If There Ever Was a Time to Deeply Understand the Money That Funds Us, It’s Now
The work nonprofit consultants do is important. And meaningful. And valuable. To such an extent that we spend a considerable amount of time thinking and discussing the value we bring to nonprofit organizations and promoting value-based pricing to ensure our expertise is compensated appropriately, especially in a sector that is always seeking ways to stretch a dollar. It is our livelihood, and we have to make important decisions about pricing!
A common frustration I see discussed in group chats and webinars is that nonprofits don’t always value investments in our expertise and services, leading us to discuss the importance of valuing our time, expertise, and labor. I am here for all those conversations, but they often hover only at the level of transactions between consultants and nonprofits.
What we talk much less about is the larger ecosystem of money that makes those transactions possible (or not possible) in the first place. No matter how valuable we are to our clients, we are still playing in a game controlled by money and power none of us - consultants or nonprofits - can reach easily.
If we are failing to name and address who sets those rules, then we are ignoring the most powerful force shaping nonprofit budgets and our own livelihoods. So, let’s name and explore where the dollars that pay us come from…and what is happening to those dollars right now.
The Basics
The money is changing. Who has it, who is giving it, and where it goes.
Recent data shows there are around 1.8 million nonprofit organizations in the United States, with about 1.5 million of those being 501c3 organizations. 76% of those organizations have annual revenues less than $100,000, and 89% have revenues less than $500,000 each year. Most of those organizations rely on a combination of fundraising sources to support their budgets.
For decades, individual donors, the broad base of people giving $10, $100, or $1,000 gifts, have accounted for the majority of U.S. charitable giving. In 2013, individuals gave about 73% of all donations. By 2023, that number had fallen to 67%. Adjusted for inflation, individual giving declined by 2.4% in 2023 alone, while the number of people giving continues to fall year after year. The steepest drop has been among the smallest-dollar donors, whose gifts once represented the most democratic and community-driven segment of the giving landscape.
At the same time, giving from foundations and DAFs has grown. In 1991, private foundations accounted for about 5% of total charitable giving; today, they account for 15%. DAFs have followed a similar trajectory, rising from 4% in 2007 to 15% today. Taken together, these two sources now represent nearly a third of all charitable dollars. Researchers have estimated that about $300 billion has been diverted from working charities into these vehicles, where it often remains idle.
Meanwhile, billionaire wealth continues to surge, even as the middle class shrinks. A handful of mega-donors now control larger and larger portions of the charitable pie, meaning their priorities increasingly set the agenda for what gets funded. While some, like MacKenzie Scott, have modeled rapid, unrestricted giving, they are exceptions. Most high-wealth philanthropy remains tightly controlled, opaque, and aligned with narrow interests.
In 1987, Forbes published its first billionaires list. There were 50 billionaires in the US. The Forbes 2024 list shows that the list has grown to 813. US billionaires make up 30% of billionaires worldwide, holding around $6 trillion.
For consultants, this matters. When everyday donors retreat, nonprofits lose their broadest base of community support. When a smaller group of wealthy individuals and institutions flood generosity avenues, the priorities of the few shape the budgets of the many. And when those priorities shift, or when funders decide to pause or redirect their giving, our clients feel it first. And then so do we.
The Trump Foundation: A Case Study in Power Without Oversight
To see what happens when money and power concentrate without accountability, we need only look at the story of the Donald J. Trump Foundation. Founded in 1988, the foundation looked on the surface like many other private family foundations. In practice, it was funded less by Donald Trump himself than by outside donors. In total, Trump contributed about $5.5 million of his own money, most of it before 2008, while outside donors provided roughly $9.3 million after that year.
