Key findings from Foundation Source data and 2026 giving outlook

According to Foundation Source’s 2025 Report on Private Philanthropy, grantmaking by private foundations saw a 4.2% year-over-year increase in 2024. Candid insights asked Gillian Howell, Foundation Source’s national philanthropy executive, and Joseph Mrak III, CEO, about further insights into what we might expect for giving in 2026.

1. 2024 foundation giving increased 4.2%

In 2024, the 1,136 private foundations analyzed in the report awarded 4.2% more in grant dollars overall, with a 13.6% jump among midsize foundations with assets between $10 million and $100 million. Can we expect they increased their grantmaking in 2025 as well, in response to sector pressures or other factors?

“Taken as a whole, it’s reasonable to expect that the cohort of foundations in the Report on Private Philanthropy continued to give consistently and thoughtfully in 2025,” said Howell. “With federal and state funding becoming more uncertain and, in some cases, contracting, private foundations are stepping in as a stabilizing force. Rather than shying away, many philanthropists are responding by deploying capital more deliberately through sustained grantmaking, flexible support, and higher-than-required payouts to help protect essential organizations and services.”

2. Payout rates rose among smaller foundations, fell among larger ones

In 2025, several foundations announced they were tapping into their endowments and increasing payout rates in response to the changing funding climate. In December, at least 35 philanthropies signed CHANGE Philanthropy’s Level Up pledge to increase their grantmaking budgets by 20% or more or increase payout rates to 8% or above for at least two fiscal years.

The foundations in the report averaged a 7.1% payout rate in 2024, unchanged from 2023. Average payout rates among smaller foundations with assets of $10 million or less rose from 9.9% to 10.3% in 2024, while the average for midsize foundations with assets between $10 million and $100 million ticked up from 6.9% to 7.1%. By contrast, the average among larger foundations with assets of $100 million or more fell from 5.8% to 5.2%. This is in part because larger foundations award larger grans, Howell explained. 

“Larger foundations tend to deploy more intensive strategy, diligence, and stewardship, ranging from customized grantee agreements and multiyear commitments to deeper evaluation of outcomes and performance,” she said. “They may be more inclined to balance generous gifts with long-term asset preservation and more deliberate deployment, while some smaller foundations can be nimbler with their capital. Both approaches play an important and impactful role in the philanthropic ecosystem.” 

3. Funders may be leaning into general operating support grants 

Of the 2024 grants analyzed, 40.3% were for general operating support (GOS), up slightly from 37.1% in 2023. Smaller foundations awarded a higher proportion of GOS grants (49.4%) than midsize (42.6%) or larger foundations (26.9%). “The disparity in GOS by foundation size reflects how grant size, risk, and responsibility scale together,” Howell noted. “Smaller foundations tend to make more modest grants, which allows them to provide unrestricted support with fewer downstream risks.”

Given the calls for more flexible funding as nonprofit faced new challenges in 2025, can we expect increased GOS funding overall in 2025 and 2026?

“[F]lexibility remains an important tool, and we’ve seen funders use it deliberately when circumstances call for it,” she said, as seen during the COVID-19 pandemic, when many foundations lifted restrictions amid urgent, rapidly changing conditions. “We’ve seen a similar reaction from many funders this year amid ongoing uncertainty around federal and state funding. Though it’s too early to adequately measure the response, we have seen more than half of grants in 2025 so far earmarked for GOS, which speaks to how funders balance flexibility with structure to help nonprofits remain resilient and effective.”

4. Giving to non-501(c)(3) entities grew in 2024 

The report also analyzed “advanced grantmaking activities” beyond traditional grants, including direct charitable activities, gifts to individuals, grants to non-501(c)(3) entities, such as 501(c)(4) organizations or for-profit businesses, and program-related investments, including loans, loan guarantees, and equity investments. In 2024, the number of gifts to non-501(c)(3) entities fell from 462 to 355, but the total dollar amount rose from 39 million to $51 million.

“What we’re seeing in the data is consistent with a learning curve; funders often begin by partnering with nontraditional organizations through multiple smaller grants, then narrow their focus and make larger, more targeted investments in the approaches or organizations that demonstrate the strongest traction or outcomes,” Howell explained. “This type of grantmaking is indicative of a broader issue in philanthropy: The path to 501(c)(3) status can be long and cumbersome, and nontraditional pathways are critical to ensuring impactful work isn’t sidelined because of red tape.”

5. Digital tools could boost giving in 2026 from younger donors 

In his 2026 Giving Outlook, a companion piece to the report, Mrak highlights “tax reform, political and economic shifts, and the ongoing evolution of donor demographics, as the most significant forces driving charitable giving in 2026.” For Gen Z and Millennial donors, “digital innovation is becoming central to trust and engagement.”  

“Trust is built on transparency, consistency, and open communication, and digital technology is making it easier to embed those principles into philanthropy,” he explained. “For younger donors, in particular, who are accustomed to managing every aspect of their financial lives digitally, trust increases when information is easy to access, intuitive to understand, and updated in real time. It’s imperative to evolve with this demographic as the Great Wealth Transfer brings a new generation of donors into leadership roles with significant philanthropic capital.” 

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