(VOR News) – The John D. and Catherine T. MacArthur Foundation has decided to increase its contributions over the next two years in response to what it deems a “crisis” caused by the Trump administration’s suspension of federal funding and hindrance of international help.

John Palfrey, president of the MacArthur Foundation, communicated to The Associated Press on Wednesday that “this represents a substantial crisis for our sector, and it is a time when those able to contribute further should do so.”

The hike was announced by Palfrey in a blog post on the MacArthur Foundation’s website. He asserted in the essay, “The reduction of funding from federal programs has rendered budgets untenable across multiple sectors, leading to hardship for individuals and communities both nationally and globally.”

Palfrey said that the foundation has decided to increase its donations from the IRS-mandated minimum of 5% of its endowment to a minimum of 6% over the next two years. The foundation disclosed that in 2023, it allocated over $400 million yearly and held assets valued at approximately $8.7 billion.

Palfrey projected additional spending of 150 million dollars over the next two years. President Donald Trump directed the Office of Management and Budget to temporarily stop all federal contracts and grants during his early days in office.

Moreover, he discontinued financial support to other governments. The president indicated a wish to ascertain if all funds aligned with his objectives. Numerous industries have been significantly impacted by the activities.

In 2023, the United States emerged as the preeminent worldwide donor of humanitarian assistance, dedicating a total of $68 billion to international relief initiatives.

The Urban Institute’s analysis of tax returns filed by nonprofit organisations indicated that in 2021, these entities claimed to have received $267 billion in government aid.

In contrast, data from GivingUSA reveals that in 2023, the MacArthur Foundation disbursed $103 billion in donations.

The MacArthur Foundation was encouraged by Palfrey to improve its philanthropy.

He asserts that “Philanthropy should function differently than it has traditionally,” suggesting that historically, we have merely increased funding during stock market booms and decreased contributions during slumps.

In reaction to the actions of the Trump administration, the Freedom Together MacArthur Foundation, previously referred to as the JPB Foundation, has announced its plan to elevate the proportion of its endowment designated for grants to 10 percent.

Deepak Bhargava, the leader of the organisation, stated in a letter that the current situation recalled the AIDS pandemic. Activists of that period elevated the status of LGBTQ+ individuals in society and urged the government to address the issue.

The operation created a pathway from the void. “This has transpired repeatedly throughout the history of the United States,” Bhargava claimed. The current level of anxiety is disconcerting, and I am amazed that so few organisations and leaders are addressing the issue. Nonetheless, my own experience and our collective past illustrate that courage is infectious, conveying an uplifting message.

The most distinguished program financed by the Chicago-based MacArthur Foundation is the “genius” fellowship. This fellowship acknowledges outstanding individuals in many fields and awards them a $800,000 stipend.

The MacArthur Foundation, alongside its lasting connections to Chicago and Nigeria, is dedicated to tackling challenges related to journalism, criminal justice, and the environment.

Palfrey contends that foundations effectively discerned strategies to enhance financial assistance for their grantees during the COVID-19 pandemic, and they may reproduce this methodology presently.

Bonds were issued by eight foundations, including MacArthur.

These MacArthur Foundations efficiently utilised their endowments by issuing bonds to enable supplementary short-term payments.

Palfrey underlined the necessity of adopting an alternative method in 2025. Nevertheless, it seems to me that the rationale remains coherent.

Elisha Smith Arrillaga, vice president of research at The Centre for Effective Philanthropy, contends that the executive orders implemented by the Obama administration have aroused considerable concern and ambiguity for philanthropic organizations.

She asserted, “Nonprofits fundamentally function as a conduit for all Americans.” I strongly encourage individuals and groups involved in community participation across the United States to support the nonprofit entities they approve, especially in light of current conditions.

SOURCE: AP