During a February 4 appearance on “The View,” Bill Gates warned about the potentially disastrous consequences of Elon Musk’s moves to shut down the United States Agency for International Development (USAID), the entity that has provided billions in overseas humanitarian assistance since its founding in 1961. President Donald Trump and Musk have both alleged USAID is rife with waste and abuse and have held up examples of congressionally authorized spending to prove their points.
Gates highlighted the humanitarian stakes of Trump’s disruption, and the degree to which the agency’s work intersects with that of private global development grantmakers, including his own. “My foundation partners with USAID on nutrition and getting vaccines out, and, you know, there are incredible people [there],” Gates said. “Hopefully, we’ll get some of that work back in shape. In fact, if we don’t, you could have literally millions of deaths.”
I suspect that most readers know by now that what Gates hoped for has not come to pass.
On February 7, Trump — roughly a week after implementing a 90-day post-inauguration freeze on domestic and foreign aid programs — took to his social media platform Truth Social to say USAID “CORRUPTION IS AT LEVELS RARELY SEEN BEFORE. CLOSE IT DOWN!” The same day, however, U.S. District Judge Carl Nichols temporarily allowed roughly 2,700 of the approximately 10,000 USAID employees to return to work and reinstated some 500 employees who had been furloughed. His order will remain in effect until February 14.
Trump has made it clear he isn’t stopping with USAID. On February 7, he called for a review of federal funding to nongovernmental organizations more broadly and a halt on spending to groups he believes “undermine the national interest.”
Nonprofits at home and NGOs abroad are bracing for the worst. Also on Feb. 7, the National Council of Nonprofits hosted a webinar exploring how recent executive orders covering issues like diversity, equity and inclusion, immigration, and the environment may “affect nonprofits directly or indirectly.” It’s a must-see for any nonprofit that receives federal dollars.
The flurry of activity has raised familiar questions about how — and if — philanthropy should respond to an administration intent on cutting and potentially eliminating the use of federal funds by nonprofits. Given this fraught and fast-moving backdrop, here are three takeaways from what has arguably been one of the most disruptive weeks for philanthropy since 2020.
USAID’s closure would hamstring foundations’ global development work
Gates’ comments on “The View” were a reminder of just how extensively U.S. foundations have tapped USAID’s networks and infrastructure to support grantmaking for global development, health and democracy. For better or worse, the agency has been a crucial fixture on the global development funding stage for years. Rather than reinvent the wheel, foundations have realized they could advance their global grantmaking priorities by working with a 64-year-old USAID that had over 10,000 staffers working closely with locally led NGOs around the world. Attuned to this value proposition, last year, the Council on Foundations developed a members-only resource on how foundations can partner with USAID to advance locally led development.
Recent examples of foundation partnerships and advocacy around USAID are plentiful. In 2023, 15 grantmakers joined government donors in endorsing a USAID statement calling on funders to allocate more resources to local actors leading development, humanitarian and peacebuilding programs. Funders that endorsed the statement included the Packard, MacArthur, McKnight, Ford and Hewlett foundations.
That same year, the Ford and Rockefeller foundations pledged support for USAID’s “Democracy Delivers” event at the 2023 U.N. General Assembly, aimed at assisting countries experiencing “promising democratic openings.” Ford committed $20 million over four years to the effort.
2024 was an especially busy year for foundations seeking to leverage USAID’s global reach.
In March, Ford partnered with USAID and the CARE Fund to direct $4.8 million over two years to help care workers in five countries advocate for stronger wages, safer working conditions and gender equality. That same month, the Skoll Foundation launched a partnership with USAID to advance locally led development and expand coordination to advance global health, address climate issues and promote gender equality; and the Conrad N. Hilton Foundation established what it called “a framework for cooperation” with USAID to advance and expand locally led development.
In September, Ford and then-USAID Administrator Samantha Power convened a coalition of organizations and announced over $517 million in funding to support countries experiencing democratic openings. According to the press release I retrieved from the Wayback Machine — USAID-hosted articles were taken offline under Trump — other funders that made commitments included the Rockefeller Brothers Fund and the Rockefeller, Skoll and Tinker foundations. Ford specifically pledged $8 million to support democratic opportunity, including in Guatemala.
The fate of these initiatives remains uncertain. If there’s a faint silver lining, it’s that if USAID is shuttered or severely contracted, at least these foundations still have the benefit of familiarity with the agency’s network and are reasonably well positioned to channel emergency funding to affected organizations. As far as silver linings go, it isn’t much — but that’s how things stand at the moment.
(Note: I reached out to five foundations that have partnered with USAID for comment. Three declined to comment, and two did not respond to my query.)
