During the past two months, as the White House pummeled left-leaning nonprofits through a series of executive orders and federal funding freezes, some nonprofit executives have wondered why foundations are not responding with aggressive support and action.
Amber Hamilton, CEO of the Memphis Music Initiative, a $5 million arts education and advocacy nonprofit, said foundations are acting too much like a “wealth protection industry” — and she keeps hearing the same refrain when she contacts them.
“We’re not sure yet,” Hamilton reported. “We’re still figuring things out. ... We’re going into a strategic-planning process.”
Hamilton’s nonprofit receives funding from nearly 20 grant makers, including the Kresge and Hyde Family foundations and corporate funders like the National Basketball Association and Hershey Company. It supports groups whose federal support vanished after the National Endowment for the Arts scrapped grants related to diversity, equity, and inclusion efforts and announced funding opportunities for art commemorating the 250th anniversary of the Declaration of Independence.
Like many nonprofit leaders, Hamilton, who serves on the board of Grantmakers in the Arts, has been waiting for a substantive response and more cash from foundations. Although most foundations, especially those designed to last in perpetuity, have not culled more from their endowments, some nonprofit experts predict they are on the verge of letting loose significant support. But at this point, said Hamilton, fear of being targeted by the Trump administration has stymied and silenced many foundations.
“My disappointment lies in the fact that so much of philanthropy has been obedient in advance” by declining to take action when White House orders on things like DEI await final resolution in the courts, she said.
Not all foundations are holding back. The MacArthur Foundation in February said it would increase its annual grant making budget from 5 percent of its $8.67 billion in assets — the amount it is legally required to make — to 6 percent. The move will direct $150 million in additional grant-making dollars over the next two years. Meanwhile, the Freedom Together Foundation, which has about $4 billion in assets and advocates for multiracial democracy, announced it would increase its payout to 10 percent. As a result, the grant maker, formerly known as the JPB Foundation, will put $45 million more toward charitable work this year than its average annual spending over the previous five years.
In the weeks since MacArthur and Freedom Together announced their payout increases, nonprofit leaders waited for more to follow. Some, including Glen Galaich, CEO of the Stupski Foundation, which plans to spend down its assets by 2029, expressed frustration that foundations were not giving more. Grant makers that increase payout by a percentage point, like MacArthur, “look like you are doing something while you are really just protecting your endowment,” he suggested on his Substack.
To Spend or to Save
Foundation endowments are coming off a good run on Wall Street. According to FoundationMark, which tracks foundation investments, typical grant maker portfolios gained 13.4 percent in 2024 and about 6.9 percent annually over the past 10 years. Without accounting for inflation, that return is above the federally mandated 5 percent payout foundations must make.
At the outset of the pandemic, and following the murder of George Floyd in 2020, foundations were generally applauded for taking quick action. But perhaps the speed with which philanthropy responded — more than 800 pledged to make their grant applications and reporting processes simpler, and many increased grants — seemed fast because foundations “aren’t the most nimble of institutions,” said Aaron Dorfman, CEO of the National Committee for Responsive Philanthropy.
Dorfman is confident, based on conversations he’s having with foundation leaders, that a response from philanthropy to federal funding cuts is coming in the months ahead.
“There will absolutely be dozens and dozens of more announcements of increased spending,” he said.
For now, Sherece West-Scantlebury, CEO of the Winthrop Rockefeller Foundation in Arkansas, is holding tight. Foundations, she said, shouldn’t feel beholden to rules on existing into perpetuity and should adapt, even if it means changing their bylaws. But, she said, eroding a foundation’s endowment isn’t always the best call.
Shortly after Trump’s inauguration and the chaos triggered by his executive orders, West-Scantlebury sent out a survey to 45 or so grantees to assess how they were faring. In response, the organization gave a total of $250,000 to seven grantees that support immigrants — not a hefty sum for some mega-foundations, but a sizable amount for Winthrop Rockefeller, which makes less than $10 million in grants each year and has about $151 million in assets.
The messages she received from grantees, which she shared at a board meeting in early March, was that they could survive for the quarter. But how their finances would look at the end of the year was anyone’s guess. At the next board meeting in June, West-Scantlebury said, she will reassess.
Risking Winthrop Rockefeller’s sustainability by spending more could leave a void in Arkansas, where there aren’t many foundations.
“In a state like Arkansas, where there isn’t a robust philanthropic community, I don’t know if that’s a great decision,” she said. “If it’s not us, then who?”
At the much larger Freedom Together Foundation, the decision to increase its grant budget came before the November presidential election. No matter who emerged the victor, Deepak Bhargava, the grant-maker’s president, believed the notion of a functioning multiracial democracy was slipping away.
Bhargava said he has had “high level” conversations with many other foundation leaders and is convinced that progressive philanthropy will become more active. No matter what issue a grant maker is focused on, he believes they need to pay a “democracy tax” in the form of a higher payout.
“It’s hard to imagine making progress on any substantive issue, whether it’s poverty, health care, the environment, housing, or racial justice, without the fundamental pillars of democracy in place,” he said.
Since the beginning of the year, the foundation has started a new line of grant making to groups that protect LGBTQ rights. Bhargava said a budget for this effort is not set in stone.
There was “no magic” in deciding to double Freedom Together’s payout to 10 percent, he said.
“We wanted it to speak to the seriousness with which we take this time period and the threats we face,” he said.
The Freedom Together Foundations is a financial supporters of the Chronicle of Philanthropy.
