Foundations across the United States hold nearly $2 trillion in assets, yet many are not moving that money quickly enough to support nonprofits facing a historic crisis. This raises a critical question: whose money are foundations sitting on, and why does it matter for the future of the nonprofit sector? The answer is simple: that money is meant for public good, not private control.
The Current Crisis in Philanthropy
Since 2025, the nonprofit sector has faced unprecedented challenges. Federal funding freezes, grant terminations, and political attacks have left many organizations struggling to survive. According to the Center for Effective Philanthropy, nearly 90% of foundations are seeing more funding requests, but only 30% have increased their giving.
Nonprofit staff are feeling the strain. CEO burnout jumped from 30% to 46% in just one year. Many organizations are freezing hiring, cutting programs, and drawing on reserves just to stay open. Some employees are even facing homelessness.
Whose Money Is It Really?
When a donor gives money to a foundation or donor-advised fund (DAF), that money is no longer theirs. They received a public tax break in exchange for a gift meant to serve the public good. Yet many foundations act as if they are still managing private wealth.
Glen Galaich, author of Control: Why Big Giving Falls Short, argues that donors do not have the right to control funds after they are donated. The money belongs to the public, not the donor. But modern philanthropy often puts donor wishes first, ignoring this legal and ethical truth.
The $18 Trillion Question
Philanthropic wealth could reach $18 trillion by 2050—double the current annual federal budget. Much of this sits in tax-advantaged accounts, earning interest, instead of flowing to communities in need. When foundations delay grants for “strategic refreshes” or grow endowments instead of spending, they are not acting like stewards. They are acting like private wealth managers.
Philanthropy’s Class Problem
Foundation staff are often well-paid with full benefits, flexible schedules, and summer Fridays. Meanwhile, nonprofit employees struggle to afford housing in the communities they serve. This gap raises a hard question: How can foundation staff live comfortably while managing resources meant to help those who cannot meet basic needs?
Nearly half of nonprofit CEOs say staffing is their biggest challenge—not just a top challenge, but the biggest one, for three years straight. The problem is not mismanagement. Over 60% of U.S. nonprofits have annual revenues under $50,000. They cannot afford to pay competitive wages because funders prefer restricted grants over general operating support.
Foundation Boards Are Out of Touch
Elisha Smith Arrillaga of the Center for Effective Philanthropy notes that many foundation boards are far removed from the daily reality of nonprofits. “There are some boardrooms where people are like, ‘Is there a crisis? My investments are fine,’” she says. This distance makes it harder to act with urgency.
What a Different Approach Looks Like
Some foundations are already changing. The Marguerite Casey Foundation, Robert Wood Johnson Foundation, and Kate B. Reynolds Charitable Trust have increased giving and shifted to general operating support. They ask grantees what they need and move money quickly.
Here is what a better model looks like:
- General operating support: Fund the people, not just the programs.
- Multi-year commitments: Stop making nonprofits beg every year.
- Patience: Measure outcomes over program cycles, not fiscal years.
- Urgency: Bring the crisis into boardrooms and act now.
Conclusion: Time to Act
Nonprofits are not asking foundations to be saviors. They are asking for partners who move money with urgency. The organizations doing the work already have trust, relationships, and knowledge. What they lack is cash.
Foundation staff and leaders chose this sector because they care. Now is the time to act on that care. The money is sitting. The need is urgent. The question is simple: Will foundations step up?
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