The Great Funding Realignment: Why Federal Grant Changes Are Reshaping Private Philanthropy

As government support shifts, nonprofits and foundations are entering a new era of fundraising

For generations, the American nonprofit sector has relied on a remarkably diverse funding ecosystem. Individual donors, corporate giving, earned income, private foundations, and government grants have each played distinct roles in helping charitable organizations meet community needs.

That balance is changing.

Over the past two years, nonprofits across the country have faced an unprecedented level of uncertainty surrounding federal funding. Grant programs have been paused or terminated, reimbursements delayed, priorities shifted, and proposed federal budgets have called for significant reductions in spending across a wide range of domestic programs.

The result has been what many nonprofit leaders now describe as a fundamental realignment of the funding landscape.

This isn't simply another challenging grant cycle. It represents a structural change in how many organizations will need to think about fundraising for years to come.

Government funding and private philanthropy serve different purposes

One of the biggest misconceptions emerging from the current funding environment is that private foundations can simply replace shrinking federal support.

In reality, the two funding sources were never designed to perform the same function.

Government grants often fund the ongoing delivery of public services at scale. From affordable housing and community health clinics to workforce development, education, food assistance, and scientific research, federal funding frequently provides the operational backbone that allows many nonprofits to serve thousands—or even millions—of people.

Private foundations typically play a different role. They invest in innovation, pilot programs, capacity building, research, strategic growth, and community initiatives that government funding may overlook.

When one system contracts, the other cannot automatically absorb the difference.

That distinction is becoming increasingly important as nonprofits search for replacement funding.

The numbers tell a sobering story

Recent research highlights just how dependent many nonprofits are on government support.

According to the Urban Institute, between 60% and 86% of nonprofits receiving government grants would have operated at a financial loss without those grants, depending on the state. That finding underscores how central public funding is to the financial health of thousands of charitable organizations.

At the same time, nonprofit leaders report that replacing those dollars is becoming more difficult. The Center for Effective Philanthropy's State of Nonprofits 2026 survey found that more than half of nonprofit CEOs believe it has become harder to secure foundation funding since early 2025, while many report receiving less support from foundations than they had in previous years.

The problem isn't that foundations have become less charitable. It's that demand has increased dramatically.

Private foundations are facing impossible choices

Foundation program officers across the country are receiving more requests than ever before.

Organizations that once relied heavily on federal grants are now turning to private philanthropy to sustain existing programs. Others are seeking emergency funding simply to maintain staffing levels or continue providing essential services.

Every new application forces difficult decisions.

Should a foundation spread limited resources across a larger number of organizations? Should it concentrate funding among long-term partners? Should it prioritize emergency stabilization over innovation? Should it support new applicants or remain committed to existing grantees?

There are no universally correct answers.

Most private foundations are designed to exist in perpetuity. Federal law generally requires them to distribute at least five percent of their assets annually, but many intentionally preserve their endowments so they can continue supporting communities for decades to come. Increasing payouts substantially today may reduce grantmaking capacity during future economic downturns.

In other words, foundations are being asked to solve a problem that philanthropy was never designed—or funded—to solve by itself.

Some funders are increasing their giving

To their credit, a number of major philanthropic organizations have responded to the changing landscape by increasing grantmaking.

Several large foundations have announced accelerated spending or expanded commitments, while many community foundations have established emergency response funds to help organizations experiencing sudden funding disruptions.

These efforts are making a meaningful difference for many nonprofits.

They are unlikely, however, to replace the scale of government funding being lost or delayed across the country. Even substantial increases in foundation giving represent only a fraction of the resources historically provided through federal grant programs.

That reality is forcing nonprofit leaders to rethink long-term financial strategy rather than search for one-for-one replacements.

Competition for foundation grants is intensifying

For grant writers, the effects are already visible.

Foundations that previously received hundreds of applications may now receive several times that number. Organizations with decades of experience pursuing federal grants are entering foundation funding competitions they once paid little attention to.

As competition grows, proposals must do more than describe worthy missions.

Funders increasingly want evidence that organizations can demonstrate measurable outcomes, maintain sound financial management, diversify revenue sources, collaborate effectively with community partners, and continue delivering services after grant funding ends.

Mission still matters.

Increasingly, so does organizational resilience.

What this means for grant writers

The current funding environment presents both a challenge and an opportunity for grant professionals.

The instinctive response to financial uncertainty is often to submit more grant applications. In many cases, however, a better strategy is to submit stronger ones.

Successful grant writers are becoming strategic advisors rather than simply proposal developers. They're helping organizations improve evaluation systems, collect stronger data, build relationships with funders, align programs with community needs, and demonstrate long-term sustainability.

