OVER THE past 18 months, the world has heard a lot about MacKenzie Scott, the billionaire philanthropist formerly married to Amazon’s Jeff Bezos. She has given generously to charities on the frontline of the pandemic, including food banks, schools and children’s health programmes. Relatively unknown, however, is the consultancy that has helped distribute almost $9bn on Ms Scott’s behalf: the Bridgespan Group.
A non-profit consultancy, Bridgespan was spun out of Bain & Company, a management consultancy, around 21 years ago by three people, including a former worldwide managing partner. What began as a handful of smart people toiling in a small office above the Hard Rock Cafe in Boston is now a 329-person global operation with $59m in operating revenues in 2020.
It has advised some of the world’s biggest donors, including the Bill & Melinda Gates Foundation, the Ford Foundation and Bloomberg Philanthropies. The list of non-profit groups it works with is no less impressive, including cutting-edge research centres such as the Johns Hopkins Bloomberg School of Public Health and big-name charities like the YMCA.
Bridgespan has two main lines of business. It advises wealthy donors, learning their interests and helping them create a donation strategy, then researching and doing due diligence on prospective organisations they might donate to. It also helps non-profit groups operate more efficiently. Beyond that, Bridgespan is shrouded in mystery. The only public information on the firm is contained in tax forms and the odd comment from former clients. In December, Ms Scott announced plans for a new website with a “searchable database” of her gifts and more detail on her decision-making process. But many wealthy people like their privacy and Bridgespanners know how to keep their mouths shut. And there is no way to know how it goes about evaluating worthy causes and potential grantees.
Bridgespan’s story is, in part, the story of philanthrocapitalism, a movement that began around the turn of the millennium, as billionaires started applying business principles to their giving. It is now the norm for philanthropists to treat donations like investments, setting up vast foundations, monitoring the projects they fund and quantifying the return on their money. An entire industry has emerged to support this “venture philanthropy”, including consultancies, such as Bridgespan, Rockefeller Philanthropy Advisors and Arabella Advisors, as well as researchers, donor networks and data providers, such as Candid and the National Centre for Family Philanthropy (NCFP).
Ms Scott has upended that model. She has held off setting up a foundation, instead outsourcing the entire process of picking grantees, contacting them and dishing out cash. “That signals something dramatically new, which is deploying billions of dollars through intermediaries,” says Nick Tedesco, head of the NCFP. Middlemen such as Bridgespan stand to benefit.
For Bridgespan, with great power and bumper contracts comes great responsibility. The first challenge for any organisation trying to decide who deserves a multimillion-dollar grant is to make sure it has a full picture of all the non-profit groups doing good work in poor communities. A diverse workforce that knows those communities helps.
Bridgespan trumpets its offices in India and South Africa, filled with local staff. It hires almost twice as many women as men and less than half its staff are white. Nidhi Sahni, who heads Bridgespan’s American advisory business, says the firm makes sure it doesn’t just settle on the “usual suspects”. She is adamant, for instance, that proficiency in English should not determine whether a potential grantee makes it onto the firm’s radar.
The next hurdle is dealing with potential conflicts of interest. Consultants that advise rich people on how to donate their money often also work with non-profit groups jostling for funding. William Schambra of the Hudson Institute, a think-tank, worries leaders of such organisations might feel compelled to hire Bridgespan for advice so they are front of mind when the consultancy recommends potential grantees. News that it is advising Ms Scott, who says she plans to give away her fortune of nearly $60bn “until the safe is empty”, only adds to that pressure. “If I had a non-profit I would be banging down their door,” Mr Schambra says.
Bridgespan’s response is simple: “Given the amazing organisations we work with, some of them household names, it would be surprising not to have some of them come to the attention of donors.” William Foster, the group’s managing partner, is clear that he can’t get a non-profit leader a lunch meeting with a big-name donor. In its conflict-of-interest policy, Bridgespan says that it “do[es] not make introductions to donor clients or share confidential information about donor priorities or strategies.” It also does not “design or run capital campaigns”. Nor does it promote non-profits to potential donors. Even so, one in every 20 non-profit groups that has received funding from a philanthropist it advises had also been a client in the five years prior to receiving funding, by its own estimates. The list of organisations Ms Scott has donated money to includes several Bridgespan clients.
There is, however, another tricky clash. Bridgespan, like many middlemen in the world of philanthropy, is itself a non-profit. In some ways, that is surprising. Though Bridgespan does not disclose its pricing model, researchers that cover the philanthropic sector say its rates can be hefty. The firm pays top executives six-figure salaries. And it competes for projects with for-profit firms such as McKinsey, the high priests of management consultancy.
Nonetheless, Bridgespan’s fees cover only about 75% of costs, and like many nonprofits, the group relies on donations to fund the full range of its work. And the results are sometimes uncomfortable. Alongside the groups working on education, health, gender equality and gay rights, on Ms Scott’s list of grantees are a number of intermediaries in the philanthropic sector—including Bridgespan itself.
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