Philanthropy This Week

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Good morning.

With President Trump’s “big beautiful bill” now in the hands of the Senate, lobbyists for foundations and nonprofits will be working to get certain provisions removed, reports Ben Gose, who delved into the impact the bill could have on foundations and charities and what the nonprofit world is doing to fight back.

The bill, passed by the House on Thursday, includes a sharp rise in taxes on big foundations and university endowments and a requirement that corporate giving exceed 1 percent of profits before businesses can deduct charitable gifts.

Surprisingly, nonprofit hospitals and credit unions, thought to be likely targets of the higher taxes, are absent from the bill. That’s because they invested in advocacy and building relationships with lawmakers, Steve Taylor, a long-time lobbyist, told Ben. “That is a huge indication of their relative political strength,” Taylor said.

As for the groups targeted, says Diane Yentel, president of the National Council of Nonprofits, “we’re looking ahead to the Senate — they’ve made clear they’ll make changes. We have opportunities there both to prevent some of the harm to nonprofits and to expand the bit of good.”

To fight the tax bill, the nonprofit sector should consider reform, not scare tactics, writes Craig Kennedy, a former foundation president, in an opinion piece. Wealthy foundations and nonprofits need a new strategy that includes acknowledging that the charitable sector is in serious need of change and then coming up with politically viable proposals to address those concerns.

Writes Kennedy: “Opposition to new taxes on the wealthiest foundations will come up against a public increasingly wary of tax-subsidized philanthropy.”

Read more of our coverage about nonprofits and the Trump agenda.

Other highlights from the week:

Monthly giving continues to be a smart way to hang on to donors and assure a steady source of income with lower fundraising costs, reports Lisa Schohl. Lisa spoke with experts who offered tips on how to maximize recurring gift programs — such as not limiting donors to a monthly option. Allow people to make recurring gifts quarterly or annually, or even more than once a month.

The American Civil Liberties Union promotes recurring gifts “everywhere,” the group’s Alicia Meulensteen told Lisa — mailings, online donation forms, even in thank-yous for online gifts. “It’s rare that something goes out that doesn’t have an option for someone to choose monthly,” she said, “even if it is ostensibly a one-time ask.”

A $24,000 innovation prize 20 years ago allowed a graduate student in social work to follow her dream and start a nonprofit to help women in low-income areas around the globe sell their crafts. Now a $6 million nonprofit, Nest Inc. supports crafters, mostly women, in 125 countries and 47 American states, reports Stephanie Beasley. And it does so without taking a cut of the artists’ proceeds.

Its success has stemmed, in part, from developing partnerships — such as one with Indego Africa, which has resulted in Tory Burch selling hand-woven straw tote bags made by Ghanaian women for nearly $500, and Etsy, which among other things has helped a group of 100 eastern Kentucky crafters reach new customers.

“That’s huge for Appalachia and awesome,” artist Stef Ratliff told Stephanie. “I would never have thought to sell my pottery through Etsy because I felt like a lot of people don’t really care about southern stories and Appalachian stories. I didn’t think they really cared about history.”

Bill Gates’s announcement that he plans to close the Gates Foundation in 20 years after spending $200 billion drew this response from one foundation board chair in an opinion column: Don’t shut it down.

Buzz Schmidt, chair of the Heron Foundation, applauds Gates for spending down the grant maker’s assets, but he says foundations provide more than money, and closing would mean the vast wealth of knowledge and expertise would also go away.

Writes Schmidt: “Gates has built a foundation with an enormous wellspring of nonfinancial assets that could easily attract significant new funding from others and address the problems that will exist throughout this difficult century.”

Readers chimed in with their opinions of the Gates announcement in letters to the editor, one saying other grant makers should follow the Gates example — including small foundations. Another praised the decision to spend $200 billion by 2045 as “historic and overdue” — but wondered if it would continue the “slow-dripping dollars distributed through incremental grant cycles” or would the foundation make bold investments in “strategies, people, and organizations that transform unfair systems and promote equity.”

— Marilyn Dickey, Senior Editor, Copy

Indiana’s Lilly Endowment has surpassed the Gates Foundation to become the country’s largest foundation, thanks to the soaring value of its major asset, stock in drugmaker Eli Lilly & Co. The company’s new drugs for diabetes and weight loss have doubled the value of its stock, pushing the endowment’s assets up 29 percent during 2024, to $79.9 billion, compared with the $77.2 billion Gates Foundation. As a result, the endowment “will have to give away nearly $3.6 billion in 2025, up from $2.3 billion in actual charitable disbursements last year.” Launched in 1937, the foundation is a separate entity from the drug company. (Bloomberg — subscription)

Names familiar and unfamiliar grace Time magazine’s first list of the 100 most influential people in philanthropy. From Silicon Valley’s Dustin Moskovitz, to Nigerian industrial magnate Aliko Dangote, to Indian tech billionaire and education philanthropist Azim Premji, the inaugural cohort come from around the world and take different approaches to giving. They are honored for the huge sums they have donated but also for innovations such as GivingTuesday and giving circles, and for bringing new people into philanthropy. (Time)

The imminent closure of two preschools funded by Mark Zuckerberg and Priscilla Chan is a reminder that education reform has repeatedly thwarted the best intentions of billionaire philanthropists. Their approaches have ranged from opening new schools (Zuckerberg and Chan, Jeff Bezos, Elon Musk) to working with existing systems (Bill and Melinda Gates, also Zuckerberg and Chan), but results have been mixed at best. One education consultant likened education philanthropy to a challenging venture capital investment. “I think in some cases what some folks might view as failures actually reflect a degree of situational awareness and self-awareness about, wow, this problem is a lot harder than we thought,” he said. (Fortune)

