Evolving Foundation Responses to a Sector in Crisis

Overview

Amid significant shifts in the national context since January 2025, U.S.-based foundations and nonprofits have been reassessing how to best pursue their missions. Recent CEP data has revealed that nonprofit CEOs describe facing both increased demand for services and significant cuts to their funding — and both foundation and nonprofit leaders report believing that foundations have an even larger role to play in supporting nonprofits during this time.

As part of CEP's ongoing series about the response of foundations and nonprofits to the current context — which we define as the series of events led by the U.S. federal government's actions beginning in early 2025, including budget decisions, legislation, and executive orders — this report provides updated data on how foundations are adapting their strategies and practices and insights into nonprofit experiences that can inform foundations' next steps.

Foundation leaders, if you’re interested in sharing a brief summary of this research with your board, please see the accompanying Board Book Insert.

Surveys conducted in May 2026 sought to answer the following:

How are foundations supporting nonprofits and communities?

Have foundation grantmaking practices changed within the current context?

Have foundation funders been effective in supporting nonprofit grantees?

How do foundations and nonprofits see the impact of the political context on their futures?

This study includes data from:

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nonprofit leader survey responses

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foundation leader survey responses

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Finding 1

How Foundations Are Responding to the Current Context

Foundations are making many changes in response to the current context, but barriers — including risk aversion — are contributing to their sense they have not been very effective in response.

93%

of responding foundation CEOs report at least one change in their approach to their foundation’s work.

Most Common Foundation Strategy Changes Reported by CEOs in Response to the Current Context (N=180-182)

Note: Percentages add up to more than 100 because respondents could select all that apply.

48%

of foundation CEOs report their organization has increased its engagement in policy or advocacy.

Nearly two-thirds of foundation CEOs have increased funding in at least one issue area, but only a third of independent foundation respondents report higher payout in the current fiscal year compared to previous years.

Despite reporting a range of strategic changes, few foundation CEOs assess their response to the current context as very effective.

Foundation CEOs’ Ratings of How Effective Their Own Foundation Has Been in Responding Versus Effectiveness of Foundations Overall (N=179-180)

Note: Percentages do not add up to 100 because of rounding.

53%

of foundation CEOs cite some form of risk aversion as a barrier to the way their foundation has responded.

"Everyone wants to 'wait and see' what will happen, rather than invest and support the most urgent needs now."

– Nonprofit CEO

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Finding 2

Support Beyond the Grant

Most foundations are providing support beyond the grant to the nonprofits they fund, but that support is frequently mismatched to nonprofits’ needs.

90%

of foundation CEOs indicate their organizations are providing nonprofits with at least some form of support beyond the grant to help them navigate the current context.

When nonprofit CEOs have received some kind of support beyond the grant from their foundation funders, they report mixed opinions as to its usefulness.

Nonprofit CEOs on the Usefulness of Support Beyond the Grant Received (N=153-323)

Note: Percentages do not add up to 100 because of rounding.

60%

of nonprofit CEOs report that they would find help with fundraising strategy and donor development useful.

Support related to artificial intelligence and digital tools stands out as one of the largest mismatches between what foundations provide and what nonprofits say would be most useful.

Beyond-the-Grant Support That Foundations Are Providing Versus Beyond-the-Grant Support Nonprofits Would Find Most Useful (N=176-326)

Note: Percentages add up to more than 100 because respondents could select all that apply.

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Finding 3

Communication Between Nonprofits and Funders

Honest communication between nonprofits and funders is a challenge, with nonprofits holding back in ways that may limit funders’ ability to know what is most needed.

A minority of nonprofit CEOs believe they can be completely honest when communicating with their foundation funders about challenges their organization is facing in the current context.

Nonprofit CEO Beliefs About Honesty in Communications With Funders About Organizational Challenges (N=328)

Note: Percentages do not add up to 100 because of rounding.

Nonprofit CEOs who believe they need to be less than completely honest with their funders most commonly cite either fear of their funding being reduced or limited opportunities for honest communication.

Nonprofits CEOs’ Reported Reasons for Less Than Completely Honest Communication With Foundation Funders (N=191)

Note: Percentages add up to more than 100 because respondents could select all that apply.

Nonprofit CEOs who believe they can communicate completely honestly are more likely to rate their foundation funders as having been more effective in responding to the current context.

One nonprofit CEO says, “Tell us how — or if — your priorities are changing, given the current context,” while another wishes their funders would, "Let us know where you are, what you're up to/interested in. What you're planning. Be CLEAR about intent and resources available.”

Conclusion

The challenges presented by the current context are evolving, and almost all foundations and nonprofits are changing elements of their strategy. However, foundation CEOs do not appear to feel that their response has been adequate. Few rate themselves as very effective, which may partly be a result of the sheer difficulty of the context. Our data suggest opportunities for foundations to better align their beyond-the-grant support with nonprofits’ reported needs. This is a time of challenge for the nonprofit sector and, by extension, for many people and communities affected by the work of nonprofits. The philanthropic response is evolving, and we hope these data help provoke reflection about what approaches might be most useful now.

If this report has been helpful to you, please consider supporting CEP’s research. Reach out to us for more information. Thank you.

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Research Funded By

Authors: Elisha Smith Arrillaga, Ph.D.; Ellie Buteau, Ph.D.; and Dani Sosa

Project Team: Elisha Smith Arrillaga, Ph.D.; Ellie Buteau, Ph.D.; Therese Azevedo; Caroline Gasparini; Christina Im; and Dani Sosa

CEP is a nonpartisan, tax-exempt organization under section 501(c)(3) of the Internal Revenue Code. We do not endorse, support, or oppose any political party or candidate for public office. Our research, programs, and public communications are designed to advance our mission and serve the public interest without regard to partisan considerations.

Copies of the survey instruments can be found here and here.

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