Perhaps most importantly, they're encouraging nonprofit leaders to diversify revenue before the next funding disruption occurs.

Organizations that rely heavily on a single source of income—whether government grants, one major donor, or a single foundation—are inherently more vulnerable than those supported by multiple funding streams.

The strongest proposals today tell not only the story of an important mission, but also the story of an organization capable of adapting to change.

The new normal

No one can say with certainty where federal funding levels will ultimately settle. Budget negotiations continue, legal challenges are reshaping aspects of grant administration, and agency priorities will undoubtedly continue to evolve.

What is already clear is that the nonprofit sector has entered a period of significant transition.

The Great Funding Realignment is not simply about fewer federal dollars. It is about a changing relationship between public investment and private philanthropy, one that is forcing nonprofits, foundations, donors, and grant professionals alike to reconsider long-held assumptions about how charitable work is financed.

Private foundations will continue to play a vital role in strengthening communities. But they cannot—and were never intended to—replace government investment on a national scale.

For nonprofit leaders, the lesson is both sobering and empowering. The organizations most likely to thrive in this new environment will not necessarily be those with the largest grants or the oldest relationships. They will be those that embrace diversification, invest in organizational capacity, demonstrate measurable impact, and build fundraising strategies resilient enough to weather whatever changes lie ahead.

The funding landscape may be shifting beneath our feet, but thoughtful planning, strong partnerships, and strategic grant seeking remain as valuable as ever. In an era defined by uncertainty, resilience may prove to be the nonprofit sector's most important asset.

How to Get Grant Writing Experience When You Have None: A Realistic Guide to Breaking In

One of the most common questions aspiring grant writers ask is deceptively simple:

How do I get grant writing experience if no one will hire me without it?

It's a fair question, and one that reflects the reality of today's nonprofit job market. Browse job postings for grant writers and you'll quickly notice a pattern. Even positions described as "entry level" often ask for several years of experience, a history of funded proposals, or both.

For career changers, recent graduates, and experienced professionals looking to enter the nonprofit sector, that requirement can feel like a dead end.

The good news is that there are practical ways to build grant writing experience without first landing a full-time grant writer position. The bad news is that there are very few shortcuts. Like most professions, grant writing rewards persistence, curiosity, and a willingness to learn by doing.

First, understand what "grant writing experience" actually means

Many people assume employers are looking only for candidates who have personally written dozens of funded grant proposals.

In reality, organizations are usually looking for evidence that you understand the grant development process and can contribute meaningfully to it.

Grant writing involves much more than writing. It requires researching funding opportunities, interpreting eligibility requirements, interviewing program staff, gathering organizational information, developing project narratives, coordinating budgets, collecting supporting documentation, reviewing application instructions, and meeting strict deadlines.

Very few grant writers master all of those skills overnight.

If you've participated in any part of that process—even indirectly—you may already have more relevant experience than you realize.

Don't wait for the perfect grant writer job

One of the biggest mistakes aspiring grant writers make is focusing exclusively on job titles.

Many successful grant professionals never started as grant writers.

They worked as program coordinators, development assistants, fundraising associates, communications specialists, researchers, teachers, public health professionals, or nonprofit administrators. At some point, someone asked them to help with a grant application. Then another. Before long, grant writing became a significant part of their responsibilities.

Those experiences count.

Employers generally care far more about what you've done than what your business card said while you were doing it.

If you're trying to break into the profession, don't overlook positions that include grant responsibilities alongside communications, fundraising, program management, or development work. They may provide a much stronger pathway than waiting for the elusive "entry-level grant writer" opening.

Volunteer strategically, not endlessly

Volunteering is one of the most frequently suggested ways to gain grant writing experience.

It's also one of the most misunderstood.

Simply offering to "write grants" for any nonprofit that will accept free help is rarely the best approach. Many smaller organizations lack the systems, data, or funding readiness needed to support successful grant applications. Others may have unrealistic expectations about how quickly grants can generate revenue.

Instead, look for opportunities where you'll actually learn the grant development process.

Working alongside an experienced development director or grant consultant can be far more valuable than struggling through complex applications entirely on your own. Even if your initial responsibilities involve research, document preparation, or editing rather than drafting the narrative itself, you'll begin to understand how competitive proposals are assembled.

That knowledge becomes increasingly valuable with every application you help complete.

Build a portfolio—even if you don't have funded grants

One misconception discourages many new grant writers before they ever apply for a position.

They assume they need a long list of successful grant awards to demonstrate their abilities.

