Philanthropy in the Crosshairs

Since late January, leaders at liberal foundations and donor networks have been preparing for a legal assault by federal agencies. That moment finally arrived in September, when, in the wake of Charlie Kirk’s assassination, Deputy Attorney General Todd Blanche directed federal prosecutors to investigate the Open Society Foundations on a range of possible criminal charges, reportedly on orders from the White House. Two weeks earlier, Donald Trump had vowed to go after George Soros, the founder of OSF: “We’re going to look into Soros, because I think it’s a RICO case against him and other people,” Trump said on September 12, referring to the federal racketeering law. “Because this is more than, like, protests. This is real agitation.”

No president has ever before singled out a private foundation or a major philanthropist for an investigation into whatever charges might stick, at least that I can recall from 30 years of working in this field, and OSF—an organization with a long history of battling authoritarian leaders worldwide—was quick to explain what’s really going on here: “These accusations are politically motivated attacks on civil society, meant to silence speech the administration disagrees with and undermine the First Amendment right to free speech.”

In addition to launching the investigation of OSF, the administration issued a presidential memorandum on September 25 announcing a new law enforcement effort to “disband and uproot” groups that the administration alleges support “domestic terrorism.” This move came 10 days after Vice President JD Vance promised to “go after the NGO network that foments, facilitates, and engages in violence,” mentioning not only OSF but also the Ford Foundation, which draws on a $16 billion endowment to fund a wide range of social-justice organizations in the United States and around the world.

It’s not surprising to see two top liberal foundations in the Trump administration’s crosshairs. Wealthy grant-making institutions, with their allegedly radical agendas, have been a bogeyman on the right for at least 50 years. They have often been depicted as the great puppet masters of the left, bankrolling and directing a who’s who of progressive groups intent on destroying the American way of life. These attacks have escalated dramatically over the past decade, steadily taking on a darker tone, with allegations that funders have unlawfully bankrolled election activity and groups engaged in violence. Once Trump took office earlier this year, it seemed only a matter of time before weaponized federal agencies set their sights on liberal philanthropy.

To many progressives, there’s no small measure of irony in hyped-up claims about the clout of the left’s foundations. The reality is that most of these institutions are cautious and slow-moving. They tend to see themselves as neutral players that operate above the political fray, guided by reason, evidence, and a commitment to problem-solving. While funders have contributed heavily to progressive groups in recent years, they’ve chronically underinvested in work to build political power and shift narratives, especially around the economic issues that preoccupy Americans. Most have also avoided perfectly legal opportunities to support efforts to increase voter participation in the lead-up to crucial elections since 2016, when the fate of democracy—and, in fact, everything these funders care about—was on the ballot.

As the attacks on civil society escalate, with foundations themselves now under investigation, the stakes have only gotten higher. In a statement released on October 1, Deepak Bhargava, who leads the Freedom Together Foundation, called the Trump administration’s investigation of OSF part of a larger set of “blatant efforts to weaken civil society’s ability to hold the government accountable…. This is a code-red moment for our country and we must respond with the seriousness it demands.”

It’s unclear how many foundation presidents share either Bhargava’s sense of urgency or his willingness to directly confront the administration. “Some people get it, others don’t,” a well-connected democracy funder told me a few months ago, discussing his fellow grant-makers. Like other sources in philanthropy I’ve spoken with recently, he was willing to speak candidly only on the condition that his name not be used. He said that many foundation leaders seem to think that they can wait out the Trump term and then, eventually, things would return to normal.

In the current climate, though, it’s become increasingly clear that foundations will not be able to escape the growing storm. These deep-pocketed institutions need to learn how to fight harder and smarter in the political arena, and quickly—both to defend decades of investments in social change and, ultimately, their own ability to operate freely in a democratic society.

With deep coffers and a wide latitude to take risks, the philanthropy sector is uniquely positioned to push back against right-wing authoritarianism—in theory, anyway. And some liberal funders have done exactly that over the past eight years, helping Democrats win important battles. During Trump’s first term, they underwrote a blizzard of litigation to block his policy priorities and provided crucial support for “Resistance” groups that helped to stop the Republican attempt to repeal Obamacare and shifted public opinion in ways that fueled Democratic victories in the 2018 and 2020 elections.

But most liberal grant-makers have either stayed on the sidelines in the struggle to defend democracy or brought only a small fraction of their resources to these efforts.

