Federal Cuts Spur Grantmaker Pledge To Fill the Gaps
In the wake of federal funding cuts affecting nonprofits, over 150 organizations have signed a pledge urging grantmakers to extend their support and funnel fresh funds to hard-hit advocacy groups that have lost federal contracts.
Earlier this year, the Trust-Based Philanthropy Project, a funder-to-funder advocacy initiative, launched the “Meet the Moment” campaign.
More than 144 grantmaking organizations have already signed the Meet the Moment pledge as funder signatories, with 31 nonprofits, membership bodies and philanthropy-influencing groups that have formally endorsed the commitment.
While not all signatories are increasing overall giving, many are redirecting funds to urgent community needs and collaborating as part of a growing network of values-aligned funders exploring how best to support nonprofits amid federal funding cuts.
MinistryWatch reported earlier this year that despite federal funding freezes, many expect government funding will continue flowing into some programs — including many run by Christian organizations.
While they vary on whether the cuts produce more problems or resolutions, some advocates of “relational” approaches to charity contend that, while the road ahead will be difficult, the gap presents a constructive opening for churches, nonprofits and foundations to meet needs with greater precision, empathy and lasting impact than many government programs have historically achieved.
One “advocate” who sees more positive opportunities is James Whitford, author of “The Crisis of Dependency” and founder of True Charity — a growing network of more than 200 like-minded organizations dedicated to revitalizing civil society’s role in the fight against poverty.
Whitford, who claims that America “never got out of the relief business” following the Great Depression, argues that accepting government funds prevents Christian nonprofits from applying the gospel’s transformative power, leaving them to treat symptoms rather than root causes. He contends that government intervention “crowds out” private charity, and individual giving and civil society initiatives inevitably shrink when the state meets basic needs.
Whitford also says that while the funding gap creates room for positive community action, it also carries a risk: Well-intentioned residents may rush to launch nonprofits that replicate government programs — focusing on redistributing goods rather than addressing root causes.
Because such “toxic charity” can just as easily come from private groups as from government, local initiatives must avoid becoming mere replacement relief agencies, according to Whitford. Instead, he says they should adopt relational approaches that empower people to escape poverty for good.
In a recent interview with MinistryWatch, Whitford said grassroots nonprofits, churches and local charities in True Charity’s network increasingly move away from one-way handouts and embrace “poverty-resolution” strategies that foster relationships, track measurable outcomes and empower individuals to earn income. He says civil society is bridging the gap as federal support declines.
“The organizations in our network, they’re thinking about more than poverty alleviation: They’re thinking about poverty resolution, and they’re not thinking about it from a broad sweep, statistical figure,” Whitford said. “They’re thinking about it on an individual basis because they’re very relationally oriented ministries.”
The benefits cliff
One area this shows up is the benefits cliff — a term used for when someone receives public benefits from the government, earns a raise and then discovers that they make too much money to receive the benefits but not enough money to sustain themselves.
“Through the government’s policy, we’re unintentionally incentivizing or trapping people in poverty,” Whitford said. “Some solutions around this are, ‘Let’s just inflate benefits on the other side, so when they’re about to lose all their food stamps or medical benefits, it’s more of a ramp instead of a cliff.’”
But, “Why not civil society?” Whitford asked. “Why not the private sector fill that gap instead of inflating government programs to mitigate this cliff effect?”
One example is 6:8, a pilot program in Sauk City, Wisconsin, that through private charity reimburses more than 100% of the food stamp or Medicaid benefits a single parent might lose by accepting a raise, transforming the cliff into a gradual, dignified off-ramp.
“It’s great because they are filling in the gap created by the benefits cliff, where people are incentivized not to take a raise or advance their work life. After all, the benefits will drop off, and it becomes more advantageous for them to remain in a low-wage bracket — in poverty,” he said.
In contrast, organizations within the True Charity network provide relationship-based coaching, inspiration, and education that permanently empower people to leave poverty.
Are Christians prepared to dig deep in their pockets?
While he agrees that the funding gaps have produced opportunities, Justin Lonas from the Chalmers Center told MinistryWatch that Christians need to look for ways to fill in the gap.
“Christians need to step up to the plate and give,” he said. “There are estimates that even just considering what’s going on domestically — with just the foreign aid that has been cut — every American, not just every Christian, but every American, would have to quadruple their giving to replace the lost funding.
“I don’t think many Christian Americans have thought about that. Are we prepared to dig deep in our pockets and do that?”
He said greater efficiency and creativity will help, but quality economic development work still needs funding — for salaries, tools, medicine, and equipment. The upside, he argues, is that today’s financial pressures may finally push communities toward a more participatory, locally driven approach to development.
‘It can’t be top down, it can’t be outside in. It has to collaborate with people and communities,” he said. “Work is not just a means to provision, but work is part of reintegration into community life and how we do things.”
Lonas says Christian employers can model a participatory approach by hiring people leaving welfare or incarceration and surrounding them with supportive networks. Meaningful work provides income and social capital — co-workers, relationships and long-term stability.
With public funding uncertain, communities must innovate, empower those they serve and replace the provider-receiver mindset with true collaboration.
“Let work be part of growth and recovery, not just meeting people’s needs but folding them into relationships. Work doesn’t just give us food on the table. It provides social capital. We have to go to a place and have coworkers, get to know people, share our stories and build webs of relationships and support that can help us flourish over the long haul.”
Still, Lonas, who worked at an international missions organization for nearly a decade before joining the center, pushes back on the idea that all government funding is bad.
“Many American Christians might see anything from the government as a net bad. I would push back on that and say God institutes governments among us to promote good and punish evil,” he said.