Despite this donor base, the foundation operated with almost no real oversight. The board, which consisted entirely of Trump and his family members, had not met since 1999. When the New York Attorney General investigated in 2018, the findings were damning: the foundation had engaged in “a shocking pattern of illegality,” including using charitable funds to settle lawsuits, making political donations, and even buying personal items. By December 2018, the foundation was forced to dissolve under judicial supervision. The roughly $1.8 million remaining in its accounts was distributed to a list of court-approved charities, and Trump himself was ordered to pay an additional $2 million in damages, divided among eight organizations such as the United Negro College Fund and the U.S. Holocaust Memorial Museum.
The point here is not only that the Trump Foundation was corrupt. It is that when a small circle of people holds concentrated power over charitable resources, the absence of transparency and oversight produces predictable results: money flows to serve personal, political, or ideological ends rather than the public good. The foundation was forced to dissolve after Donald Trump had been in office for almost two years.
Changes to Federal Grantmaking: The Foundation Model at Scale
Fast forward to today, and we see the same dynamics reappearing on a much larger stage. Since taking office, Donald Trump has signed twenty-eight executive orders targeting federal funding streams that typically funnel to nonprofit organizations. Of those, ten are explicitly restrictive, cutting off money that would otherwise have been available for nonprofits, schools, service providers, or media organizations. These include measures halting funds to jurisdictions with cashless bail policies, blocking support for schools with COVID-19 vaccine mandates, stripping resources from entities engaged in diversity, equity, and inclusion initiatives, eliminating funding for gender-affirming care, and restricting federal dollars tied to immigrant services or so-called “biased” media. Taken together, these orders don’t just redirect priorities; they actively choke off funding lines that community-based organizations have relied on, replacing stability with uncertainty and embedding ideology into the heart of federal grantmaking.
On August 7, 2025, Donald Trump signed an executive order dramatically reshaping federal grantmaking. The order placed sweeping authority in the hands of political appointees, giving them control over the allocation of billions of taxpayer dollars. The language of the order makes clear that awards can be terminated midstream, entire categories of work can be disqualified for ideological reasons, and new rules will embed this centralized authority into law.
The effects were immediate. The Department of Homeland Security issued new rules barring grantees from serving undocumented immigrants or engaging in diversity, equity, and inclusion activities. Millions in funding for LGBTQ+ and HIV service organizations were suspended, only to be restored after a federal court intervened. Nonprofit leaders across the country have voiced concern that this order represents not just a policy shift but an erosion of trust in the very structure of federal grants, which historically have operated under rules of fairness and accountability that transcend the politics of the moment.
In the few weeks this article was being written, SAHMSA drastically altered its grant funding strategic priorities, clearly removing access for political reasons. TRIO grants have also been targeted and are being removed from nonprofits all over the country.
When we view this executive order alongside the history of the Trump Foundation, the parallel becomes unavoidable. What the foundation did in miniature (centralized control, opaque decision-making, and ideological distribution of funds), the executive order attempts to replicate with public money. It is the worst habits of private philanthropy, scaled up with billions in taxpayer dollars. Taxpayer dollars that go to nonprofits eventually paying for our work.
Donor-Advised Funds: Money in the Shadows
Between concentrated private foundations and politicized public funding lies another layer of the philanthropic landscape: donor-advised funds (DAFs).
A DAF functions like a charitable investment account. A donor contributes money and assets, receives an immediate tax benefit, and can recommend grants to nonprofits over time. Unlike private foundations, DAFs are not required to pay out funds annually or to disclose their grantmaking publicly. The result is an enormous and fast-growing pool of charitable dollars that sits largely outside public accountability.
The growth has been staggering. In 2010, there were about 180,000 DAF accounts nationwide. By 2023, that number had exploded to 1.95 million, which is a nearly 1,000% increase in just over a decade. The assets held in DAFs grew from about $45 billion in 2012 to almost $229 billion by 2022, an increase of more than 400%. Contributions in 2022 alone reached $85.5 billion, and grants to charitable organizations that year topped $52 billion, marking the first time DAF grants surpassed $50 billion annually. On the surface, this looks like a philanthropic success story: more money going in, more money coming out, year after year.
