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We Fund What We Value

March 17, 2017

Axe-hatchetThe just-released Trump budget, "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 for 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 percent 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 its budget in jeopardy; 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 zeroed out.

Proposed budgets are just that — proposals — and they never survive intact, but what if even half these cuts are enacted? It still translates into billions of dollars in cuts to everything from local public radio stations to rural arts programs to university research programs. The cuts would affect big cities and small towns alike. And they would directly affect programs funded by philanthropy.

Philanthropy often relies on federal and state grants to leverage its investments. A grant from a foundation makes it possible, for instance, for a nonprofit to undertake a library scoping study, which can unlock a state grant to underwrite the building's design, which can lead to a federal grant toward construction of the building. Or a donor might fund an endowed chair for a university professor, who then seeks government funding to support his or her research on a cure for cancer. Under our system, government, foundations, and individual donors work together to magnify the impact of their respective dollars.

But while philanthropy is used to working with federal and state agencies, it cannot fill the gaps that would be created by the Trump budget on its own. If the funding cuts proposed by the White House survive, foundations and donors will face many difficult choices in the months and years to come. Having to decide between funding deeply in one area or funding broadly across many areas will be a constant aggravation, at best. And because the proposed cuts are so deep, even a significant increase foundation and individual donor giving will not be enough to keep the wolf from the door. The resulting harm will be financial and cultural, medical and environmental, with jobs lost and nonprofits forced to shut down.

Headshot_Chris_MassiWe fund what we value, and the choices ahead are likely to test our values in profound ways.

Chris Massi is a senior consultant at Graham-Pelton, a global fundraising and nonprofit management consulting firm. A version of this post originally appeared on the Graham-Pelton website.

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