For decades, American generosity was a constant. Through recessions, tax rewrites, and political storms, giving stayed near 2 percent of GDP. Even after shocks like the Great Recession or COVID-19, donations rebounded quickly. Philanthropy was resilient.
That resilience is faltering. Recent years have brought not just inflation-adjusted declines but real drops in dollars. Higher education alone saw donations fall 2.5 percent in fiscal year 2023 to $58 billion — and that’s before accounting for inflation, which pushes the real decline to 5 percent. Individual giving to universities plummeted over 10 percent, with alumni donations dropping 11.1 percent. The first quarter of 2024 showed further deterioration: donor numbers fell 8.2 percent even as average gift sizes increased, suggesting a troubling concentration of support among fewer givers.
The situation has grown more dire as government funding also retreats. Universities like Johns Hopkins, which relied on federal funds for 40 percent of revenue, announced 2,200 layoffs after losing hundreds of millions in research grants. Harvard faces a $2.2 billion funding freeze. Columbia lost $400 million. These institutions, once insulated by diverse funding streams, now face a double blow: private donors walking away while public support evaporates.
Conventional explanations — tighter budgets, donor fatigue, tax changes — don’t fully fit the data. The Tax Cuts and Jobs Act of 2017 reduced charitable giving incentives for middle-income donors by nearly doubling the standard deduction, but wealthy donors actually increased their giving. Something deeper is happening: high-capacity donors are quietly leaving.
They are not less generous; they are less trusting. They see institutions drifting from mission into ideology, substituting signaling for substance. Many still give — just not to the same organizations. The money hasn’t vanished; the confidence has.
Philanthropy depends on trust, and trust depends on shared purpose. When charities trade mission for posture, donors sense the shift and act accordingly. Philanthropy isn’t a tax. It’s a voluntary partnership. Treat it as an entitlement, and it evaporates.
From Partnership to Entitlement
Arthur Brooks’s Who Really Cares showed that Americans who emphasize faith, family, and personal responsibility give more — not just to churches, but across all causes. They still form the backbone of American philanthropy. Yet many of these same donors no longer trust the institutions that solicit them. Increasingly, those institutions treat the very people who sustained them as moral liabilities — too religious, too traditional, or too independent for the new orthodoxy.
Nonprofits once treated a donor’s gift as a privilege; now many treat it as a right. I watched a respected foundation leader tell a roomful of fundraisers that her organization’s definition of “Teachers of the Year” might differ from theirs. The temperature dropped ten degrees. Her honesty — that donors have their own standards — was received as betrayal.
That reaction captured a broader delusion: that moral alignment entitles one to other people’s money. The right to decline a grant is now treated as hostility. Yet the right to say “no” is as sacred as the right to say “yes.” When nonprofits punish or shame donors for setting conditions, giving ceases to be voluntary. It becomes a social tax.
Operationally, entitlement corrodes accountability. When money is presumed, results stop mattering. The hardest-working donors — entrepreneurs, investors, business owners — operate in worlds of measurement and trade-offs. When they see organizations driven by emotion rather than execution, they don’t argue. They redirect.
The Culture Gap Between Donors and Nonprofits
The gulf between donor expectations and nonprofit culture is widening. Surveys show that most fundraising professionals identify on the political left, while most high-capacity donors lean right or center-right. That imbalance alone isn’t fatal — ideological diversity could be an asset — but only if mutual respect survives. Increasingly, it doesn’t.
Donors prize autonomy and accountability; fundraisers prize consensus and moral affirmation. Donors seek clarity and outcomes; fundraisers prize language and alignment. Donors speak in balance sheets; fundraisers speak in virtue. When those grammars collide, the partnership breaks down.
A donor who views giving as a contract for measurable results meets a nonprofit that treats giving as proof of moral commitment. Each side leaves frustrated: one feeling manipulated, the other feeling judged. In the end, the donor walks — not out of cynicism, but because the relationship has become incoherent.
When Language Replaces Results
Language once clarified missions; now it polices them. In parts of the nonprofit world, words once neutral — “target audience” (in marketing), “bullet point” (as in lists), even “merit” — are recast as “violent” or “inequitable.” The point isn’t compassion; it’s conformity.