In reality, employers often understand that funding decisions depend on many factors beyond the writer's control. Even experienced grant professionals routinely submit excellent proposals that are declined because funding is limited or priorities change.

What employers often want to see instead is evidence of your thinking.

Can you organize complex information clearly?

Can you explain a community problem using credible data?

Can you connect a proposed solution to measurable outcomes?

Can you write persuasively while following detailed instructions?

Those abilities can be demonstrated in many ways.

Proposal excerpts, needs assessments, project summaries, logic models, case statements, research briefs, annual reports, and other nonprofit writing samples can all showcase skills that translate directly to grant writing.

A thoughtful portfolio says much more than simply listing "grant writing" as a skill on a résumé.

Learn the parts of grant writing that people overlook

Ask experienced grant writers about their jobs, and many will tell you the writing itself occupies surprisingly little of their time.

Much of the work happens before the first sentence is ever drafted.

Successful grant professionals spend significant time interviewing program staff, reviewing budgets, collecting organizational documents, analyzing funder priorities, confirming eligibility, and coordinating information across multiple departments.

Learning these behind-the-scenes responsibilities can make you far more valuable than someone who focuses exclusively on writing.

Organizations need people who can manage the entire proposal process—not simply produce polished paragraphs.

Develop subject matter expertise

Many organizations don't hire grant writers simply because they can write well.

They hire people who understand the work the organization actually does.

A nonprofit serving people experiencing homelessness may prefer someone familiar with housing policy. A healthcare organization may value knowledge of public health.

Environmental organizations often appreciate candidates who understand conservation or climate resilience. Educational nonprofits frequently seek applicants who understand schools, youth development, or workforce training.

Subject matter expertise can become a powerful advantage, particularly when competing against applicants with similar writing skills.

The stronger your understanding of a nonprofit's mission area, the easier it becomes to write proposals that sound informed rather than generic.

Don't underestimate transferable skills

One reason people become discouraged is that they define experience too narrowly. Grant writing draws upon skills developed in many different professions.

Researchers know how to locate and evaluate evidence.

Journalists know how to interview people and tell compelling stories.

Copywriters know how to attract and keep attention, and motivate action.

Teachers understand learning objectives and measurable outcomes.

Project managers excel at timelines and coordination.

Communications professionals know how to write clearly for different audiences.

Financial staff understand budgets and compliance.

Those experiences don't replace grant writing knowledge, but they provide a remarkably strong foundation.

The most successful career changers recognize those connections and learn to explain them during interviews.

Keep learning—even after you're hired

This is obvious but you would be surprised how many don't do it. Grant writing isn't a profession where you eventually know everything.

Funding priorities evolve. Federal agencies revise their requirements. Foundations shift their strategic focus. Evaluation practices become more sophisticated. Artificial intelligence is changing how organizations conduct research, prepare drafts, and manage information.

The strongest grant writers remain students throughout their careers.

They read funding announcements carefully. They study successful proposals when available. They attend webinars, participate in professional associations, and continuously refine their understanding of nonprofit finance, program evaluation, and funder expectations.

That commitment to learning is often what separates good grant writers from exceptional ones.

Experience begins before someone gives you permission

It's understandable to feel discouraged after reading job posting after job posting asking for experience you don't yet have.

But experience isn't something that suddenly appears after receiving a job offer.

It develops one project at a time.

One funding search.

One proposal review.

One conversation with a program director.

One needs assessment.

One draft.

One revision.

Every experienced grant writer started there.

The organizations that eventually hire you won't be looking only for someone who has already done the job. They'll also be looking for someone who has demonstrated curiosity, professionalism, sound judgment, and a genuine commitment to learning the craft.

Those qualities are available long before your first official grant writer title appears on your résumé—and they're often what open the door to that first opportunity.

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If you've ever wondered why so many entry-level grant writing jobs ask for years of experience, we've explored that paradox in a separate article here.

S.F.’s recovery is missing one of the hardest things to bring back | San Francisco Chronicle

Allison Arieff

San Francisco Chronicle

In 1989, I landed my first job post-college in San Francisco — as an administrative assistant (aka gallery girl) at the Capp Street Project art gallery located in a former auto body shop at 14th and Mission streets. My salary was $16,000. I lived in an expansive one-bedroom apartment in Oakland; the rent was $600, but because the building was called the Alison Apartments, the landlord cut it down to $550. My boyfriend was a painter with a day job as an art handler. We found ourselves smack in the middle of one of the most fascinating art scenes of the era.