But the story underneath is more complicated. DAFs now represent a $230 billion market, expanding at roughly 20% per year, and much of that money is parked rather than spent. DAF Sponsor organizations will publicize that DAFs have over 20% payout rates, but studies have shown that many DAF accounts pay out very little and sometimes nothing at all. In Michigan, the median payout rate of 2,600 community foundation–administered DAF accounts was just 3.1%, with more than a third of accounts not disbursing a single grant in a given year. In California, the Attorney General’s office found that 42% of DAF accounts at community foundations paid out less than 5% between 2016 and 2020. Meanwhile, a share of the “grants” reported by national DAF sponsors are simply transfers to other DAFs (an estimated $2.5 billion in 2021 alone), keeping money circulating within the financial system rather than reaching nonprofits and communities.
There is also a troubling trend of private foundations using DAFs to meet their minimum 5% payout requirement, effectively warehousing assets in DAFs instead of directing them to active charitable work. Some foundations are even closing altogether, moving their assets into DAFs where oversight and transparency all but vanish.
So while DAF growth signals an enormous accumulation of charitable wealth, it also reveals the disappearance of accountability. For nonprofits, this means uncertainty about whether resources will actually reach them. For consultants, it means more clients chasing dollars that may be inaccessible, unpredictable, or aligned with donor interests that actively undermine community needs.
In just the past couple of weeks, I have seen a grant opportunity where the sponsoring DAF fund provided no history of giving, leaving nonprofits with no way to determine what they might actually support. I have also seen a foundation close its doors and transfer millions of dollars to a DAF sponsored by a national institution, effectively taking once-transparent resources and burying them in a black box.
Consultants and the Ripple Effect
At first glance, nonprofit consultants might assume this has little to do with them. After all, not everyone works on grants or in donor development. Many of us specialize in governance, finance, fundraising strategy, communications, or leadership development. Yet every one of these functions ultimately depends on the stability of nonprofit budgets, and those budgets are tied to external funding sources.
A recent study found that nearly half of nonprofits report lacking sufficient funds to deliver their programs, with 50% also experiencing significant financial anxiety about their futures. Recent data shows 1 in 5 nonprofit employees can’t afford basic necessities in their communities. One of my current nonprofit clients with a budget between $2-3 million was discussing bringing on a fundraising consultant until they realized the consultant would likely get paid more than the Executive Director. When nonprofits are squeezed by unstable or ideologically constrained funding streams, consultants inevitably feel the pressure, and that shows up as delayed invoices, undervalued expertise, and an increase in scope creep as organizations scramble to do more with less.
The conversations we have about value-based pricing matter, but they can only go so far if the system itself does not value the work being funded.
An Invitation to Curiosity and Concern
This all might sound dark, and in some ways, it is. But I am not pointing to these stories to cultivate despair. I am pointing to them as an invitation.
What if every time we discussed pricing, we also asked where the money paying us ultimately comes from?
What if we encouraged our clients to lean into Community Centric Fundraising and legal advocacy?
And what if we used our relative privilege as consultants to speak not only to nonprofits, but also upstream to foundations, boards, and policymakers about how the system undervalues the very work it depends on?
If there was ever a time to question the money that funds us, it is now. The Trump Foundation, the executive orders on federal grants, and the growing dominance of donor-advised funds all point in the same direction: decisions about funding are increasingly made by small circles of powerful people, behind closed doors, with little accountability to the public good.
Consultants are not powerless in this. We are not just service providers. We are witnesses to how these forces shape organizations. We are interpreters of trends that many nonprofit leaders cannot name while they are simply trying to survive. We are connectors who can draw lines between individual client experiences and systemic realities. And sometimes, we are the only ones with the freedom to say out loud what others are only thinking.
If we want to be serious about value (our own and our clients’), we cannot stop at the invoice. We have to be curious about the larger game. Because whether we like it or not, that game is already shaping the work we do and the futures we are trying to build.