A vast array of federal funding cuts has reached San Francisco.
A family reunification program for immigrant children at the Women’s Building shut down in March. The Roving Community Health Initiative, which offered health care services to homeless residents in the Tenderloin, paused its operations in April. In early May, the National Endowment for the Arts abruptly cancelled at least 30 grants worth almost $1 million to San Francisco arts and culture groups.
In the wake of these cuts, nonprofits are scrambling: Emailing donors for support, and crossing their fingers that wealthy individuals and foundations will step up to fill the gap.
That appears unlikely.
“It doesn’t matter how much money foundations like mine make available,” said Adriana Sanchez, director of community organizing at the Latino Community Foundation, which had total assets of more than $39 million in 2022. “We cannot fill that gap from the government.”
‘Step in and step up‘
“Government funding has always far outstripped philanthropy,” said Sandy Herz, a longtime philanthropy executive in the Bay Area, so much so that the goal for many nonprofits is to prove their efficacy and have the government start funding them, to avoid relying on private, and more fickle, foundation funding.
Arts and culture nonprofits, in particular, are historically underfunded by large-scale philanthropies, which usually prioritize social issues like homelessness, poverty and climate. That makes the loss of federal funding sting even more for them.
In the past five years, the National Endowment for the Arts distributed almost $82 million in California. In San Francisco, the federal agency planned to give out $1.6 million in grants in fiscal year 2025. Many of these grants have since been cancelled.
The California Arts Council, the state agency, awarded nearly $19.5 million in grants in the 2024-2025 fiscal year. That’s unlikely to fully continue as California faces a $12 billion budget hole.
As for the city, the San Francisco Arts Commission gave out $11.3 million in grants to nonprofits and artists in fiscal year 2023-2024. But now, the city’s budget deficit stands at $781.5 million.
“Philanthropy cannot fill the hole of the public sector,” said Allison Magee, president and executive director at the Zellerbach Family Foundation. “I don’t think philanthropy should fill the role of the public sector. The public sector has an obligation to support communities.”
The Zellerbach foundation operates total assets of $160 million. It gave out $6 million in 2023 to such art groups as the Bay Area Theatre and the San Francisco Contemporary Music Players. The foundation is “encouraging its board to put out more money,” Magee said.
As of February, the assets held by foundations in the United States are estimated at around $1.64 trillion, double what it was a decade ago. San Francisco foundations are among the largest: The William and Flora Hewlett Foundation, for example, has assets of $13.9 billion and distributed $621 million in 2024. Crankstart Foundation made $201 million in grants in 2024.
Foundations are obliged to spend at least 5 percent of their assets a year, and most do. Still, there are many who say that’s not enough.
“There is a dominant culture in philanthropy that is around growing the assets you have in your endowment, rather than giving away as much as you can,” Herz said.
The turmoil at the federal level, she said, is pushing foundations to change that culture and take more actions by giving more now, rather than investing the money and giving later.
“Creating a culture where the norm is to give away more would be a very powerful signal, and would actually get much-needed funds put to work,” Herz said.
Funders say they are “doing their best to stop the bleeding.” Some foundations have stepped up: For example, the San Francisco Foundation announced last month that it will allocate an additional $15 million from its endowment over two years to support its grantees.
But with funding cuts everywhere, it’s hard to know what to prioritize. For now, philanthropy is figuring out “a coordinated and more thoughtful response, rather than just a bunch of funders taking individualized, fragmented approaches,” Magee said.
The Zellerbach Family Foundation, for example, is surveying its former and current grantees to understand how much funding they’ve lost. The Latino Community Foundation has put out grants directly in response to increased immigration enforcement. Other foundations have dipped into their reserve funds or made funds more flexible.
Sanchez, from the Latino Community Foundation, worries that groups led by and serving people of color would be hurt the most as the government goes after DEI initiatives.
Many foundations, she said, are “on high alert” as the Trump administration doubles down on eliminating DEI. Nonprofits are now going through their websites and changing language, “being more careful about what they say, how they say it,” said Sanchez.
The “tone and tenor,” Magee added, is now one of “fear, anxiety, and sadness.”
Many of the San Francisco non-profits are a scam.