Funders worry too much. Even the most powerful and lavishly endowed aren’t immune from philanthropy’s penchant for analysis paralysis and excessive caution, a fact the Gates Foundation demonstrated when it re-upped, but did not increase, its multi-year commitment to Gavi, the Vaccine Alliance last month.
“We decided… we’re going to kind of send both messages. That we’re not a substitute — but this is the best buy in global health,” Bill Gates told the Financial Times. His stance reflects a pattern we’ve seen a whole bunch since President Donald Trump and the GOP began swinging the chainsaw: Public funding for key philanthropic priorities is cut, but instead of stepping in with massive new commitments, funders insist on reminding us that philanthropy can’t — or won’t — “replace” government.
Urban Institute senior research associate and consummate philanthropy scholar Ben Soskis disputed that knee-jerk reaction in the Stanford Social Innovation Review recently, urging funders to conquer their fears that covering for vanished government commitments will somehow provide “social license for retrenchment.”
Soskis emphasized that there are bigger priorities than avoiding this “moral hazard,” and I agree: The costs of holding back right now are too steep to let vague fears of a future in which philanthropy’s somehow on the hook for everything derail vital action.
If funders want to get a handle on the raft of crises they’re facing, here are three reasons why they shouldn’t let worries about covering for a retreating public sector trip them up.
There are immediate human costs when funders wait to ramp up
The human toll of Trump’s cuts is especially tragic in the global health and development arena, where, as Gates has emphasized, millions will now needlessly die. But the damage will extend to pretty much every philanthropic priority you can think of, including education, health and economic mobility right here in the U.S.
We’re seeing it now with funding for public media: There’s a limited window in which the people and infrastructure formerly reliant on government funding can be sustained. After that, rebuilding what’s been lost gets far more expensive — maybe prohibitively so for private funders who could have thrown a lifeline to vital projects while they were still viable.
Then there’s the less tangible side of civic sector investment: protecting rights, opposing inequity and keeping democracy alive. The case for urgency there is clearer now than at any other time so far this millennium, and in those areas, it’s often less about covering for government inaction than opposing a government actively making things worse.
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Government cuts aren’t irreversible
This administration has torn the veil off the idea that patterns of federal funding are set in stone. USAID support, Department of Education funding, PBS and NPR backing — all of these are historically contingent, and right now, we’re in a historical moment in which they’re being stripped away.
But this historical moment may just be that, a moment. Four years from now, the situation in Washington, D.C., could be very different. Trump’s clear-cutting may be changing federal funding in some lasting ways, but the cyclical nature of U.S. politics is such that much of what’s been lost may yet be reinstated.
What that means for philanthropy is that filling key needs now won’t automatically conjure up a never-ending dystopian future in which private funders are the only means of succor for the world’s less fortunate. On the contrary: by stepping in and building new things, philanthropy can make a better case for government investment down the road.
That said, the inexorable expansion of the national debt and rising entitlement costs for programs like Medicare will place increasing strain on the federal budget in the years ahead. And that might limit what’s possible even under more favorable political circumstances. As IP Editor-in-Chief David Callahan wrote recently, we’re probably looking at a future of diminishing resources for public services, a future that only a radical renaissance of generosity, higher local taxes, or reversing federal tax cuts could avert.
On the other hand, politicians of all ideological stripes tend to be more freehanded with taxpayer dollars than private donors are with their own. Just look at the “big, beautiful bill,” which heaped in hundreds of billions in additional security and defense spending alongside tax cuts for the well-off that will balloon the national debt.
Discouraging philanthropy from thinking bigger has a long-term opportunity cost
To be fair to Bill Gates, he’s doing far more than most considering his unique role in the philanthropic ecosystem. For Gates, with his $77 billion, world-bestriding foundation, it does kind of make sense to worry about being seen as a substitute for government.
It’s much harder for other funders to make a similar case. Far from spending down hundreds of billions in 20 years, as Gates hopes to do, most foundations have trouble climbing beyond 5% payout, while most mega-rich donors have made scant to no progress on giving away their fortunes — assuming they’ve taken the Giving Pledge at all.
As we plunge further into a new Gilded Age, the examples that major funders set now, at a moment of distinctive crisis and transition, will reverberate over the next 50 to 100 years. We’ve seen this before: Philanthropic giving stemming from the old Gilded Age helped set the course not only for how the private funding world worked through the rest of the 20th century, but also for a wide range of approaches later taken up by the public sector — from Carnegie’s funding of libraries and support for public media to backing for science research and global development.
It may be hard to grasp right now, but the stage is being set for philanthropy circa 2050 and beyond. The sheer magnitude of the fortunes that’ll make their way to the social sector in the years ahead has the potential to help make up for this era’s missteps — but only if funders hold their ground, think bigger, and set that precedent early, rather than letting fear and inertia constrain them to business as usual, and ultimately to obscurity.
