Philanthropy Opens the Vault: Payouts Are Surging in Response to Trump

In the days following President Donald Trump’s inauguration, as he pulled federal grants from nonprofits and put the weight of the federal government behind efforts to quash racial equity programs, Ricshawn Roane knew as leader of the Weissberg Foundation that she had to take action.

Weissberg is a Virginia grant maker with about $210 million in assets that supports nonprofits led by and serving Black, Indigenous, and other people of color; it provides multiyear grants to more than three-quarters of its grantees. Roane told nonprofits they could receive their entire 2025 grant during the first quarter of the year to make up for lost federal support. She also opened an application process for two funds — one to allow nonprofit workers the ability to take time off from work to rest and heal, and the other to help build their operational capacity.

Roane’s news didn’t quite get the reception she expected.

“Our grantees told us, ‘This is great, but we don’t even have time to fill out the applications you’re sending us,’” she recalled. “Is there another way?”

There was another way. It is one that Roane and an increasing number of foundation leaders and boards are tapping into. While many foundation leaders did not act immediately during the first month of Trump’s presidency, several have since announced plans to dig into their endowments to surge funding to their grantees.

In Weissberg’s case, the foundation increased its payout from about 6 percent of its assets to 10.3 percent, which translates to $23 million in charitable distributions. That’s $10 million more than it had previously planned. Much of the early increase will go toward cybersecurity and physical security for grantees that fear being targeted for their work.

Weissberg Foundation

At 10 percent, Weissberg’s payout this year will be double the minimum required by federal regulations. Historically, foundations — particularly those designed to exist in perpetuity — have hewed closer to the federal minimum. Going any higher, some say, risks eroding a foundation’s endowment, making it harder to keep up with inflation and still provide grants large enough to generate much oomph.

But to Roane, the organizations serving immigrants, people of color, and LGBTQ people in Virginia were much more exposed to the threats coming from the White House than the dollars that sit in Weissberg’s investment accounts.

“We are actively recalibrating our risk,” she said. “We’re not just going to think about risk to the foundation, we’re thinking about risk to communities we’re centering.”

Weissberg’s payout decision came after an intense two-day board meeting. Family board members of Marvin Weissberg, a real estate developer who died in 2021, and the foundation’s five independent board members, including four who were first-timers at such a session, grappled with the decision to release more grant money.

Across the country, other foundations are having similar discussions. In the months Trump has been in office, launching a volley of attacks against many of the priorities of progressive foundations and the nonprofits they support, several private foundations have culled more grant money from their endowments.

The Freedom Together Foundation increased its payout to 10 percent this year, and the TransitCenter Foundation announced it would spend down its $71 million in assets by 2037 — decisions that were in the works before January 20. In response to Trump administration actions, the MacArthur Foundation pushed its payout from 5 percent to 6.5 percent, and the McGregor Fund and Maguerite Casey and Northwest Area foundations each decided to increase their grant-making budgets.

Some of the payout announcements have come in the past few weeks. They were influenced by the Meet the Moment Pledge, an effort organized by the Trust-Based Philanthropy Project, a network of grant makers that want to make it easier for nonprofits to access philanthropic funds, along with two membership organizations: Grant Makers for Effective Organizations and the National Center for Family Philanthropy.

Nearly 140 grant makers have signed the pledge, although it is not certain all of them will increase their grant making. Shaady Salehi, co-executive director of the Trust-Based Philanthropy Project, wrote in an email that the goal is to encourage collective action rather than a “perfect embrace” of the entire pledge, which included calls for streamlined grant-making applications, multi-year grants, and other items.

Soul-searching about whether to cut into an endowment designed for longevity to address the current political landscape was not limited to the Weissberg boardroom, Salehi suggested.

“We are hearing from a wide range of foundations that the Meet the Moment commitment is sparking much-needed internal discussions about their purpose — especially as more and more nonprofits face threats and uncertainty,” she wrote.

‘Human-Made’ Disasters

Grantees were not present at the Weissberg meeting, Roane said, because she didn’t want to burden them with an additional task and unneeded pressure. But she and her staff made sure to compile their stories to present to the board about the existential threat many face with uncertain federal support and a shift in government policies that target DEI work.

Roane presented to her board more reading material than usual, including a blog post from Phil Buchanan, the president of the Center for Effective Philanthropy, that urged funders to think about the risk their grantees face rather than the prospect of a smaller endowment.

The material, much of it provided well in advance of the meeting, helped, said Courtney Morris a family trustee who chairs the Weissberg board.

“We didn’t walk into the room and feel blindsided by it,” she said. “There was a lot of preparation.”

Something Morris found particularly useful was a presentation by Garrett “Boo” Martin, another family trustee. He charted how the foundation’s endowment would grow or shrink and what percentage of its assets would be used for payout under various grant-making and market performance scenarios.

Absorbing the numbers — seeing clearly how a period of severe market declines would reduce its endowment from $210 million to $40 million if it maintained its grant-making budget — was difficult to digest, said Morris.

Many independent trustees who were at their first board meeting shared first-hand knowledge of how Virginia nonprofits were struggling, said Edward Jones, vice chair of the Weissberg board.