Complacency is one explanation for this relative passivity. Over the past 30 years, foundations have been repeatedly warned about the threats posed by a radicalized right—only to repeatedly ignore them. The goals of this movement are no great secret: to roll back the New Deal and Great Society safety-net programs, dismantle the modern regulatory state, and eviscerate civil-rights-era laws. More recently, Trump has added another item to this extremist to-do list: destroying the liberal international order, including key alliances like NATO. Each of these goals would unravel the gains that philanthropy has invested billions to help achieve over the past 70 years, while also blocking progress in the crucial areas where it’s currently involved, such as climate change and public health.

In other words, the stakes for these institutions could hardly be higher, even before it became clear that philanthropy itself might be a target. Still, funders have routinely shrugged off warnings about what they were up against. Most famously, political strategist Rob Stein led a campaign two decades ago to educate grant-makers about how the right was building a powerful media and political machine to destroy liberalism. These warnings helped galvanize the creation of the Democracy Alliance, a high-powered group of left-of-center donors, which includes some foundations. But most top grant-makers ignored Stein’s warnings.

One reason for this complacency is that many grant-makers embraced a Pollyannaish reading of history, especially during the hopeful Obama years. “We in philanthropy assumed too much,” a foundation CEO told me. “We believed we arrived at a place of permanent social progress…that social progress was linear.” He added, “For anyone who understands American history, we know that’s not true.”

More pointedly, the philanthropic world failed to reckon with the deep structural shifts in American economic life that left increasingly large swaths of the population living in frustration and anxiety, planting the seeds of an explosive politics of resentment. Or how the Iraq War and the 2008 financial crisis discredited institutions. “We’re living in the collapse of the neoliberal consensus that has failed to deliver for people for a very long time,” said a top progressive grant-maker. “Liberal philanthropy failed abysmally to meet the moment. Most of it acted as if there weren’t an earthquake going on.” Worse, he said, much of the sector “has been a defender of the broken status quo.”

Even after Trump’s first election victory, many funders failed to grasp the roiling discontent and alienation in US society—or how much darker the mood could turn.

This complacency is not so surprising to anyone steeped in the circumspect, technocratic ethos of American philanthropy.

Since the early 20th century, many foundations have embraced a theory of change that goes something like this: Identify problems you want to solve, invest in research and policy development to find effective interventions, and then get those solutions implemented—either by bankrolling the work yourself or by collaborating with public and private partners to build new programs. Grant-makers have also heavily funded policy experts, advocates, and litigators to defend and build upon gains over time.

These strategies have done a lot of good in the world. But they assume certain conditions: that expert knowledge carries authority and that facts matter to Democrats and Republicans alike; that progress is possible under either political party, with both committed to democratic norms of governance; and that the federal judiciary is largely populated by impartial judges.

Those conditions began to disappear in the 1990s, thanks to shifts in media and politics; by the time Trump took office in 2017, they had largely vanished. Liberal philanthropy confronted a drastically different environment. Elite experts are not only distrusted but often vilified. Facts matter less than the narrative, which can easily be shaped by misinformation. Partisan, right-wing judges increasingly dominate the judiciary. The Republican Party has become radicalized and has little regard for democratic norms; it also has an ever more expansive agenda for dismantling civic institutions, starting with the government.

All of these shifts have made it difficult for funders to operate effectively using the traditional philanthropic model. But perhaps none have been more confounding than the changes in media and information. It’s hard to implement solutions using reason and knowledge in an era when the truth is endlessly contested, with Americans getting their news from sources with wildly varying levels of reliability, much of it with a strong rightward slant.

In the two decades since Rob Stein warned the philanthropy world about the right’s narrative dominance, the problem has gotten much worse, as the conservative media and influencer ecosystem has exploded in size.

This new information juggernaut may be the greatest challenge facing what has been repeatedly dubbed the “reality-based community,” of which philanthropy is an important pillar. How can you have a serious debate about, say, immigration when millions believe that migrants commit crimes at a higher rate than native-born Americans? Or about democracy when a third of the country is still convinced that the 2020 election was stolen? Or about public health when anti-vaxxer messaging is shared by top podcasters and Republican officials? In such an environment, good-faith debate becomes far less relevant than who has the best-funded and most persuasive megaphone—propaganda, in other words.

