A Less Generous World
From individuals to companies to countries, philanthropic giving appears to be contracting.
We’re in turbulent times economically and politically, and for nonprofits, turbulent times are rarely good.
Downward trends in charitable giving have been observed in the United States and globally, affecting all donors, including private foundations, government agencies, and corporations. The policy decisions of the Trump administration have been a contributing factor to recent turbulence. However, many of the trends predate the new administration.
It’s difficult to make decisions about funding strategies without data. Curious about the factors influencing funding trends, we examined recent reports on trends in charitable giving that affect individual donors, government agencies, corporations, and foundations.
Giving Trends
In the United States, More Money But Fewer Donors
American charitable giving reached a record high of $592.5 billion in 2024.1 This suggests that philanthropy in the U.S. is thriving, but beneath the surface, all may not be well: While the total dollar amount of giving has risen, the number of donors participating in charitable giving dropped 4.5% from 2023 to 2024, marking the fourth consecutive year of decline.2
According to Giving USA, donor participation in the United States dropped from 66.2% of adults in 2000 to 49.8% in 2020.3
The Fundraising Effectiveness Project reports that new donor retention has declined in Q1 2025 for donors across all giving levels, except for the “supersize donors,” who give gifts of $ 50,000 or more.4
The shrinking donor pool may still be just a pending threat for many organizations, which may have benefited in recent years from larger gifts from their existing major donors. However, for those relying on micro or small donors, the donor group where the largest reduction in donors has occurred, the effects of the smaller donor pool may already be a concern. The drop in small donors may place greater pressure on organizations to find additional grant funding to fill their funding gaps. However, as we’ve covered in other posts, grant-based funding is also changing and is increasingly harder to get.
Shifts in charitable giving are also affecting global philanthropy.
Globally, More Regulatory Barriers & Reduced Aid
Globally, there are other shifts in giving. According to a recent Gallup survey, global giving shifted in 2024, with all forms of charitable giving experiencing significant declines.5 For international philanthropy specifically, the Global Philanthropy Environment Index 2025 noted a decline in cross-border philanthropy due to economic conditions and increased regulatory barriers.6 Other factors influencing global philanthropy are changes in foreign aid among European governments, which are reducing foreign aid and increasing defense spending in response to the Ukraine war.7
Corporations have been major players in both global and domestic philanthropy. However, in part due to changing tax rules, they are also pulling back on giving.
For Corporate Philanthropy, More Political Pressure
In the United States, corporate giving has undergone changes, partly due to political pressures and partly in response to economic concerns.
A recent survey by the Conference Board found that many companies are reducing support for diversity, equity, and inclusion (DEI) initiatives and other politically sensitive topics in an effort to avoid scrutiny from the federal government. The same survey found that two-thirds of companies reported that their nonprofit grantees had lost government funding in 2025, leading the organizations to implement layoffs and program cuts.8
Another factor influencing corporate donations is an upcoming change in U.S. tax law. Under the One Big Beautiful Bill Act, companies can only take a deduction if they donate at least 1% of their taxable income.9 For example, if a corporation has $5 million of taxable income, the 1% floor would be $50,000 (the maximum deduction a company can take is equal to 10% of taxable income, in this example, $500,000). This change in the tax law will reduce the incentive for companies to make smaller donations below the 1% threshold.
If government funding were steady, the drop in corporate funding might be less impactful. Unfortunately, federal funding is anything but stable.
Unpredictable Fluctuations in Federal Funding
In earlier posts, we’ve discussed the negative effects of government cuts (see Related Posts below). To recap, since the Trump administration took office in January 2025, the U.S. government has frozen or terminated grants affecting organizations in multiple states and programmatic sectors, particularly in the areas of scientific research and foreign aid. Whether an organization can survive the absence of federal funding — particularly the sudden cuts in funding that have been happening — depends on its cash reserves, which many nonprofits do not have in large amounts. These cuts are not discriminatory. They impact organizations of all sizes that focus on different issues and are based in various locations, including states and communities led by Republicans.
The U.S. government is a significant supporter of the nonprofit sector. According to the Urban Institute, a survey of nationally representative nonprofits found that two out of three nonprofits surveyed reported receiving at least one government grant or contract (with grants dominating over contracts),10 and “ in every state, between 60 and 80 percent of nonprofits that receive government grants would be operating at a loss without those grants.”11
In the absence of federal funding, organizations will look increasingly to foundations. Foundation funding is holding its own, but it also has its worries.
Stable(ish) Foundation Funding
Candid’s 2025 Foundation Giving Forecast Survey found that most foundations expected to keep their giving at the same level as 2024.12 Overall, Candid reported that survey results were mixed regarding 2025, due to foundations’ uncertainty about potential economic and political shifts. Foundations’ concerns include market volatility and changes in how foundations are taxed.
In the same survey, 21% of foundations indicated that they would adjust their grantmaking focus in 2025 to help “fill the gap” from cuts and delays in government funding, which means that the vast majority of grantmakers surveyed will continue to fund their current priority areas.