Donors hear this shift and draw the obvious conclusion: if every term is a potential offense, then every decision is a potential crime. Clarity dies. Staff spend more time navigating taboos than delivering outcomes. A culture that fears plain speech soon fears plain facts — and organizations that fear facts stop producing results.
Many nonprofit staff come from what might be called the helping professions — people driven by empathy. That impulse is admirable. But when the work becomes a mirror for personal identity, compassion slides into fragility. The job stops being about service and starts being about self-expression. Disagreement feels unsafe; metrics feel “cold.” The safest conversation is about feelings.
Business-minded donors recognize the pattern instantly. They built their success by confronting discomfort, not avoiding it. They don’t need ideological alignment; they need honesty, efficiency, and proof that results matter more than rhetoric. When they sense an organization prizes internal harmony over external impact, they quietly withdraw.
The Cult of Novelty
Another form of drift is what might be called cause inflation — a constant invention of ever-narrower identities and issues. Each new niche comes with its own vocabulary, conferences, and fundraising pitches, yet the measurable outcomes grow thinner. Donors see diffusion, not progress.
They’ve watched this movie before. Moral passion untethered from structure ends badly. History is full of revolutions that began with righteous energy and ended in bureaucracy or chaos. Philanthropy isn’t exempt. Symbolism without systems always decays.
What donors want is boring: effectiveness. They will fund the unglamorous organization that delivers over the fashionable one that performs for applause.
The Compounding Crisis: When Public and Private Support Collapse Together
The withdrawal of private donors might be manageable if public support remained stable. But universities and nonprofits now face a perfect storm: as individual donors retreat, government funding is vanishing at unprecedented rates. The NIH alone has frozen billions in research grants, forcing institutions like Northwestern to cut budgets by 10 percent and Columbia’s medical school to freeze hiring entirely.
This isn’t merely belt-tightening. When Johns Hopkins loses 40 percent of its revenue — $4 billion in federal funds — and simultaneously sees private donations decline, the result is existential. The 2,200 layoffs represent not just jobs but decades of institutional knowledge walking out the door. Research on everything from cancer treatments to climate solutions grinds to a halt.
The irony is bitter: institutions that alienated their traditional donor base in pursuit of ideological purity now find themselves doubly vulnerable. They cannot replace lost federal funds with private philanthropy because they’ve already burned those bridges. Wealthy alumni who might have stepped up during past crises now direct their giving elsewhere — to institutions that still respect donor intent and focus on results over rhetoric.
Rebuilding Credibility
The decline in giving doesn’t signal a loss of national generosity; it signals a loss of faith in institutions. The most reliable givers — religious, family-oriented, entrepreneurial Americans — haven’t grown stingy. They’ve grown tired of being lectured by the institutions their money built.
The path forward isn’t a communications campaign or another “equity initiative.” It’s a return to professionalism:
- Recenter on mission. Every program, meeting, and memo should answer one question: how does this serve beneficiaries?
- Honor donor autonomy. Educate, don’t coerce. Earn trust; don’t demand it.
- Clarify results. Publish cost-per-outcome data. Be transparent about failures.
- Use language that clarifies. If a term truly wounds, retire it. If it merely offends fashion, keep it.
- Reward competence. Hire for alignment and skill, not ideological fervor.
Philanthropy’s health has always rested on three unwritten agreements: nonprofits will keep their promises; donors will give freely because they believe in results; and both will confront failure instead of hiding it.
The exit of America’s most capable donors isn’t proof that greed is winning. It’s proof that too many nonprofits stopped listening. The answer is not moral outrage but renewed discipline — less virtue signaling, more virtue practiced.
Philanthropy doesn’t need to be reinvented. It needs to remember what made it exceptional: voluntary partnership, measurable outcomes, and respect for the people who make generosity possible.
If the sector rediscovers those habits, the tide that held for generations will rise again. American generosity never disappeared. It’s waiting, as donors always do, for a reason to believe.