COVID offers a playbook for funders navigating the current climate
In the January 28 essay “Steadfast in our Commitment,” Council on Foundations President and CEO Kathleen Enright — without mentioning USAID or the Trump administration specifically — laid out a playbook to help funders respond to “the gravity of this moment.”
“As in any time of crisis,” Enright wrote, “there are some things that philanthropy can and should do now: We can increase our giving when and where need is greatest; we can accelerate grant payments to nonprofits as their government grants are paused; we can extend credit or loan funds when appropriate; we can reduce restrictions to enable partners to use our dollars flexibly.”
Enright’s perspective may give some readers a feeling of déjà vu, as her to-do list mirrors the council’s call to action during the pandemic.
“We see a parallel opportunity for philanthropy to again spearhead support through multi-year, general operating funding to organizations, reducing or simplifying reporting need and a willingness to be flexible with extension or necessary shifts,” said Tanya Gulliver-Garcia, the director of education services at the Center for Disaster Philanthropy, which published research exploring philanthropy’s response to the pandemic. “If government funding is withdrawn, nonprofit organizations will need increased support to shore up operations and support communities.”
I reached out to Gulliver-Garcia to see if philanthropy’s response to the pandemic — which involved, in many cases, laudable though not necessarily lasting increases in foundation payouts and individual giving — could provide any insights into how the sector may respond to a world without USAID and with a sharp contraction in federal dollars flowing to nonprofits.
Many grantmakers adopted the “‘MYGOD’ philosophy — multi-year, general operating dollars” during the pandemic, Gulliver-Garcia said. “Some also provided grant extensions, reduced reporting requirements, and became more flexible with grant intentions.” In addition, funders recognized that “people of lower incomes and other marginalized communities were most affected by COVID-19 and required the greatest philanthropic support.” It isn’t a stretch to imagine a similar dynamic playing out if Trump succeeds in gutting USAID and cutting funding for domestic nonprofits.
However, CDP’s research found that despite philanthropy’s recognition of COVID-19’s disproportionate impact on underserved communities, “pledges did not always become actual donations to charitable causes,” Gulliver-Garcia said.
There are at least two factors that may have contributed to funders’ underperformance. First, as Gulliver-Garcia noted, grantmakers could find solace in knowing that “the economic measures put into place by the U.S. government went a long way to helping many residents, especially the most marginalized.” Now, the inverse is true — the government is now being fed into what Musk has picturesquely referred to (in the case of USAID) as the “wood-chipper,” so rather than complement federal support, philanthropy has to replace it. Huge difference.
I’m also of the mind that grantmaking leaders who didn’t follow through on pandemic-era pledges weren’t heartless so much as cognizant that, assuming they didn’t bring in more contributions, eclipsing the 5% payout rule would imperil their ability to support future grantees. That consideration factored into trustees’ calculus then, and you can be sure it’s factoring into their calculus now.
A robust philanthropic response would increase megadonors’ civic influence
Of course, the philanthrosphere also includes centibillionaires and private foundations helmed by living megadonors that, thanks to an ongoing infusion of contributions, frequently blow past the 5% payout threshold.
Consider Michael Bloomberg. In late January, he announced that Bloomberg Philanthropies and other U.S. climate funders would help cover the U.S. contribution to the United Nations Framework Convention on Climate Change (UNFCCC) budget, filling a gap left by Trump’s decision to withdraw from the Paris climate agreement for a second time.
While Bloomberg Philanthropies did not say how much it contributed, Reuters reported that the U.S. paid the UNFCCC $7.4 million for 2024. Given Bloomberg’s net worth of $105 billion, a payment of that amount would constitute something smaller than a rounding error. In contrast, USAID managed more than $40 billion in combined appropriations in the fiscal year 2023 alone — and that’s not counting the millions in potential cuts to nonprofits unaffiliated with USAID should Trump continue to purge the federal ledger, as his DOGE office has promised to do.
In other words, Bloomberg’s approach with the U.N. — involving millions, not billions — won’t cover the bill. Nor, for that matter, might it be in the long-term best interests of the body politic.
For all of mega-givers’ parsimony relative to their net worth, they nonetheless have a large and ever-growing role in a society where 2% of a multibillion-dollar fortune earmarked for charity eclipses the annual grantmaking of most legacy foundations. While having the unelected uber-rich ride to the rescue is preferable to thousands of nonprofits laying off staff or cutting programs, it will only further expand the influence of billionaires in the civic sphere and play into the hands of a conservative movement that rode a populist wave into power and is deeply committed to “starving the federal beast.“
The only reasonable alternative is for Congress to execute its constitutionally mandated role and defend federal funding being used by nonprofits and NGOs, which are more nimble and area specific than the government has personnel to manage. But if the courts ultimately side with the administration, philanthropic funders will have some serious and potentially existential soul-searching to do.
