MacArthur President John Palfrey shares our extended commitment to a payout rate of 6 percent for 2027 and 2028, responding to the ongoing nonprofit funding crisis.
As the nonprofit sector continues to struggle with uncertainty and funding cuts, we will extend our commitment to a charitable payout rate of 6 percent through 2028. This will mean approximately $190 million in additional charitable payout spread over 2027 and 2028 relative to our baseline, assuming projected investment returns.
In early 2025, we shared that the MacArthur Foundation would “Set it at Six” to support the nonprofit sector at a time of increased need. We committed to increase our charitable payout to at least 6 percent for 2025 and 2026 and, where possible, use flexible, trust-based models for our charitable gifts. This was always our floor, never our ceiling. We exceeded our commitments in 2025, with our charitable spending estimated at $647 million or a rate of 7.1 percent. We also applaud our peers who have committed to give more and who are doing so.
Communities, leaders, and nonprofits are doing the work, showing their resilience and power, and philanthropy still needs to do more.
Why are we extending our commitment to a charitable payout for two more years? Because it is clear the nonprofit sector continues to face a funding crisis. Communities, leaders, and nonprofits are doing the work, showing their resilience and power, and philanthropy still needs to do more.
Meeting an Increased Need
Challenges and funding gaps remain urgent issues for every community. We hear this in our conversations with grantees, and the data backs it up. The Center for Effective Philanthropy report on the ongoing challenges in our sector found that nonprofit leaders are continuing to see both increased demand for services and significant funding cuts: 81 percent of nonprofit leaders reported increased community needs, and 69 percent had experienced reduction in funding.
In response, MacArthur’s support has taken many forms. We are listening to grantees and the charitable sector, uniting with our peers to defend the freedom to give to the causes we care about, increasing our giving and flexibility where we can, and offering training, coaching, and other resources to the nonprofits we support. From telling human stories through the humanities, to supporting nonpartisan organizations and coalitions defending the essential elements of American democracy, to deepened support for the sciences, we aim to be responsive to emerging needs.
Challenges and funding gaps remain urgent issues for every community.
In addition, MacArthur’s continued financial strength means we can manage the costs for the next two years, if we act with prudence. Our Board of Directors affirmed that this increase continues to be aligned with our spending guidelines and our fiduciary duties. Our spending guidelines allow flexibility—for contracting and expanding—and set forth applicable criteria for when we would increase our payout. This includes when:
- Grantees face urgent, time-sensitive need
- MacArthur can lead or catalyze other funders
- We have unique reach or expertise
- Acting later would be acting too late
Looking Ahead
There are also times when we might step back, such as when long-term capacity is at risk or when markets drop sharply, shrinking the endowment. We are balancing our responsiveness with clear-eyed realism.
We are balancing our responsiveness with clear-eyed realism.
At the end of 2028, additional spending for our Set it at Six initiative will end, and we intend at that time to revert to a target payout of 5.25 percent. Any further extension would require a fresh analysis of key criteria and new Board action. This automatic sunsetting will help us manage our resources for perpetuity, as mandated by our founding documents, so future generations can make their own choices and address the unknown challenges that will no doubt shape their lives.
We remain committed to our mission and values, and we aim to be consistently flexible as we reimagine what’s possible. We hope others leading foundations will choose to join us in continuing to increase our payout during this sustained crisis period for our sector.