For nonprofit organizations that rely on funding from a core set of donors, the fact that most foundations are not planning to change their giving priorities is welcome news. For organizations that have lost or expect to lose government funding in 2025 and hope to expand funding from private foundations, learning that the majority of foundations appear not to be increasing funding levels in 2025 or changing their priorities is likely to be disheartening.
With all sources of funding in a period of flux, what can organizations do to survive? It’s back to the tried-and-true methods of collaborating and adapting.
The Survival Strategy: Partnerships & Recalibration
Partnerships
For grant writers and nonprofit leaders, the next question is how to meet the moment and adapt to declining numbers of opportunities and donors.
For larger nonprofit organizations, the effects of these changes may cause less upheaval than for smaller organizations. National organizations are better positioned than the smaller community-based nonprofits to attract wealthy individual donors from across the United States and compete for larger foundation grants and what remains of government awards.
For smaller organizations, expanding their partnerships will be key to their survival.
In the international development sector, it is common for foreign aid programs, including those historically led by the U.S. government, to require international NGOs to partner with local organizations based in the country where the work will be conducted. In the United States, if foundations and the U.S. government enforced similar requirements for domestic grants, for example, requiring all project grants above a specific dollar value to include partnerships with local organizations — or each application to be submitted by a consortium consisting of X number of partners — it could not only distribute funding more broadly but also help small community organizations access new sources of grant funding.
Diversification of funding is the default answer when there are threats to traditional funding sources. Diversification can help, and it makes sense for every organization to have a revenue strategy that includes multiple funding streams. The challenge is that not all organizations will be able to diversify their funding streams (i.e., different types of funding) or grant sources (i.e., funding from various foundations) to fill the gaps created by the decline in the number of donors and grant opportunities. Partnerships are the primary way for smaller organizations to tap into federal grants and connect with new donors, such as the larger foundations, that they would be unable to apply to on their own.
Recalibration
While the funding outlook is challenging in the near term, an optimistic interpretation is that we could be going through a period of perhaps needed recalibration, where some organizations will be forced to make overdue cuts to “right size,” while others, such as community-based organizations in particular, see an increase in funding, as individual donors, community foundations, and local governments step in to counteract the effects of the federal cuts.
There is no single solution for this funding environment. However, a conservative approach would be for organizations to assume that there will be permanent reductions in federal funding and plan accordingly. They should also expect lower win rates for federal and other grant proposals due to heightened competition. Lastly, they should plan to increase their partnerships with other organizations to share resources and collaborate on opportunities.
Related Posts
Giving USA. Giving USA 2025: U.S. charitable giving grew to $592.50 billion in ... https://givingusa.org/giving-usa-2025-u-s-charitable-giving-grew-to-592-50-billion-in-2024-lifted-by-stock-market-gains/
Giving USA. Giving USA 2025 Report Insights - BWF https://www.bwf.com/giving-usa-2025-report-insights/
Philanthropy.com. Donors Are Down, but Dollars Are Up — How U.S. Charitable Giving ... https://www.philanthropy.com/article/donors-are-down-but-dollars-are-up-how-u-s-charitable-giving-is-changing
Fundraising Effectiveness Project. Quarterly Fundraising Report. FEP 2025 Quarterly Benchmark Report. https://publications.fepreports.org/
Good Faith Media. New Gallup Poll Finds the World Is Less Charitable https://goodfaithmedia.org/new-gallup-poll-finds-the-world-is-less-charitable-2/
Indiana University Lilly Family School of Philanthropy. The Global Philanthropy Environment Index 2025 - [Global Philanthropy Environment Index](https://globalindices.indianapolis.iu.edu/environment-index/index.html
BBC. Africa to be hit hard as UK foreign aid cuts revealed. https://www.bbc.com/news/articles/c1wpr39zg5xo
Forbes. Majority Of Companies Say Federal Pressure Impacts Their Philanthropy. [Majority Of Companies Say Federal Pressure Impacts Their Philanthropy]https://www.forbes.com/sites/timothyjmcclimon/2025/09/08/majority-of-companies-say-federal-pressure-impacts-their-philanthropy/
Pierce Atwood. Congress Imposes 1% Floor on Corporate Charitable Deductions. https://www.pierceatwood.com/alerts/congress-imposes-1-floor-corporate-charitable-deductions
Urban Institute. Government Funding Cuts Put Nonprofits at Risk across the Nation https://www.urban.org/urban-wire/government-funding-cuts-put-nonprofits-risk-across-nation
What Is the Financial Risk of Nonprofits Losing Government Grants? https://www.urban.org/research/publication/what-financial-risk-nonprofits-losing-government-grants
Candid. More than a third of foundations expect to boost giving in 2025 but outlook remains unpredictable https://candid.org/blogs/data-forecasts-more-foundation-giving-in-2025-charitable-giving-trends