Philanthropic efforts gaining momentum as government assistance wanes, according to a NYT correspondent's perspective.
Updated: May 2, 2025 at 9:27 AM CDT
The Trump administration is scaling back crucial government sectors' budgets, including public health, environmental protection, international aid, and education. In April, the federal government froze over $2.2 billion in grants and $60 million in contracts intended for Harvard University, following the school's refusal to curb campus activism as demanded by the administration. Harvard has since taken legal action against the administration, alleging the move as unconstitutional.
In response, some philanthropists are bridging the funding gap. For instance, Bloomberg Philanthropies vowed to uphold U.S. commitments to international climate agreements after federal withdrawal. The Marguerite Casey Foundation plans to disperse $130 million in 2025, an increase, to aid community-led efforts and promote nonprofit independence. Freedom Together Foundation is doubling its grant payout, citing expanding funding gaps at the federal level. The MacArthur Foundation has committed at least $150 million more to its endowments to bolster civil society groups facing threats. (Note: NPR receives financial support from the MacArthur Foundation.)
Questions arise about the future of research and services when government funding diminishes. Sabrina Howell of NYU's Stern School remarked, "No private company would assume that kind of work on their own because it's very expensive... only government can fund that kind of research." In contrast, Richard Vedder of the Independent Institute, a libertarian think tank, suggested reevaluating research grant money could be a valid move.
As the New York Times reported, prominent donors and business leaders, such as Michael Bloomberg, former New York City mayor and founder of Bloomberg Philanthropies, have offered financial assistance to Harvard. However, some major donors are pressuring university leaders to soften their stance against the Trump administration and negotiate with the White House. Hedge fund billionaire John Paulson has privately urged Harvard to reconsider its position, while Bill Ackman and Kenneth Griffin, significant donors, have publicly criticized the university.
In discussions on Morning Edition, Teddy Schleifer of the New York Times, who covers billionaires, pointed out that as private institutions, they are not accountable to the public. Schleifer noted that institutions that receive some public funding give the President of the United States leverage to withhold money, potentially forcing these institutions to bend to his demands.
When private donors replace public funding, the donors' influence increases. As Schleifer explained on Morning Edition, these donors can promote their business interests and commingle them with those of their grantees, resulting in a powerful dynamic. In an era of diminishing public funding, it's a billionaire's checkbook that often fills the void when services and research are on the line.
Interview Highlights
A Martinez: So, when private donors step in to replace public funding, what kind of power does that offer?
Teddy Schleifer: As a private institution, you are not accountable to the public. Theoretically, the twist on that, though, is that lots of these private schools take plenty of public funding, and that gives Trump leverage to sort of twist them and make them beg and make them maybe bend the knee in a way that, if they were totally privately funded, these institutions could give Trump the middle finger even more. But the reality is, every kind of institution of higher ed is somewhat publicly funded, except for in extreme cases, and that gives the President of the United States leverage to withhold money.
Martinez: Outside education, we've seen foundations ramp up grant making. I know former New York City Mayor and billionaire Michael Bloomberg has a pledge to cover U.S. funding for global climate work. Are these sorts of things stopgaps, or donors trying to set new agendas?
Schleifer: I think the Bloomberg example is interesting. I would argue that that is actually a bit of an exception. I think what we're seeing right now is lots of philanthropists saying that they are unable to kind of be that bulwark against federal funding cuts. Especially in a global context, you've seen lots of foundations either say explicitly or sort of implicitly that they don't have enough money to do this sort of thing if the US government is going to stop funding USAID, for instance, I think it takes like $40 billion a year. Like there's no foundation in the world, or no rich person in the world who could, come with $40 billion a year to be that replacement funding. So I don't even know if they're really stopgaps. I think there's been in the charitable sector a lot of hands being thrown up, and the belief that there's no real way to cover Trump's subtractions.
Martinez: What worries these big-time donors right now? I mean, are they genuinely concerned about public services collapsing, or are they more focused on protecting their causes and reputations?
Schleifer: I think lots of philanthropists are torn because they want to speak up enough to protect the grantees from Trump, but they don't want to speak up too much, so much that they attract Trump's unwanted attention. I think if you look at institutions like the Gates Foundation right now, a lot of grantees or partners of the foundation are facing existential threats to their humanity. Take USAID. The Trump administration has gutted that agency, and Bill Gates and his philanthropic aides are concerned, but they don't want to say too much, because they don't want the retribution campaign that has targeted USAID to come for Bill Gates himself.
Martinez: You think we're seeing maybe a permanent shift here where public services increasingly depend on private donors?
Schleifer: That seems to be true in some places for a while. A shrinking public sector can reward and empower a private sector and a billionaire class that is richer than ever, and that comes with trade-offs. Sometimes you hear private philanthropists defend themselves where they say, Hey, what do you want me to do? Like, put the money under my mattress or spend it on yachts? Like to be involved. Yes, it makes me more powerful, and it gives me the ability to put my own business interests and commingle those with my grantees interests, but if the public sector is shrinking, wouldn't you rather have the private sector involved than not? That's sort of the counter argument that lots of wealthy people make, is that the alternative world where the public sector is shrinking and the private sector is shrinking is the worst outcome. So if you're a nonprofit, or you're a higher ed institution or a lab, a research lab out there, the worst case scenario might be for everyone to ignore you, but there is sort of this seesawing that happens between the private sector and the public sector with regards to philanthropy and taxes and federal spending, where it always feels like, if you're a grantee, you are choosing your best tormentor, you know you're choosing the institution and the funding source that is the least bad. But everything's a little bad.
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Insights:
While philanthropic funding can provide a temporary cushion, systemic underfunding risks permanent service reductions, particularly in vulnerable areas. Private funding often lacks the accountability mandated by federal oversight, leading to potential power imbalances and differences in priorities. The growing influence of billionaire philanthropists complicates the dynamics between public and private sectors, creating a precarious position for institutions relying on both funding sources.
- The community-led efforts will receive a $130 million boost from the Marguerite Casey Foundation in 2025, as they aim to bolster nonprofit independence due to government funding cuts.
- The Trump administration's scaling back of budgets for sectors like education and environmental protection has raised questions about the future of research and services.
- In order to support U.S. commitments to international climate agreements, Bloomberg Philanthropies has pledged to uphold certain funds after the federal government's withdrawal.
- Notable billionaires, such as Michael Bloomberg, have offered financial assistance to Harvard in response to the federal government's freezing of grants.
- In discussions on the future of education and self-development, it was noted that when private donors replace public funding, the donors' influence increases, potentially leading to a powerful dynamic.
- Teddy Schleifer pointed out that as private institutions, they are not accountable to the public, but when they take public funding, the President of the United States has leverage to withhold money, potentially forcing these institutions to bend to his demands.