Foundations have had plenty of time to respond to these shifts in the information landscape. Yet beyond a few initiatives here and there, such as Press Forward—a half-billion-dollar grant-making initiative to support local news—this area hasn’t been a priority for foundations.

Without question, though, the single biggest failure of Big Philanthropy in recent years has been its unwillingness to challenge an economic system that falls short for so many people.

While concerns about affordability and upward mobility have increasingly preoccupied Americans since the 2008 financial crisis, the same has not been true for philanthropy-backed nonprofits. The best-funded left-of-center advocacy groups—which operate in close concert with elected Democrats to compete for power with the right—have largely not been speaking to people’s material concerns in the past 15 years. They’ve been more focused on issues like racial justice, gender equity, climate change, and gun violence.

These are profoundly important issues and can deeply shape people’s economic opportunities. But they consistently rank as far lower priorities for voters, particularly the non-college-educated voters of all races who make up two-thirds of the electorate.

The perception that Democrats and the broader left are tuned out of people’s economic struggles was underscored by a New York Times poll in January that found voters thought the most important issues to the Democratic Party were abortion, LGBTQ rights, and climate change. Meanwhile, voters said the economy was the issue that mattered most to them. This mismatch is likely the single biggest reason that so many voters of color have exited the left-of-center coalition in recent years, a trend that’s culminated with Trump winning a larger share of Latino and Black voters than any Republican in modern history, helping him secure a second term.

Why has philanthropy sidelined economic concerns? Leaders in the sector offer a number of explanations. One is that foundations are largely run by highly educated professionals with little connection to the working class or material hardship. “Class has been put to the margins of a lot of progressive discourse and philanthropy,” said one foundation CEO. “There’s been a disappearing of that reality from elites on the left.”

But the larger problem may be that foundations and major donors are creatures of capitalism. Their wealth comes from success in business, and it’s no surprise that funders—consciously or subconsciously—aren’t much interested in challenging the system that spawned them.

While some philanthropy does support efforts to increase economic mobility, they’re typically in areas like community development, job training, education, and housing assistance. “Philanthropy turns to individualistic solutions to economic inequality,” said a former foundation CEO. “We don’t have a willingness to actually critique capitalism.” Grant-makers like supporting “services for poor people,” the former CEO continued. “They’re not interested in funding power-building around economic issues.” Another grant-maker agreed: “Most of the economic work is palliative.”

There are exceptions—like the Irvine Foundation, which shifted its grant-making in 2016 to focus on helping low-income workers move up the economic ladder, including by increasing their political power. Ford has been another leader, backing a set of new labor-movement groups that include the National Domestic Workers Alliance and Restaurant Opportunities Centers United, joined by various other funders. In 2018, the Hewlett Foundation began work that explicitly critiqued the failures of neoliberalism and embarked on the search for an alternative economic paradigm. Other funders, including the Omidyar Network, have supported this effort, shaping the Biden administration’s efforts to strengthen manufacturing, challenge monopolies, and more.

But while this funding did influence policy, philanthropy’s overall efforts to address people’s everyday struggles to get ahead have remained too small and scattered to have much impact on broader narratives.

Over the past nine months, as the Trump administration has escalated its attacks on democratic institutions, many foundations have largely continued business as usual, with only minor changes to their funding priorities. However, others, such as the Freedom Together Foundation, the MacArthur Foundation, and smaller institutions like the Marguerite Casey Foundation, have mobilized to meet the moment. They have increased their grant-making and joined other funders to push back against the Trump policies that target civil society. Both publicly and behind closed doors, they have urged more of their fellow grant-makers to join them in the fight.

These foundations understand that they’re in a battle with existential stakes that include the survival of democracy and a well-functioning federal government. In turn, those stakes affect every part of American society. Whether a foundation is working on climate change, the arts, global health, or supporting social services, its priorities are now at risk. In the face of MAGA’s broad policy agenda and brazen power grab, a siloed approach to solving societal problems is no longer tenable. Nor can most foundations keep taking a pass on pushing back against an increasingly illiberal right, hoping that a handful of other, more courageous foundations will win the fight for them.

