NEW YORK — The John D. and Catherine T. MacArthur Foundation has declared its intention to boost financial support over the forthcoming two years in reaction to what it perceives as a “crisis” induced by the Trump administration’s halt on federal foreign aid and the brief suspension on federal grants.
“This situation is critical for our sector, and it’s a moment when those who can do more should step up,” asserted John Palfrey, president of the MacArthur Foundation, in a dialogue on Wednesday.
Palfrey shared this announcement through a blog post on the foundation’s website, noting, “The withdrawal of funding from federal avenues has driven budgets into dire situations in numerous fields, causing hardships domestically and internationally.”
He further added that the foundation plans to elevate giving from 5% of its endowment, which is the IRS requirement minimum, to at least 6% in the next couple of years. With reported assets of $8.7 billion in 2023, the foundation typically disburses around $400 million annually. Over the next two years, they aim to allocate an extra $150 million.
In the early days of his presidency, Donald Trump halted foreign aid and ordered the Office of Management and Budget to provisionally cease all federal grants and contracts for reassessment according to his policies. This has rippled through multiple sectors significantly.
The United States, as a premier financier in global humanitarian undertakings, spent $68 billion on foreign aid in 2023. Nonprofits received approximately $267 billion in government grants in 2021, as per an Urban Institute analysis of nonprofit tax documents. In contrast, foundations offered $103 billion in grants in 2023, according to GivingUSA research.
Palfrey has encouraged other foundations to partake in this amplified commitment. “Philanthropy should proceed differently than it historically has, where typically more money is disbursed when the stock market excels, and less when it falters,” he remarked.
The Freedom Together Foundation, previously identified as the JPB Foundation, revealed plans to double its grantmaking to 10% of its endowment in alignment with countering Trump administration policies.
Deepak Bhargava, president of the foundation, expressed in a letter that the current scenario echoes the AIDS crisis era when activists prodded the government for solutions and reshaped societal perspectives on LGBTQ+ individuals.
“The movement found a way forward against the odds, and it can happen again as it’s historically done in America,” Bhargava wrote. “Despite a daunting wave of fear and disappointment in sparse leadership, history suggests a hopeful narrative: courage can proliferate.”
The Chicago-based MacArthur Foundation, notably known for its “genius” fellowship that honors extraordinary interdisciplinary work, provides recipients an $800,000 grant. The foundation is also involved in climate, criminal justice, and journalism endeavors, with ongoing commitments particularly in Chicago and Nigeria.
Palfrey highlighted that foundations previously managed to increase financial aid to grantees during the COVID-19 pandemic, suggesting similar strategies could apply now. The MacArthur Foundation, for instance, was among eight foundations that issued bonds, effectively taking loans against their endowments to enhance short-term payout capacity.
“I believe we must do something distinct in 2025,” Palfrey stated. “But the reasoning remains the same.”
Elisha Smith Arrillaga, vice president of research at The Center for Effective Philanthropy, commented on the uncertainty and anxiety that nonprofits endure due to recent executive orders from the presidency.
“Nonprofits effectively bridge the gap for all Americans,” she explained. “It’s crucial for organizations and individuals nationwide to rally around and support these entities, especially at times like this.”
