NEW YORK – In light of what it describes as a “crisis” caused by the Trump administration’s suspension of federal foreign aid and the now-paused halt on federal grants, the John D. and Catherine T. MacArthur Foundation has announced plans to increase its charitable contributions over the next two years. “This is a major crisis for our sector and it’s a time when those of us who can do more should do more,” expressed John Palfrey, president of the MacArthur Foundation.
The decision was outlined in a blog post where Palfrey emphasized, “The cliff of funding from federal programs has sent budgets underwater in field after field, and people and communities in the United States and abroad will suffer.” The foundation has resolved to increase its current mandatory giving rate from 5% to at least 6% of its endowment for the forthcoming two years. With assets reported at $8.7 billion in 2023, this move will lead to an additional $150 million in grants.
President Trump’s early decisions in office to suspend foreign aid and initiate a review of federal grants for alignment with his policies have created significant repercussions across various sectors. The U.S., a leading global humanitarian aid contributor, allocated $68 billion for such efforts in 2023. Additionally, nonprofits benefited from $267 billion in government grants in 2021, as per the Urban Institute’s analysis, whereas foundations contributed $103 billion in grants in 2023, according to GivingUSA.
Palfrey encourages other foundations to follow suit with increased giving, highlighting that philanthropy should operate differently, not merely fluctuating with the stock market’s trends. Aligning with this sentiment, the Freedom Together Foundation, previously known as the JPB Foundation, declared it would elevate its grantmaking to 10% of its endowment. Its president, Deepak Bhargava, drew parallels to the AIDS crisis, where activism prompted significant societal and governmental shifts, inferring similar potential for change now.
Known for its prestigious “genius” fellowship, awarding $800,000 grants for remarkable cross-disciplinary work, the Chicago-based MacArthur Foundation remains committed to initiatives across climate, criminal justice, journalism, and regional commitments to Chicago and Nigeria. Palfrey points to the innovative financial responses during the COVID-19 pandemic as a feasible approach now, referencing how foundations, including MacArthur, issued bonds against their endowments to increase financial support temporarily.
Elisha Smith Arrillaga, vice president of research at The Center for Effective Philanthropy, notes the nonprofit sector’s widespread uncertainty due to the executive orders. “Really what nonprofits do is that they stand in the gap for all Americans,” she remarked, hoping for robust support for nonprofits from communities and individuals amidst these challenges.