“Part of the historical promotion of good for many governments, especially in the post-industrial era, has been to consider ways of securing a bare minimum standard of living for most of the citizens in the country to provide things like social security or minimum standard of health care for people so no one any falls through the cracks and suffers needlessly.”
Flourishing happens when individuals are restored in their relationship with God, others, work and self — not just through financial assistance, he said. He added that while larger organizations still have a role, all ministries should lean into a theology of trust, knowing God is not surprised by the upheaval and remains at work even in seasons of scarcity.
Lonas also emphasized the need to rethink the relationship among civil society, parachurch ministries and the local church. He urged Christians — especially those who claim social care is the church’s responsibility — to step up and fill the gaps left by federal withdrawal.
Stepping up in the Trump administration
Marvin Olasky, scholar and author of 28 books including “The Tragedy of American Compassion,” told MinistryWatch he believes the current administration is imposing funding cuts in a detached, impersonal manner.
“It is hard to fire a person. It is much easier to fire 10,000 people,” he said. “Many of these cuts have been done in an artificial intelligence process, with number crunchers making these massive cuts without being aware of the particular problems and peculiarities of each situation. That’s not the way to do business.”
Olasky added that local groups can’t fill vast funding gaps — restoring cuts like PEPFAR, for example, would require political change or intervention from mega-foundations. However, they can act politically and protest, he said.
He cited hedge-fund billionaire Ken Griffin, once a major Trump donor, who has now publicly broken with and criticized the administration, showing how influential voices can shift what’s politically acceptable.
Olasky said he is still waiting for prominent conservative Christian leaders to distance themselves, especially because Trump’s second term so far lacks the internal and electoral checks that restrained his first. “I suspect there are lots of people who are revolted by what they’ve seen — and it’s important for people who are revolted to start revolting.”
Christian leaders seeking “a seat at the table” with Trump haven’t publicly — or visibly, privately — challenged him, Olasky said, raising doubts about whether they’re truly acting as prophetic voices.
“You can justify [your seat] and say, ‘I am being useful here. I am being a voice’ — but are they being the voice? What is going on internally?” he said.
“Maybe it’s going on. Maybe someday the history books will reveal that, but among those who profess Christ and are in Trump’s inner circle, I haven’t heard or seen any hints that they are, in fact, being a voice against Trump internally,” Olasky said. “So if they are — good, God bless them. But if they aren’t, some of them should step up.”
Buckets and a broken bicycle
Meanwhile, Olasky said budget cuts expose many community-level needs that churches and local foundations can identify and meet by keeping their ears to the ground. “If people in a specific community have become dependent on some governmental program and their program is gone, what can you do to help those people?”
Olasky referred to Booker T. Washington’s famous speech in Atlanta: “Cast Down Your Bucket Where You Are,” which invoked the tale of a ship lost at sea that discovers fresh water only after repeatedly “casting down its bucket” where it drifted. Washington’s 1895 Atlanta Compromise speech urged Black Americans and White Southerners alike to find mutual progress and prosperity through local cooperation, vocational industry and self-reliance rather than seeking salvation elsewhere.
Olasky used the analogy to encourage citizens to think in micro-terms and be involved in their community. “If you have farms, grow the farms; if you have businesses, grow the businesses.”
He gave an example of a child in a low-income neighborhood with a broken bicycle. A couple fixed the child’s bicycle. Soon after, other children showed up with their broken bikes. The couple identified an opportunity and began teaching older kids how to make their own repairs.
“That single act snowballed into a community bike shop with a training program that now equips local youth with bicycle repair skills,” he said. Olasky noted the concept can apply to auto repair and elsewhere: Teaching about job readiness, teaching about work, and a particular way to identify problems and connect them to “what can I repair?”
The bicycle repair program has since grown into a regular training program, and many kids have started thinking about work differently. “But it all started basically with one broken bicycle,” he said.
Another example of “throwing down the bucket” happened just south of Nashville, where a man created a volunteer ride network after noticing the lack of public transit where he lived. He matched car owners with neighbors who needed lifts to jobs or medical appointments, acting as an informal “switchboard” that solved a local problem through grassroots initiative.
Olasky’s advice for the next steps is to begin at the street level, not the “suite” level, and identify real needs from the bottom up through on-the-ground research rather than outsider assumptions.
These modest, close-to-home examples can also point toward a larger model: a local foundation identifies a community problem, consults residents to understand the need, and then designs a targeted response — all at the community level. The process demands careful research and creative thinking, but he said it begins by “lowering your bucket” right where you are.
“So that’s local, small-scale local,” Olasky said. “That doesn’t really help with big, large-scale international things like cutoffs or Pepsi and Pepper — and there you have some big national foundations that I hope will get involved in making up the difference.”
Unite in Advance Pledge
According to an article published in April by The Chronicle of Philanthropy, a handful of marquee names — MacArthur, Skoll, Hewlett and Freedom Together — have already written sizable checks. Sector insiders say many larger endowments remain cautious, citing the “political minefield” of openly replacing federal dollars and the risk of White House retaliation in a hyper-polarized climate.
Although it shares some signatories, the Meet the Moment pledge is distinct from another pledge launched on April 8 in response to “governmental attacks.” Fearing that foundations could be the next American institutions under attack, The Council on Foundations issued a Public Statement from Philanthropy — its Unite in Advance Pledge — calling on foundations to unite and protect the freedom to support local nonprofits.
Nearly 700 organizations have signed that statement since.
This piece originally appeared at MinistryWatch.
Jessica Eturralde is a military wife of 18 years and mother of three who serves as a freelance writer, TV host, and filmmaker. Bylines include Yahoo, Huffington Post, OC16TV.