A donor pulling a longtime grant in response to a nonprofit executive’s politically-charged social media post. A family foundation forced to bring in an outside facilitator to mediate internal divisions over the war in Gaza. Risk-averse grant makers asking organizations to scrub language like “ceasefire” from their websites.
Those are just some of the conflicts brewing over language, funding, and free speech that have engulfed the progressive nonprofit world in recent months, as a growing number of foundations threaten to pull support from grantees over their stance on the war in Gaza. Caught in the middle are a host of small social-justice nonprofits that have been forced to consider cutting staff and programming amid six-figure funding deficits, advocates say.
The backlash comes amidst signs of philanthropic hesitance around racial equity commitments and a recent legal ruling against the Atlanta-based Fearless Fund that experts worry could cause some funders to backslide further, fueled by notions that some racial-justice work could soon be deemed discriminatory or illegal.
For the progressive groups most affected, many of them small and BIPOC-led, the funding cuts and censorship demands have started to hit hard — forcing painful conversations about whether to tone down messaging to preserve needed revenue and avoid layoffs and program cuts.
After multiple complaints from progressive grantees with similar experiences, a group of Jewish philanthropy professionals and major donors composed an open letter last month deriding what they called a “dramatic ramping up of efforts in philanthropy to marginalize, discredit, and censor voices — including Jewish voices — that dissent from certain orthodoxies.” The letter goes on to challenge “claims that any criticism of the state of Israel’s policies” constitute antisemitism, an accusation that some funders have levied against some pro-Palestinian rhetoric.
Andrea Lynch, a philanthropy consultant who helped organize the letter, said the 180-plus signatures it garnered revealed the depth of concern among Jewish funders about the trend, many of whom fear the impact of cuts on the ability of progressive groups to do important work during an election year. Nonprofits known to the letter’s signatories say they’ve collectively lost $5 million to $10 million over the past several months related to their stance on the ongoing hostilities, and Lynch says the actual number is likely much higher.
“These are major cuts, and they’re cutting groups that are on the front lines of fighting fascism and building democracy at a really critical time,” she said. “It’s starting to feel like a decade’s worth of progress and infrastructure that’s being lost.”
Threats to Funding
In the weeks after October 7, Rising Majority, a coalition of progressive nonprofits founded by the Movement for Black Lives, drafted a letter calling for a ceasefire in Gaza that many of the group’s member organizations signed onto.
At the time, reasoned national director Loan Tran, the group figured there would be strength in numbers, and with over 100 signatories, nonprofits would be less at risk from donor backlash.
Still, “a lot of organizations were hesitant to do it because of the threat of losing funding,” Tran said, and several organizations that did sign on were called into meetings with their funding partners and asked to justify their stance.
“It’s completely inappropriate for funders to be pulling money,” Tran said. “The organizations that are calling for a ceasefire greatly overlap with the organizations that are organizing every single day to defend our democracy, however imperfect, that are organizing every single day to stave off authoritarianism.”
Yet Tran also sees the donor backlash as an opportunity, a “paradigm-shifting moment” for philanthropy to re-examine its analysis of power, capital, and the status quo when it comes to relationships between funders and grantees.
“In our fight against authoritarianism, in our fight for a functional democracy, we have to find ways to stay together, and I include funding partners in that,” Tran said.
Even if a grant maker disagrees with a grantee over their exact stance on the war in Gaza, that doesn’t need to prompt a complete rupture in their relationship, said Timi Gerson, vice president and chief strategy officer at the National Committee for Responsive Philanthropy.
“Don’t cut off people who are otherwise aligned,” she often tells funders considering slashing funding to, say, a local reproductive rights or civil liberties nonprofit for their comments on the war. Instead, she encourages grant makers to engage in open-minded dialogue with their grantees when disagreements arise.
The 11th Circuit’s decision to block the Fearless Fund’s grant-making program for Black women-owned businesses, the Supreme Court’s affirmative-action ruling, and other legislative attacks — including bills that would give the Treasury broad powers to revoke nonprofits’ tax-exempt status — have sparked fear among foundations, Gerson said.
Revoking the funding from a nonprofit that’s vocal about racial equity or the war in Gaza won’t make those legal risks go away, she says, and can inflame the right-wing institutions lobbying for those measures in the first place while defunding a key pillar of defense.
