A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox. Wealthy philanthropists are grappling with a new landscape for giving, as government cuts create more funding needs but political battles make donations more fraught, according to several advisors. Whether it’s the legal battle at Harvard University, the cuts to foreign aid or sudden loss of research funding, major donors are facing shifting dynamics and are either holding back or staying under the radar as they seek to avoid getting caught in political crosshairs, donors and advisors said. Harvard last week received almost 4,000 gifts online totaling more than $1.1 million in the wake of its battle with the Trump administration, according to reporting from The Harvard Crimson. The gifts came after the White House froze more than $2 billion in federal funding when Harvard rebuffed its demands, which included an audit of the school’s student body for “viewpoint diversity.” Along with cuts to the U.S. Agency for International Development and other federal funding sources for nonprofits, reports suggest the Trump administration is also considering broader scrutiny of the nonprofit sector, potentially targeting organizations with causes or positions that contradict the administration or are viewed as overly partisan. In response, nonprofits have launched their most aggressive fundraising efforts since the Covid pandemic, arguing that the very future of the nonprofit sector and free speech is under attack. So far, however, major donors haven’t responded with large public gifts the way they did in 2020 and 2021. Harvard President Alan Garber and other leaders have been reaching out to the school’s roster of mega-donors — including Michael Bloomberg, Ken Griffin and others — but none have so far announced major gifts. Advisors to some large donors say their clients don’t agree with Harvard’s positions or the school’s progress on antisemitism and other issues. Other clients don’t want to be seen publicly opposing the administration. Philanthropy experts and advisors say some of today’s wealthy donors and foundations don’t want to be seen as taking sides for fear of public criticism. Some are giving — but doing so quietly and privately. Other donors agree with Trump administration criticisms that many nonprofits or institutions have become too ideologically one-sided and political and should be seeking to reform or compromise. The recent trend of nonprofits relying on larger gifts from a smaller pool of ultra-wealthy donors has made the problem worse, since they can no longer rely on large numbers of small donations from grassroots fundraising. A report from Altrata found that ultra-high-net-worth individuals — those worth $30 million or more — now account for 38% of all charitable giving worldwide. The world’s 3,200 billionaires account for 8% of all individual philanthropy. For most of today’s big donors, the nonprofit turmoil erupted so quickly that they’re still processing and assessing the best response. Nicholas Tedesco, CEO of the National Center for Family Philanthropy, said members are asking how to navigate the political climate and how to best protect their grantees. “The questions they’re asking first and foremost are, what is the risk to philanthropic individuals and families to move resources, and how can we protect our grantee partners, and how do we, the philanthropic individuals and families, navigate an environment of risk that allows us to have fidelity to our mission and be responsive to the needs of our constituents?” Tedesco said. BJ Goergen Maloney, head of private advisory at J.P. Morgan Private Bank, said clients have gotten the message that nonprofits feel in crisis. “Donors are feeling funding urgency, similar to the early Covid-19 crisis for nonprofits, especially those reliant on federal funding,” she said. She added that many nonprofits are merging or closing for economies of scale, especially overseas. Ed Chaney, a lawyer who advises tax-exempt organizations, said some of his private foundation clients have even stopped giving to causes singled out by the Trump organization. “I’m seeing some folks kind of sanitize things a bit. I see some folks who are ready to brawl,” he said. “It ultimately comes down to the individual circumstances of the philanthropic entity.” Chaney noted that wealthy donors tend to move slower than small-dollar donors as they rarely make major donations for general operating support. “They have to negotiate a gift agreement and all that sort of stuff,” he said. “It’s possible that bigger donors responded but they started a conversation that’s not going to end for a while.” Some philanthropists are trying to show resolve, even if they haven’t committed to a specific dollar gift this year. In late March, the Trust-Based Philanthropy Project launched its “Meet the Moment” pledge. So far, 118 signatories representing $23.7 billion in assets have committed to support nonprofits in their time of need, namely through unrestricted and multiyear funding. Another public statement , which says charitable giving is a First Amendment right, has been signed by more than 500 foundations as of Thursday morning. The Kenneth Rainin Foundation has signed both pledges and said it will distribute an extra $4 million this year. Shelley Trott, the family foundation’s executive director, said many funders are stepping up their support but doing it quietly to avoid government scrutiny. “The work has unfortunately been politicized,” she said. “We are all trying to find our footing because this is unprecedented.” She added that the threat to Harvard’s tax exemption and broader attacks on academia have “galvanized” some philanthropists and emboldened them to speak out. “We must stand together to protect the freedom to direct private resources to the issues people care about,” Trott said, “regardless of politics or who is in power.” Jordana Barrack, executive director of Mighty Arrow Family Foundation, said many funders are moving slowly, as they aren’t sure how to prioritize their giving in the face of dire need. “We don’t have enough resources to save everyone and keep all these organizations open,” she said. “How do we decide what does get Band-Aids and what doesn’t? That’s the tough part that a lot of funders are overwhelmed by, and it’s slowing down their decision-making process.” Mighty Arrow, created by New Belgium Brewing co-founder Kim Jordan, has a mandate to spend down its assets by 2040. But family foundations designed to exist in perpetuity have to consider how increased spending during a depressed market will deplete their endowments. Priscilla Kersten, president of Square One Foundation, said her top priority isn’t the longevity of the foundation, which her parents started in 1957 with their manufacturing fortune. Square One recently launched a rapid response fund and hosted a six-hour conference for grantees so they could coordinate resources. “The market is just the market, and it will come back,” she said. “If we can’t meet the moment during our lifetimes, I honestly don’t know what we’ve established this foundation and grown it for.”
A student walks through the Harvard University campus in Cambridge, Massachusetts, Dec. 17, 2024.
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A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox.
Wealthy philanthropists are grappling with a new landscape for giving, as government cuts create more funding needs but political battles make donations more fraught, according to several advisors.