizations, a big gift represents an entirely different bucket than their regular donations. Large donations can be used to create infrastructure - including moving into larger physical spaces, technological upgrades, facilitating new hires, and even expanding their programming - making an impact for years, even decades. It can also become an endowment to create fiscal stability amid uncertainty. Organizations, particularly those with robust strategic plans, are best positioned to know how a big gift can benefit their work.
Using our organization as an example, Charity Navigator received a sizeable gift from MacKenzie Scott and her husband, Dan Jewett, in 2021. This funding allowed for the significant expansion of our organization’s five-year plan to include ambitious and urgently needed projects, such as a new website, implementing the merger of our two rating systems, and hiring new talent to better serve our constituents. These projects are in addition to the core work we already planned to do, advancing our mission. Scott’s gift allowed us to complete these tasks on an accelerated timeline, but our traditional supporters have and continue to fund the core of our work that has served the public for 20 years.
The Limits of Big Gifts
If large gifts convince you to remove your support from specific organizations, this may reduce the gift's impact. Large donations, often done once, can help organizations be more ambitious, but only if that money is in addition to the funding that allows them to continue their business-as-usual work. Smaller donations are still essential to the work of nonprofits, even if each one may appear comparably insignificant.
While donating to organizations with smaller budgets and organizations that have not enjoyed significant infusions of cash from billionaires is a great option, don’t let their gifts scare you off. The early data shows that nonprofits receiving funding from Scott are using their money wisely to advance their missions and ensure their impact over the long term. By continuing to support organizations that have received large gifts with your smaller donations, you can be part of the solution to nonprofits’ funding woes.
Making Your Decision
It's best to support organizations addressing causes with the greatest need. That may mean supporting an organization that's receiving a lot of funding but still has tremendous need and opportunity for more impact. It also may mean supporting an organization with a great mission and model that is currently receiving little funding. Your values and judgment should guide your decision, but here are a few factors to consider:
Would it benefit you to use the vetting conducted by another donor or foundation that surprised an organization with their overwhelming generosity?
Does the organization receiving the significant influx of money still have room to grow its impact?
Does a smaller organization you are interested in supporting have a chance at longevity and impact?
Which organization(s) are doing the precise type of work at the scale you want to support? Your favorite small, local organization may never attract the attention of large-scale donors. This does not mean that you shouldn’t offer your support.
Ultimately, you can make a difference by giving to organizations with small or large budgets - or a mix of both. Size and existing financial information can influence your decision, but there are no objective right and wrong answers. The choice is yours.
Published December 2022