This reality should now be clearer in the wake of Trump’s recent moves against civil society, although it’s too early to say whether it will prompt more foundations to take action. In any case, stepping up to help protect democracy in the near term is only part of the solution. Any successful strategy to defeat right-wing authoritarianism must also channel the deep sense of so many Americans that the economic status quo is broken and that dramatic change is needed. This crisis of opportunity stems from systemic failures that demand collective solutions, not the individualistic ones that philanthropy often favors.

Looking ahead, the foundations that are already working to confront entrenched inequality need to ramp up their grant-making to groups that organize at the local level while also pulling in more funders to make similar investments. The moment is ripe for such efforts, as Trump’s policies hit red and blue communities alike, slowing growth and raising costs. A powerful backlash against these polices could shape politics for years to come by finally discrediting a fake MAGA populism that, in practice, inflicts pain on working people. But this chance for a political pivot may be missed if philanthropy fails to rapidly scale organizing work to meet the moment.

Yet even as foundations invest more in organizing, it’s critical that they look much more closely at the progressive groups they support. The best organizing groups connect deeply in communities with an inclusive ethos and set their agendas with input from their members. They avoid political litmus tests and foster a sense of belonging among people. They’re also pragmatic and ready to compromise. As a funder who works closely with prominent statewide organizing groups told me, “The woke stuff is not driving these organizations…. They’re trying to build a majority political program.” Among other things, this means not making unrealistic ideological demands of elected officials. “We can’t afford to be absolutist when it comes to politicians,” the executive director of a leading national organizing group told me.

Some foundations have long supported the organizing work of highly effective groups and have much to share with other funders. Historically, though, many mainstream foundations have been reluctant to invest in grassroots organizing. That needs to change.

Responding to these dramatic shifts in the media and information landscape must also be part of any long-term philanthropic strategy to defeat right-wing authoritarianism. Some funders are already showing the way by backing a range of new media and narrative projects, such as Accelerate Change, which invests in lifestyle and culture media sites that reach Americans where they’re at and then seek to shape their views. Accelerate Change’s multiple media properties now reach tens of millions of Americans. It has ambitious plans to reach even more people—if it can secure enough funding.

Other groups are also working to formulate messages that can punch through partisan divides, including in deep-red parts of the country. To better understand working-class people in rural America and beyond, the Rural Democracy Initiative created the Winning Jobs Narrative, a groundbreaking public-opinion research project that makes “talking about jobs, work and the economy” central to its mission. A much more widespread adoption of this storytelling strategy could greatly increase the effectiveness of organizing, advocacy, and political campaigns, particularly in rural areas where Democrats badly need to improve their performance. But accomplishing that will require funders to step up in a major way.

Finally, foundations need to lean far more heavily into civic-participation work within the boundaries of current law. The best of these efforts are indisputably effective. When people are involved in public issues by trusted community organizations, they are more likely to engage in politics and vote. Scaling up such work is essential to building a more inclusive democracy.

The midterm elections offer philanthropy a pivotal opportunity to start turning things around. Through unprece­dented investments in 501(c)(3) civic-participation work, funders can ensure that voters fully understand the effects of Trump’s policies and have the opportunity to be heard in the democratic process. Republicans lost 41 congressional seats in 2018. Democrats can regain control of the House next year by flipping a significantly smaller number of seats, even if Republicans gain an advantage through redistricting, which now appears likely.

It goes without saying that for foundations to move forward on any of these fronts, they must retain the ability to operate free from government interference. Whether that will remain the case is now an open question.

Since announcing its investigation of OSF and issuing its presidential memorandum on domestic terrorism, the Trump administration has made no further public moves to crack down on liberal foundations and nonprofit organizations. But leaders across this world are bracing for the worst and consulting with legal counsel in preparation.

It’s still possible that the administration will think twice about initiating a full-scale attack on civil society, given the potential for this tactic to one day boomerang on its own supporters. This point was made by a prominent leader in conservative philanthropy, DonorsTrust CEO Lawson Bader, who recently told The Free Press that Trump’s retaliatory rhetoric after Charlie Kirk’s assassination “has the potential to weaponize philanthropy in a way that is antithetical to philanthropic freedom.” He added that threats to the nonprofit status of law-abiding organizations “narrows the important boundary between citizen and state.”

Of course, Trump has a well-established history of disregarding once-sacrosanct conservative principles. If his administration moves aggressively against independent foundations and nonprofits, this will be yet another example of opportunism triumphing over principle—and another ominous step toward an increasingly authoritarian future.