From growth to retrenchment: Understanding the decline in 2023 funding for LGBTQ communities 

According to Funders for LGBTQ Issues’ 2023 Resource Tracking Report: Lesbian, Gay, Bisexual, Transgender, and Queer Grantmaking by U.S. Foundations, philanthropic funding for LGBTQ communities in the United States dropped by nearly $50 million—or 19% (22% adjusted for inflation) from 2022 levels, reversing gains from prior years. 

Leaders at Funders for LGBTQ Issues warn that a funding crisis is unfolding, and inaction from foundations risks undermining the survival of LGBTQ organizations. In a conversation with Candid insights, Sammy Luffy, director of research, and April Bethea, director of external affairs, discussed the field’s fragility in the face of political hostility and the shift from growth in philanthropic support to retrenchment. 

“The drop itself wasn’t shocking—it was disappointing and disheartening,” Bethea said. “Progressive philanthropy often talks a big game…but getting foundations to truly act on those values can be difficult, especially when it comes to queer and trans communities.” 

Sharp declines in funding for trans and youth LGBTQ communities 

Foundation funding for LBGTQ communities fell from $258 million in 2022 to $209 million in 2023. Support for trans, gender nonconforming, and nonbinary communities declined by 24%. 

This pullback coincided with a wave of anti-trans legislation. Luffy noted that more than 600 anti-trans bills were introduced across the United States in 2023—triple the number from the previous year—many targeting transgender youth. The impact is clear: funding for LGBTQ youth dropped by 42%. 

“The opposition proved it was possible to bully corporations and organizations into abandoning LGBTQ communities…using anti-trans rhetoric as the lever. The narrative made LGBTQ youth more vulnerable, and funders may have pulled back out of fear. We don’t yet know all the reasons behind that decline, but it’s something we’re watching closely,” said Luffy. 

A fragile funding base dependent on a few funders  

The primary reason for the decline is a 24% drop in grantmaking from the top 20 funders out of the 826 in the study. In 2023, these 20 funders accounted for 61% of total funding for LGBTQ communities and causes. Meanwhile, the other 806 funders did not significantly increase their grantmaking to fill the gap. This highlights a top-heavy funding base that is overly reliant on a few funders—and therefore fragile in the face of declines among those few.  

This year’s report excludes top funder and grantee lists due to concerns about increased visibility and safety in a politically hostile climate. “Fear is getting in the way at the time we need help most,” said Bethea.  

In 2023, during the Biden administration, many funders may have believed that government action would help fill funding gaps for progressive causes. “[The feeling was] perhaps federal funding was really stepping up to support LGBTQ organizations so philanthropy didn’t have to fund them as much. That, however, was not the case,” said Luffy. 

Following the 2024 election, mounting social and political pressures signaled to funders that visibility carried risk—exacerbating the funding shortage. 

What the data misses: Flexibility, survival, and justice across issue areas 

Luffy and Bethea acknowledged the troubling 2023 data but emphasized that lived experiences go beyond what the numbers capture. Reflecting on the $6.7 million in rapid response grants tracked for the first time, Bethea noted that the scale of underfunding made it difficult to assess their impact—especially as trans-led organizations, lacking infrastructure and flexible resources to weather ongoing political and financial threats, remained among the hardest hit.  

“Even if there was some sliver of efficacy in rapid response grants, it wasn’t enough to really sustain our movements,” she said. 

Bethea and Luffy emphasized the value of general operating and multiyear grants, noting that time-limited, program-restricted funding leaves organizations unable to adapt to shifting conditions. Luffy added that short-term grants compound challenges like staff burnout, hiring constraints, and limited administrative capacity. “Multiyear support and general operating grants aren’t just recommended,” she said. “They are required for philanthropy to be seen as a co-conspirator in this moment of crisis.”  

“Unrestricted funding allows organizations to dream. To plan. To survive,” said Bethea. “If I have only program-specific funding, I can’t pivot when priorities change. Flexibility is survival.”  

Luffy noted the 41% drop in funding for Black LGBTQ communities and a broader decline for LGBTQ people of color, expressing concern that many 2020-era racial justice grants were not renewed in 2023 and likely weren’t in 2024. This pullback, she said, doesn’t reflect a decline in systemic racism—only in public attention. She emphasized the need for funders to recognize the deep interconnections between movements for racial justice, queer justice, and gender equity—and not treat them as separate funding categories. 

“Funding racial justice is also funding queer justice and gender justice, and vice versa,” said Luffy. “Anti-Blackness has persisted. Now that it’s no longer a ‘hot topic,’ funders are backing away. That is unacceptable.” 

Strengthening LGBTQ support through intentional philanthropy

Bethea and Luffy emphasized the need for a more intentional, inclusive, and forward-looking funding approach to ensure sustainability and meet the growing challenges facing LGBTQ communities. Philanthropies, they argued, should respond to the urgency of today’s hostile climate—by considering ways to increase: 

• Multiyear, general operating grants to help organizations navigate long-term challenges, build capacity, and respond to emerging threats. 

• Funding beyond the top 20 funders. Broader participation could help stabilize support. 

• Support for Black, trans, and youth-led organizations, which continues to lag, despite these groups facing heightened threats and leading advocacy efforts. 

• Visibility of LGBTQ communities that are present across issue areas but not always named in funding strategies. Greater visibility in funder priorities may better reflect the realities of intersecting identities. 

“No matter what you fund, you’re funding LGBTQ communities. All we are asking is to be a little more intentional in how you do that—and why,” said Bethea. 

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