People know about the Beats and the Summer of Love, but little has been written about the dynamic art and music scene that was happening in San Francisco in the late ’80s and early ’90s. Live/work spaces were occupied by artists, not techies. First Thursdays in Union Square were packed. Capp Street — where gallery-goers poured into the streets to see the then-emerging artists like Bill Viola and Ann Hamilton — was part of a larger Bay Area art ecosystem of nonprofits like Artspace and New Langton Arts in San Francisco’s South of Market and Pro Arts in Oakland, established galleries like John Berggruen and Rena Bransten in Union Square and art schools that produced generations of incredibly creative people.

Those were years when it felt like there was always something to see.

Hamilton carpeted the floor of Capp Street with 7,000 pennies (her artists’ fee) embedded in honey while two live sheep took up residence in a pen behind them. Viola installed a video of his wife in childbirth amidst a forest of living redwood trees. 

But perhaps most memorable was Survival Research Laboratories’ 1989 “Illusions of Shameless Abundance” — a completely insane and incredible display of the perils of man fusing with machine. “Who was in control?” wondered hundreds of spectators as SRL burned 20 pianos under a San Francisco freeway underpass at Fourth and Berry streets, while unwieldy machines — a mix of medieval catapults and industrial hydraulic precursors of Boston Dynamics dogs — battled it out.

It was dangerous and exciting, unpermitted and unforgettable. No phones, no admission fees or guardrails, nothing monetized or shared on socials.

Could never happen today.

Everyone thinks that San Francisco was perfect the day they arrived, and I’m sure I’m no exception. I can’t help but be nostalgic for a time when the arts felt core to the identity of the city.

There are incredible artists working here today, of course, but it’s probably never been harder for them to do so.

More galleries are closing. The California College of the Arts has shut down, and so has the San Francisco Art Institute — its reopening date after its acquisition by  Laurene Powell Jobs has not been announced. The Contemporary Jewish Museum and the Mission Cultural Center for Latino Arts have closed, both citing a lack of funding. The San Francisco Museum of Modern Art even lost the sponsor of its free Thursday night admissions program. No company has stepped up to fund it. 

Private philanthropy, which once could be counted upon to support the city’s major institutions, is disappearing as patrons get older. The city may be flush with private capital, but the culture of tech is largely one of metrics and results; few in this community seem inclined to support something with a hard-to-measure return on investment.

As for public support, federal funding has, of course, all but dried up under President Donald Trump. San Francisco Mayor Daniel Lurie’s administration has repeatedly declared that art will revitalize the city, but what it has offered in the way of specifics or support is minimal at best. Public/private partnerships committed to downtown revitalization are doing great work, but are steering the bulk of the efforts toward business and commerce and not enough toward culture.

A city can’t exist just to generate capital and provide places for people to spend it. There’s got to be more than that.

Art is a means of expression, something to look at, something to think about. It’s a way of connecting, an exchange of ideas, a way of allowing us to experience the world through others’ perspectives.

When the city’s most visible artistic philanthropy — if you can call it that — is the works personally selected by a billionaire for his Big Art Loop (what I like to call the Loop of Big Art), we’re in trouble. As KQED reported last October, billionaire Sid Sijbrandij, co-founder of GitLab, is allowed to display 100 pieces of large-scale art around the city, “simply because he’s paying for it.” 

That’s no way to build an arts community.

One low-overhead intervention that could move the needle is the already established Zero Empty Spaces initiative, which transforms vacant commercial real estate into temporary, affordable space for artists to collaborate. In return, the artists agree to open their spaces to the public for a certain number of hours per week. Zero Empty Spaces just launched its first California project in Berkeley at the former Half Price Books on Shattuck Avenue.

San Francisco has its Vacant to Vibrant program. But that’s more focused on supporting new businesses rather than the arts. However, in 2010, the city had a successful Art for Storefronts program. Why not bring it back to fill some of the at least 20 vacant banks and drugstores throughout the city?

I am not suggesting any one thing can bring back the creative vitality of years past. “The arts” is an ecosystem. It’s not about one institution or one event or one creative genius — but the interconnectivity of people, practice and vision. 

My nostalgia is for a time when there were not just places to see art but schools and instructors to teach it; when there were affordable studio and exhibition spaces — large and small — to display, preserve and interpret it; magazines and journals to promote, discuss, support and debate it; and cheap, abundant housing for all members of this ecosystem.

I think back fondly on that time. I left Capp Street to pursue a master’s in art history and ended up marrying the guy I met there back in 1989. 

But nostalgia can’t bring back what was. New eras demand new approaches.

For now, something visible needs to be done, and fast. Something focused not just on commerce but on building up a community that’s disappearing before us.

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Allison Arieff is a columnist and editorial writer for the Opinion section.