Here's how philanthropy may change under Trump

“Anxious.” That’s how Phil Buchanan, president of the Center for Effective Philanthropy, described the current mood pervading the philanthropic sector following the election of Donald Trump for a second term as U.S. president. Certainly, there are reasons for concern: Vice President-elect JD Vance called large foundations “cancers on American society,” suggesting that their assets be seized. A bill that would target nonprofits deemed “terrorist supporting” has passed the House of Representatives, raising panic over the future of civic spaces. Trump himself has pledged to punish his enemies, including those, such as Facebook founder Mark Zuckerberg, who have donated to causes that conflict with Trump’s interests. “When you have a candidate saying, ‘I am your retribution’ — what is the implication of that?” Buchanan asked. “The concern should cross the ideological spectrum.” If Trump 1.0 taught us anything, it’s that it’s impossible to forecast what will happen next. Still, it doesn’t take a psychic to know where the hammer is likely to fall, with the new administration widely expected to take aim at “woke” initiatives ranging from climate change to immigration to reproductive health. Historically, philanthropy has been known to step up during times of upheaval. During the COVID-19 pandemic, for example, foundations played a critical role in filling the gaps left by governments — according to research from the Center for Disaster Philanthropy, corporate foundations and corporate giving programs accounted for $9.4 billion, or 44%, of the total COVID-19 funding in 2020. Maggi Alexander, a senior partner at The Philanthropic Initiative, told Devex that when the pandemic hit, the initial reaction of her clients — who range from individuals to corporations — was to reduce their giving out of concern for their endowments. But after the first shocks of panic subsided, the majority realized they actually had an opportunity to give even more. “The reason people get into philanthropy in the first place is because they want to do good in the world, and they want to give back,” she explained. “Even in really tough times of uncertainty, they tend to double down.” An uncertain future The extent to which philanthropy can counterbalance government cuts depends, of course, on how deep the cuts end up being. Trump has appointed billionaires Elon Musk and Vivek Ramaswamy as co-heads of a new entity called the Department of Government Efficiency, which has already laid out a list of targets that include eliminating $1.5 billion from “international organizations,” though what precisely that means is unclear. Also under fire are predictable Trump bêtes noires, such as Planned Parenthood and the Corporation for Public Broadcasting. If funding is indeed curtailed to the extent anticipated, philanthropy will face significant pressure to fill the void, said Ben Soskis, a senior research associate in the Center on Nonprofits and Philanthropy at the Urban Institute, who focuses on how historical inquiry can inform current philanthropic practice. While some organizations did see a bump in “rage giving” in the immediate aftermath of the election, there has yet to be a commitment from funders “to really open up the taps,” he said. Though it’s possible that will change, Soskis said funders are reluctant to make major increases in payouts. “Generally speaking, it's never a great bet to bet on foundations spending more,” he said. Not every aspect of philanthropy’s future is necessarily tied to the election. The Council on Foundations’ most recent State of Global Giving report found little deviation in global grantmaking behavior between the Obama administration and the first Trump administration, a revelation that Natalie Ross, COF’s vice president of membership, development, and finance, found surprising. “It’s a good reminder that the number of foundations that actually work globally and fund nonprofits overseas directly is relatively small,” Ross told Devex, adding that 50% of the total comes from the Gates Foundation alone. The implications of tax cuts In December 2017, during his first year in office, Trump signed a law that cut taxes for the wealthy and nearly doubled the standard deduction — the tax-free amount Americans can claim annually — significantly reducing incentives for charitable giving. In the U.S., taxpayers have two options: They can take either a standard deduction, which next year will be $15,000 per person, or they can itemize each tax-free expense. Charitable donations have qualified as itemized deductions since 1917, creating a major motivation for Americans to give. Raising the standard deduction encouraged taxpayers to stop itemizing — and around 30 million people did. As a result, charitable donations plummeted, dropping from $63 billion to $42 billion in 2018 alone. The provisions, known colloquially as the Trump tax cuts, are set to expire at the end of 2025, but they are now relatively likely to be renewed. There is some hope that the renewal debate might yield some more incentives to give. Though Republicans will hold the presidency, the House of Representatives, and the Senate, experts hope that incentivizing charitable giving will create an opportunity for bipartisan cooperation. “Perhaps [we can] move to an environment in which it isn't just itemizers who benefit from tax deductions for their charitable contributions, but instead, every taxpayer gets an incentive to be philanthropic,” Buchanan said. Assuming the current provisions remain in place, Soskis argues that the greater predictor of giving levels will be the strength of the economy. Traditionally, prosperous times have correlated to higher levels of giving — if people have more money, they’re more likely to feel that they’re in a position to give it away. A strong stock market and real estate market could also lead to more money being given away, particularly by those leaving a legacy in their will. A more political philanthropic landscape? It’s worth noting that the majority of donations to U.S. nonprofits come from an increasingly small pool of high-net-worth donors, people whose giving is unlikely to be significantly buffeted by policy. Still, having a high concentration of donors means that charitable causes will rise and fall according to the whims of a wealthy few. Trump’s victory also reignites questions about the implications of a U.S. withdrawal from entities such as the World Health Organization, which would position the Gates Foundation as the agency’s top donor. In light of these potential developments, is philanthropy poised to become more political? It’s a key question, Soskis acknowledged. Bill Gates, once avowedly apolitical, donated $50 million in support of Vice President Kamala Harris’s campaign, noting that “this election is different.” Jeff Bezos, meanwhile, congratulated Trump in a tweet, commending him on his “extraordinary comeback.” Though these developments are not representative of the future politicization of philanthropy on their own, Soskis predicts that funders may become more stratified — either they’ll lean more decisively into their views, or they’ll retreat deeper into neutrality in hopes of pursuing their agendas unharassed. Pressure — or outright attacks — from the administration on their operations may galvanize funders one way or the other. Globally, the bigger issue for organizations such as COF is that of closing space, with a growing number of governments like China and India, as well as smaller countries such as Hungary and Uganda, blocking foreign support for domestic civil society organizations. While not directly tied to the U.S. election, Ross said, these restrictions are worrisome from the standpoint of foundations supporting locally led development, especially in light of the looming cuts to foreign aid. “If that continues to be an issue, it could be concerning,” she said. While it’s too soon to know how the election will ultimately impact the sector, experts say it does present an opportunity for philanthropists to reimagine what effective giving looks like. How can foundations reduce restrictions and pave the way for flexible, long-term support to nonprofits who will need it most, Ross asked. When it comes to funding organizations, she said, “It's really important for philanthropy to not make it harder than it needs to be.” “In times of crisis, we have seen them [step up], so we can hope that they will continue to do that.”