“Funders face less risk,” she said, “but eventually they’re coming for all of us.”
Scrubbing Statements
In some cases, funders have explicitly asked grantees and nonprofit leaders to take down their pro-Palestinian posts or remove their names from letters or statements criticizing Israel’s conduct in Gaza. In response to the Supreme Court’s affirmative-action decision and the Fearless Fund ruling, some grant makers have also requested that grantees reconfigure programs so they do not specify the race of intended recipients.
In conversations with over 100 organizers and foundation staff, the Philanthropic Initiative for Racial Equity found that grant makers were increasingly fearful of the legal risks of funding racial equity and had begun putting more demands on the grantees they’ve continued to fund.
Often, those demands have centered around language, in some cases explicitly requesting that organizations scrub descriptions related to racial justice work, say, “building power in communities of color” or phrases related to the war in Gaza.
A staff member at one philanthropic intermediary, who spoke on the condition of anonymity to avoid further backlash, described fear of retribution from funders against grantees who speak out about the war in Gaza.
The intermediary, which works to direct philanthropic dollars towards BIPOC-led groups, has seen a roughly $8 million reduction in grants to social justice organizations disbursed through its portfolio over the past eight months, which the staff member tied not only to backlash related to the war in Gaza, but also to a broader reduction in commitments to racial equity.
“I know trans-led organizations where people will not be able to pay their rent, and the leadership is becoming housing insecure because they’re losing funding,” she said. “Every day, there is a calculus of ‘Do I stand in my principles, or do I protect my staff’s paychecks?’ Those are the stakes.”
Still, large numbers of BIPOC-led organizations, many of whom began receiving funding in 2020, continue to hold the line despite the risk, she emphasized.
“Organizations that already are led by communities that are under-invested in are the ones being the most vocal and taking the most risks, and philanthropic institutions, even ones where there isn’t a particular position, are engaging in a level of risk averseness.”
A ‘Convenient Excuse’
For one social-justice group in California, deciding to take a stance on the Israel-Hamas War was easy because so many staff members expressed indignation at the rising Palestinian death toll. What came next was harder.
Within weeks of sharing a graphic on social media that included the controversial phrase “from the river to the sea,” one of the organization’s funders announced it might halt a longtime grant — one whose renewal the organization once regarded as easy and automatic — after some family members expressed concern over the posts.
After months in limbo, the group received notice that it would not receive the $30,000 donation. “They’re taking money away from organizations that are doing really important work for us to survive on this planet,” said the grantee’s exasperated leader, who requested anonymity for fear of further reprisals.
“In this time of genocide, it’s so important for us to stand up,” said the nonprofit leader, echoing a contested claim by pro-Palestinian advocates that Israel’s conduct in Gaza amounts to genocide. “We need to be vocal about it” despite donor push-back and organizational risks, she said, and “funders need to show support for organizations that are taking this risk on directly.”
In many cases, organizations like hers view the war in Gaza, the Fearless Fund decision, and attacks on affirmative action as a trifecta of “super convenient excuses.” They see funders as falling back on lofty commitments made to racial justice in 2020, leaving small organizations in the lurch amid a fraught election year.
“These organizations are the fabric of our communities, and when they cease to exist, we stop getting good policies,” she said. “We stop getting informed voters and we stop getting people who are driving people to the polls.”
In other words, any additional backlash from organizations’ positions on Gaza couldn’t be coming at a worse time.
Susan Taylor Batten, president and CEO of ABFE: A Philanthropic Partnership for Black Communities, described what she called a “racial justice funding cliff” that’s deepened in recent months, as BIPOC-led nonprofits see funding promises made in 2020 dry up. Many nonprofit leaders were always skeptical of philanthropic promises in 2020, she says, and the falloff hasn’t come as a surprise.
“Many of us thought then — and it’s clear now — that it was episodic and more about crisis intervention, and never really designed as long-term funding,” she said.
That doesn’t mean these organizations will disappear in the face of mounting attacks against the racial justice movement and democratic institutions more broadly, she says. After all, she says, many of these groups operated with little philanthropic support before 2020 and they will continue to do so in years to come.
“What we’re calling backlash isn’t new,” she said. “There has just been an ongoing pattern of disinvestment and redlining, which means that organizations that do great work, do so with shoestring budgets.”
