From the Desk of

Carl G. Hamm
Partner
 

With dramatic changes in federal policy and the unexpected loss of government funding for nonprofits likely this year, institutions are scrambling to ensure their essential work continues with as little disruption as possible. In the face of this uncertainty, smart nonprofits are seizing this opportunity to establish or supplement their endowments as a solution for long-term stability, strengthening our society in the process.

Government funding depends on political shifts, budget cuts, and legislative priorities that mirror larger ideological divides regarding the government’s role. While some push for increased federal and state funding for nonprofit services, others argue for reduced governmental influence, resulting in a continuous cycle of funding instability.

The built-in stability of endowments allows organizations to adapt strategically to the unexpected rather than always reacting in crisis mode. A strong endowment also demonstrates thoughtful planning and financial responsibility to donors, inspiring their trust and ongoing investment through private philanthropy.

In 1835, Alexis de Tocqueville noted that our culture of voluntary charitable giving is a hallmark and strength of American democracy, unlike in other countries where the government acts as the primary funding source for social services. In today’s context, his insightful observation remains perhaps more relevant than ever before.

Each of us has the individual freedom—and is uniquely incentivized through our tax system—to financially support the causes and organizations that align with our personal values and priorities. This sense of personal responsibility and participation in improving civil society through charitable giving is fundamental to our democracy and way of life.

In this time of uncertainty, one thing remains clear: the generosity of individuals and families represents the enduring strength of American democracy. Now more than ever, nonprofits must prioritize financial self-sufficiency. As government funding becomes more unpredictable, organizations must turn to those who care most deeply about their existence to build financial resilience and sustain their important work.

Through philanthropic giving, we uphold the values of civic engagement, self-reliance, and collective action that de Tocqueville admired nearly 200 years ago. With healthy endowments strengthened through intentional, strategic fundraising, institutions can serve their communities, champion their causes, and ensure that American society thrives for generations to come—a legacy well worth pursuing as we work through the days ahead.