Philanthropy This Week

Good morning.

As progressive nonprofits energize their staffs to fight assaults on causes like immigration and the environment amid likely reduced government spending during the next administration, they’re also considering how they might have contributed to the Democratic losses in the recent election, reports Ben Gose in the cover story in our December issue.

“There’s a deep-seated suspicion of elite institutions that seem out of touch with the concerns of a broad-based public,” Benjamin Soskis of the Center on Nonprofits and Philanthropy at the Urban Institute, told Ben. “The election itself is a call for nonprofits and philanthropy to reinterrogate how they fit into that critique.”

Nonprofits may not have the same fighting spirit they had at the start of the first Trump administration, but they’re better prepared than before. Many immigrant rights groups, for example, have spent the past year planning their strategies.

Odds are that the GOP-controlled Congress will introduce new legislation targeting big philanthropy, universities, and hospitals. It may also go after parts of the Affordable Care Act. But conservative ambitions may be tempered by the realities of the first administration, when attacks on the Affordable Care Act helped push Democrats to victory over Trump in 2020.

“The Republicans are not going to want to do big things which are unpopular and which will hand Democrats a hammer to hit them over the head,” Drew Altman, president of KFF, a charity focused on health policy, told Ben.

To get through the next four years, nonprofits will need the same “organized flexibility” that helped them weather the pandemic, said Sara Gibson, of the consulting firm 20 Degrees.

“I’m not optimistic that things will stay the same,” she told Ben. “But I am optimistic that we will come out as a stronger sector after this.”

In another article, Ben says Congress may finally expand the charitable deduction for anybody donating to a nonprofit. Currently, only one in 10 taxpayers has enough itemized deductions to exceed the standard deduction.

That’s one bright spot in what otherwise could be a dismal 2025 for nonprofits, Ben reports. To gain enough revenue to make up for extending tax cuts, Congress may try to revoke the tax-exempt status from charities that do work similar to businesses; place higher taxes on endowment and foundation income; and propose regulations on donor-advised funds.

Here’s what else you need to know:

Boston Globe/Getty Images

As universities back away from longstanding diversity, equity, and inclusion policies, nonprofits are feeling pressure to change DEI-based efforts, while grant makers that support DEI programs are bracing for litigation, reports Alex Daniels.

About 100 lawsuits have been filed in the past three years by conservative legal nonprofits, and decision makers in the Trump administration have already demonstrated their opposition to DEI. The goal of race-based grant making has been to right historical wrongs, but the Trump administration is trying to make it seem un-American, Fred Blackwell, CEO of the San Francisco Foundation, told Alex.

Some grant makers and others are trying to counter that narrative. Among them: a multimedia collection celebrating DEI released by the Bridgespan Group, and a Kresge Foundation fellowship program to support leaders committed to “diversity, equity, inclusion, and justice.”

Illustration by Chronicle of Philanthropy; iStock

By 2028, half of the money given to charity will go to donor-advised funds and foundations. That’s according to a new report by the Institute for Policy Studies, which also contends that this surge changes the motive for giving from charity to self-interest and greed, reports Drew Lindsay.

Assets in DAFs and foundations will exceed $2 trillion by 2026, the report estimates. That’s an enormous amount of money to warehouse, with benefits going to those who process fees and make commissions for managing assets, among others.

Says the report: “Philanthropy has become captured by the wealth preservation industry.”

Noam Galai, Getty Images

Nonprofits may have lost a million jobs because of the pandemic, a new report suggests.

Early in the crisis, many nonprofits had to suspend services and lay off employees, resulting in a loss of about 4.5 percent of the nonprofit work force, Sara Herschander reports. The sector fared better than for-profits, due in part to emergency government grants and a jump in charitable donations in response to the pandemic. But nonprofits have been slower than for-profits to bounce back.

The Chronicle of Philanthropy is accepting applications for its Philanthropy & Nonprofit Accountability Fellowship. Every year four newsrooms join the program, which is designed to enhance coverage of local giving and nonprofits. Fellows receive training sessions with experts in philanthropy, investigative reporting, and public records throughout the year. Each news organization receives $30,000 to spend on its reporting projects. Learn more about the fellowship and how to apply.

