Bridgespan Group: the most powerful consultants you’ve never heard of

ORWATCH THE In the past 18 months, the world has heard a lot about MacKenzie Scott, the billionaire philanthropist who was married to Amazon’s Jeff Bezos. She has generously donated to charities on the front lines of the pandemic, including food banks, schools, and children’s health programs. Relatively unknown, however, is the consultancy that has helped distribute nearly $9 billion on Ms. Scott’s behalf: Bridgespan Group.

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A not-for-profit consultancy, Bridgespan was spun off from Bain & Company, a management consultancy, about 20 years ago by three people, including a former managing partner. What started as a handful of smart people working hard in a small office above the Hard Rock Cafe in Boston is now a 329-person global operation with $59 million in operating income in 2020.

He has advised some of the world’s largest donors, including the Bill and Melinda Gates Foundation, the Ford Foundation, and Bloomberg Philanthropies. The list of nonprofit groups she works with is no less impressive, including cutting-edge research centers like the Johns Hopkins Bloomberg School of Public Health and renowned charities like the YMCA.

Bridgespan has two main lines of business. He advises wealthy donors, learning their interests and helping them create a donation strategy, then researches and conducts due diligence on potential organizations they might donate to. It also helps nonprofit groups operate more efficiently. Beyond that, Bridgespan is shrouded in mystery. The only public information about 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 details about her decision-making process. But many rich people like their privacy and Bridgespanners know how to keep quiet.

Bridgespan’s story is, in part, the story of philanthrocapitalism, a movement that began around the turn of the millennium when billionaires began applying business principles to their giving. It is now the norm for philanthropists to treat donations as investments, establishing large foundations, monitoring the projects they fund, and quantifying the return on their money. An entire industry has sprung up 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 Center for Family Philanthropy (NCFP).

Ms. Scott has changed that model. She has put off creating a foundation and instead outsourced the entire process of selecting beneficiaries, contacting them and doling out cash. “That indicates something dramatically new, which is deploying billions of dollars through intermediaries,” says Nick Tedesco, head of the NCFP. For Bridgespan, with great power and exceptional contracts comes great responsibility.

The first challenge for any organization trying to decide who deserves a multi-million dollar grant is to make sure they have a complete picture of all the nonprofit groups doing good work in poor communities. Bridgespan announces its offices in India and South Africa, filled with local staff. It hires almost twice as many women as men and less than half of its staff is white. Nidhi Sahni, who heads Bridgespan’s US consulting business, says the firm makes sure not to settle for the “usual suspects”. She insists, for example, that proficiency in English should not determine whether a potential beneficiary makes it onto the company’s radar.

The next hurdle is dealing with potential conflicts of interest. Consultants who advise the wealthy on how to donate their money often also work with nonprofit groups struggling for funding. William Schambra of the Hudson Institute, a think tank, worries that leaders of such organizations will feel compelled to hire Bridgespan for advice, so that it comes to mind when the consultancy recommends potential recipients. The news that he is advising Ms. Scott, who says she plans to give away her nearly $60 billion fortune “until the safe is empty,” only adds to that pressure. “If you had a nonprofit, I would be knocking on your door,” says Schambra.

Bridgespan’s answer is simple: “Given the amazing organizations we work with, some of them well-known, it would be surprising if some of them didn’t catch the attention of donors.” William Foster, the group’s managing partner, is clear that he can’t get a leading nonprofit to have a lunch meeting with a big-name donor. In his conflict of interest policy, Bridgespan says that he “does not[es] do not make introductions to donor clients or share confidential information about donor priorities or strategies.” Nor does it promote non-profit organizations to potential donors. Still, one in 20 groups that has received funding from a philanthropist it advises had also been a client in the five years before receiving the funding, according to its own estimates. The list of organizations to which Ms. Scott has donated money includes several Bridgespan clients.

There is another complicated crash. Bridgespan, like many intermediaries in the world of philanthropy, is a nonprofit organization. In a way, that’s surprising. Although Bridgespan doesn’t disclose its pricing model, researchers covering the philanthropic sector say its fees can be steep. And it competes for projects with for-profit consultancies like McKinsey.

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. The consequences of this can be quite messy. In addition to groups working on education, health, gender equality and gay rights, Ms. Scott’s list of recipients includes a number of intermediaries in the philanthropic sector, including the Bridgespan Group itself.

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This article appeared in the US section of the print edition under the headline “The Charity Industrial Complex.”

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