The Supreme Court had deadlocked on the question of whether the country’s first public religious charter school would violate the separation of church and state. The 4-4 tie leaves in place a ruling by the Oklahoma Supreme Court that establishment of the St. Isidore of Seville Catholic Virtual School, which sought “complete and direct taxpayer funding,” would violate state law and the Constitution. Still expected in the current court session is a decision in a case challenging Wisconsin’s system of granting tax-exempt status to faith-based nonprofits based upon whether their work is essentially religious or secular in nature. (Washington Post)

The Bezos Earth Fund has chosen 24 projects to boost under its $100 million challenge to incorporate artificial intelligence into climate and conservation work. The grantees will each receive an initial $50,000 and be matched with AI and tech experts for collaboration. They include teams working on sustainable proteins; bird, forest, and coral reef conservation; and faster weather forecasting in Africa “to help with climate and farming resilience.” After a first-phase “innovation sprint,” up to 15 of the projects will each be awarded $2 million later this year to implement their ideas over two years. (Axios)

Wealthy backers of private foundations, including traditional GOP allies, are hoping to scuttle the Republican effort to hike taxes on philanthropies’ investment income. Ostensibly rooted in hostility to large foundations that the right views as progressive, the measure would likewise hit grant makers bankrolled by conservative figures, including Blackstone Group’s Steve Schwarzman and Citadel’s Ken Griffin. Leon Cooperman, a Republican donor with a major family foundation, said he feared the provision would dampen giving, while Lawson Bader, head of DonorsTrust, said it “seems to be really nothing more than a money grab that is — I think — tinged with some political DNA that has me uncomfortable.” The tax hike has passed in the House, but opponents hope to kill it in the Senate. (Politico)

Large foundations are considering ways to minimize the tax hit they would take under a Republican proposal to hike tax rates on their investment income. Possibilities include giving via limited-liability companies or donor-advised funds, or handing stock over to recipient charities to sell instead of paying taxes on gains from any sales themselves. An expert on foundation investing said if the proposal passes, then “it makes no sense” to eschew tax-free options, but that would come at a societal cost. “You’re taking money that’s very transparent and sort of forcing it into these darker pools, where you don’t have the 5 percent distribution requirement” for foundations’ annual giving, said John Seitz, FoundationMark’s founder and CEO. (Bloomberg)

The conservative Heritage Foundation nonprofit think tank wrote the blueprint for the Trump administration’s attacks on foreign students, universities, and others sympathetic to the Palestinian cause. Its Project Esther, a strategy to fight antisemitism, casts critics of Israel as supporters of terrorism who should be “deported, defunded, sued, fired, expelled, ostracized, and otherwise excluded from what it considered ‘open society.’” Administration officials will not say if they are working from Project Esther’s recommendations, which include revocations of student visas and defunding universities. Noting that Project Esther ignores right-wing antisemitism, progressive groups and some Jewish organizations say it is really an effort to kill progressive activism. The project’s director said it deals with right-wing antisemitism by leading by example. (New York Times)

The so-called “nonprofit-killer” provision has been removed from the budget bill making its way through the House of Representatives. Previously tucked into a package of amendments, the measure would have allowed the Treasury secretary to revoke groups’ tax-exempt status by deeming them supporters of terrorism “with little in the way of due process or evidentiary standards.” Republicans, sometimes with support from Democrats, have repeatedly tried to pass the measure following a wave of pro-Palestinian activism last year. It was not immediately clear why it was deleted from the current legislation, but the measure has raised concern not only among progressives but also among conservatives who fear they could be targeted under a different administration. (Intercept)

Major corporate sponsors have been pulling their support from New York City’s Pride festivities, exacerbating the financial woes of the celebration’s nonprofit organizer. A spokesman for Heritage of Pride said most of the fleeing sponsors cited economic uncertainty and retrenchment in their decisions. Executives at other LGBTQ service groups, however, said they, too, are losing sponsors, who are afraid to run afoul of the Trump administration’s campaign against diversity, equity, and inclusion efforts. The exodus of donors leaves Heritage of Pride with a $750,000 shortfall, on top of recent annual losses. The group is launching a grassroots fundraising appeal. (New York Times)

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Medical Care: Family Medicine Cares USA, a program of the American Academy of Family Physicians Foundation, helps new and existing free clinics to care for the uninsured in areas of need across the United States. Reimbursement grants fund the purchase of durable medical equipment and instruments necessary for the diagnosis and treatment of primary care patients. Grants up to $25,000 for new clinics and up to $10,000 for existing clinics; application deadline July 15.

Youth Leaders: Rural Youth Leaders, a collaborative initiative, aims to uplift and invest in the leadership of creative young people and the cultural stewards who support them in rural communities. Teams from six rural communities across the U.S. and tribal nations will be selected, each consisting of two emerging leaders (aged 18-24) engaged in creative arts and cultural traditions, one cultural steward mentor, and one nominating organization. The youth leaders will participate in a fellowship, accompanied by the cultural steward. Teams receive $2,500 stipends for each youth fellow and $10,000 to support the cultural steward and nominating organization; application deadline June 16.