We fund what we value

March 17, 2017

The just-released Trump budget, titled “America First: A Budget Blueprint to Make America Great Again,” proposes a $54 billion increase in defense spending and massive cuts elsewhere that will pose huge challenges to philanthropy.

Leave aside the politics (please) and consider what this means for donors. The budget calls for the complete defunding of four cultural agencies — the National Endowment for the Arts, the National Endowment for the Humanities, the Institute of Museum and Library Services, and the Corporation for Public Broadcasting. Eliminating the NEA cuts $148 million; the NEH, $148 million; the IMLS, $230 million; and the CPB, $445 million. From the NEA alone, $47 million in state grants leveraged an additional $368 million in state funding. That’s roughly $1 billion plus $368 million from the states.

Science and basic research take a massive hit with the National Institutes of Health losing almost $6 billion of its $30 billion budget. It’s important to remember that 80% of NIH funding goes to outside researchers in universities and labs across the country – major recipients of foundation and individual donations.

Cuts to the Environmental Protection Agency have garnered headlines with nearly a third of their budget on the cutting room floor, but in practice, this includes the outright elimination of a program to clean up the Chesapeake Bay and half the funding for the EPA’s Office of Research and Development. Funding for climate research is effectively gone.

Proposed budgets are just that – proposals – and they never survive intact, but what if even half these cuts endure? It still means billions of dollars in cuts to everything from local public radio stations, to rural arts programs, to university research programs studying cancer, to efforts to restore the Chesapeake Bay and much, much more. These cuts directly affect big ideas and communities alike. The cuts directly affect programs funded by current philanthropy.

Philanthropy often relies on federal and state grants to leverage funding. A gift from a foundation allows a non-profit to undertake a scoping study, which unlocks a state grant for design development, which unlocks a federal grant to build a library. Or a donor funds a university professor who then seeks government funding to cure cancer, then the donor funds a research grant for the post-doctoral fellow. Government and donors work together to multiply their impact.

Philanthropy works together with federal agencies to make the world a better place, but philanthropy cannot entirely fill a gap this big on its own. If the funding cuts survive, even in part, then donors have difficult choices ahead – to fund deeply in one area or to fund broadly in hopes of staving off the wolf at the door. Yet the proposed cuts are so deep that even significant increases in philanthropy will result in losses. The losses will be financial and cultural and medical and environmental, but the losses will also mean job losses and non-profits shutting down.

We fund what we value, but the choices ahead will test donors’ values in profound ways.

— Chris Massi, Senior Consultant

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