“As a society, we have been very quick to respond to natural disasters,” Jones said. “We’re not so quick and strategic around responding to human-made disasters. Policies that don’t serve us well — that’s an example of a human-made disaster.”

The call to action from grantees and the board’s independent members was joined by an urgent need, shared among family members, to fulfill founder Marvin Weissberg’s vision to promote human rights and improve the lives of others.

“I felt really confident that he would ask us to be bold and act with heart,” Morris said.

Considering Options

Gary Steuer, president of the Bonfils-Stanton Foundation, isn’t increasing the Colorado arts funder’s payout rate in response to early actions of the Trump presidency. But Steuer said the board of the $84 million foundation is considering its options.

One reason it hasn’t jacked up payout is that it is already higher than required. Since the onset of the pandemic, Bonfils-Stanton has been distributing 7 percent to 8 percent of its assets to arts and culture groups in Colorado.

After several years of a relatively high payout, the plan had been to rethink payout, with one option being to gradually reduce it to try to ensure the foundation’s perpetuity, Steuer said.

“There’s a lot of discussion about foundations needing to step up in response to these times and the actions of the current administration,” Steuer said. “But one of the nuances is there are a lot of foundations out there that have already stepped up.”

The foundation’s payout calculus is made more difficult, Steuer said, because Bonfils-Stanton is the state’s major arts funder. If it spent itself out of existence, Steuer worries that other donors wouldn’t step in to fill the void.

The foundation has, however, responded to the current situation by making $400,000 available to groups in need, such as those organizing Juneteenth, arts, and Pride festivals that have experienced a pullback of corporate and individual support. Emergency grants will also be open to Colorado nonprofits that have lost federal funding from the Institute for Museum and Library Sciences, which the Trump administration is attempting to dismantle.

As the foundation considers its next moves and how to deploy its endowment, which has experienced several years of positive returns, the investment outlook has grown cloudy. If the nation enters a prolonged bear market, the decision on payout will be further complicated, Steuer suggested.

“The downturns in the market haven’t helped,” he said.

Payout Catch-22

Hands off the endowment. That was the prevailing ethos in 2020 when Carmen Rojas started her job as president of the Marguerite Casey Foundation, a Seattle grant maker that supports community organizing and media nonprofits. The only way for Casey to meet its charitable purpose, the board and staff agreed, was to increase the wealth socked away in Casey’s investment portfolios.

But that ethos has shifted. In late April, Casey announced it would make $130 million in grants in 2025 — nearly triple the amount from previous years.

Casey is especially sensitive to market swings, Rojas said. The majority of the foundation’s grants are five-year commitments that make up at least 25 percent of each grantee’s budget. So if the market drops drastically, Casey’s ability to fulfill its grantee commitments is put at risk and many grantees would be in jeopardy of a severe decline in revenue.

Increased payouts and a shoddy market could spell doom for the nonprofits Casey supports. But in Rojas’s view, if the foundation failed to act, many of the grantees that depend on it — the ones that carry out the mission Casey was created for — would cease to exist.

And if a weakened endowment led to the Casey’s dissolution, even though it was created to make grants in perpetuity?

Said Rojas: “I don’t know that anything is written in stone.”

The massive increase in payouts reflects a new definition of fiduciary duty for charitable foundations, said Ian Fuller, Casey’s board chair. Often philanthropy boards see their fiduciary duty as ensuring financial gain for their institution, making decisions that increase the long-term wealth of their organization, much like a corporate board.

“Unfortunately, some of our colleagues across the ecosystem have possibly outdated modes of thinking around what fiduciary duty means and keep it within a very narrow context,” Fuller said.

The Casey board’s fiduciary duty is “delivering for our mission, very specifically in this context, for our grantee partners.”

The Moral Case

Many of McGregor Fund’s grantees provide basic needs to some of Detroit’s most vulnerable people. That’s why Kate Levin Markel, the grant maker’s president, was alarmed when some of those nonprofits’ connections to the federal government, in many cases their biggest funder, vaporized.

In February, the federal Office on Violence Against Women took down application information for new grants from its website. The following month, the Detroit field office for the department of Housing and Urban Development stopped returning calls.

The federal pullback had already begun when Levin Markel met with her board for an already planned early February retreat. Although the foundation, which manages about $210 million in assets, has been in existence for a century, the board was in the process of trying to reinvent its mission.

The conversation revolved around some basic questions, Levin Markel recalled. Like, “Why are we here?” “What is our purpose?” And “what are our guiding values?”

The foundation is still developing a fully fleshed-out strategy, but in the meantime, the foundation’s trustees decided to increase its payout rate from 6 percent to 10 percent for two years.

Levin Markel worked with the fund’s financial advisers to draw up projections for how the endowment would fare in different spending and market return scenarios. But that wasn’t her focus.

“In teeing up the conversation, I did not center those questions,” she said. “Instead I wanted to focus on the moral case” for increasing spending.

Levin Markel told the board that the financial analysis was available if they wanted to delve into it. But most of their curiosity, she said, was trained on how the increased grant making could help Detroit nonprofits.

“We have a crisis of multiple dimensions,” she said. “If your job is to give out money and share your wealth with the community, then you’ve got to step up and do your job.”