— Marilyn Dickey, Senior Editor, Copy

Elon Musk’s charitable foundation fell short of its required minimum distribution in 2023 by $421 million. It was the third consecutive year that the $9 billion Musk Foundation did not give away at least 5 percent of its assets, as required by the Internal Revenue Service. The philanthropy, which has no paid employees overseeing its giving, faces a 30 percent tax penalty on the shortfall. Musk, who continues to plow considerable sums into the foundation, did not respond to requests for comment. (New York Times)

Perennial Republican efforts to defund public media could get more traction under the second Trump administration than they have in the past. This time, the attacks will dovetail with the effort led by Elon Musk and Vivek Ramaswamy to cut federal spending, and they will come as NPR’s listeners increasingly decamp to its digital competitors. (Semafor)

While climate activists prepare to fight the policy reversals that are likely to come out of the second Trump administration, they are also turning their attention to local activism. On the national level, they are crafting messages that are more upbeat, or more closely linked to people’s pocketbooks. Closer to home, their plans run the gamut from pushing for strong state legislation to monitoring local utility commissions. (New York Times)

Charities funded by oil billionaire Charles Koch have channeled nearly $18 million to two nonprofit law firms that led a successful fight this year to gut federal agencies’ ability to interpret regulations. The New Civil Liberties Alliance and Cause of Action found plaintiffs and shepherded lawsuits all the way to the Supreme Court, which overturned a 40-year-old precedent requiring judges to defer to agency expertise. Now an alliance of Koch-funded groups is targeting a list of regulations to challenge, according to a recording of a conference call reviewed by the Washington Post. (Washington Post)

Melinda French Gates is putting $150 million into efforts to help advance women in the workplace. One-third of that money will focus on opening up the tech and A.I. industries, which are still overwhelmingly male-dominated. This outlay, one tranche of the $1 billion that French Gates has pledged to women’s and family issues through 2026, comes as organizations are under pressure from conservatives to kill their diversity, equity, and inclusion programs. (Axios)

Philanthropists and media leaders are beefing up local newsrooms with new projects and grants. The Knight Foundation is giving $20 million to Report for America, which will put 500 new journalists in primarily rural or underserved communities and will bolster its own efforts to help local news organizations build resilient business models. In Tulsa, a broad coalition is launching a $14 million project to open a new newsroom and help three existing media organizations expand. Nationally, the MacArthur Foundation announced $20 million in grants to newsrooms around the country and to support the ongoing Press Forward project to revitalize local news. (KOSU and Boston Globe)

Americans have given about $62 million toward the restoration of Notre-Dame Cathedral, making them the second-largest group of donors to the project. Among them are Nick and Suzie Trivisonno, of Charlotte, N.C., who gave an undisclosed sum. Retirees from business and finance, they are regular visitors to France. For their largess, the Trivisonnos were feted at a dinner and invited to the cathedral’s reopening this past weekend. (New York Times)

The appeal of effective altruism — doing the most good with your charitable giving — is self-evident, but some causes do not lend themselves to easy measurement for how to optimize charitable gifts to make the most impact, and the movement tends to neglect smaller organizations that help weave our communities together, writes New York Times reporter Emma Goldberg. What’s more, its “earning to give” approach helps justify the accumulation of enormous wealth in the face of stark inequality, as long as the rich write big checks to charity. (New York Times)

A telemarketer who for decades kept the lion’s share of the millions he raised ostensibly for charity has been sentenced to 10 years in prison. Richard Zeitlin raised more than $145 million, mostly from small donors, and kept at least 80 percent of it. His operations, which purported to benefit veterans, children with cancer, breast cancer victims, and others, were misleading but legal — until he told a provable lie in one appeal that allowed prosecutors to charge him with fraud. “It’s actually so easy to conduct highly exploitative and harmful activities as a charity fund-raiser, without breaking the law at all,” Laurie Styron, executive director Charity Watch, told the New York Times. (New York Times)

Nonprofits in Oregon are gutting their operations and struggling to survive as pandemic aid dries up, donations decline, government grants are delayed, and inflation increases their costs. Many have laid off staff and moved out of buildings they could no longer afford, while others struggle to hire critical employees because they cannot compete with the private sector on wages or working conditions. (Oregon Public Broadcasting)

Your Chronicle subscription includes free access to GrantStation’s database of grant opportunities.

Performing Arts: The National Dance Project (NDP), a program of the New England Foundation for the Arts, supports the creation and U.S. touring of new dance projects. NDP Production Grants are awarded to 20 new dance projects annually, including $45,000 for the creation of a new dance project, $10,000 in general operating support for the artist or company, $10,000 for production residency and community engagement plans, and $35,000 to support a U.S. tour of the work. Preliminary applications due February 28, 2025.

Youth: Sky Ranch Foundation is committed to giving at-risk youth a second chance by supporting efficient and effective programs in the United States. Preference is given to organizations that serve troubled youth between the ages of 11 and 18, with a priority for programs that focus on youth between the ages of 11 and 15; focus on preventing youth involvement in the criminal justice system, or provide long-term rehabilitation in a residential or alternative setting; and provide comprehensive support services to youth that may include education, job training, enrichment activities, counseling, and case management. General operating, capital, and capacity-building support are provided. Grants range from $5,000 to $40,000; letters of inquiry due January 31, 2025.