A new report by the Institute for Policy Studies (IPS) suggests that much of modern American philanthropy primarily helps the wealthy entrench their riches rather than significantly aiding struggling communities. The report, titled "Gilded Giving 2026," claims that for many extremely wealthy Americans, philanthropy has become "part of that defense of extreme wealth."
According to the IPS analysis of IRS data, the assets of 144 charitable foundations with over $1 billion each saw substantial growth. These assets increased by 42%, from $420 billion in 2020 to $597 billion in 2024. Over the same period, charitable grants from these foundations grew by 36%, rising from $25 billion to $34 billion. The report notes that the median annual payout from these foundations was 5.1%, barely exceeding the IRS requirement that annual payouts and administrative costs total more than 5% of their assets. Rules allow foundations to pay less in some years if they paid more in others, and some foundations linked to booming corporations appear focused on giving the bare minimum.
The Lilly Endowment, identified as the nation’s largest foundation, reached a 5% payout in 2025 for the first time since 2009, according to the report. Its payout was 3% in 2024 and 3.4% in 2023. The report notes that the endowment’s assets have more than doubled in value since 2022 due to the popularity of GLP-1 drugs. While the Lilly Endowment and pharmaceutical company Eli Lilly and Co. are legally separate, they are connected, as the endowment was created in 1937 by J.K. Lilly Sr. and his sons, who also led Eli Lilly and Company. The endowment remains a substantial shareholder in the company, Influence Watch reports.
In response to the IPS characterization of its giving, Judith Cebula, the Lilly Endowment’s communications director, stated via email that a private foundation is required under federal tax law to make eligible charitable expenditures equal to or exceeding 5% of the average fair market value of its investment assets, subject to adjustments. This amount, she explained, is determined by a complex calculation and must be paid over a two-year period. Cebula affirmed that the Lilly Endowment has always exceeded its required payout.
Another aspect of the report highlights the significant tax breaks wealthy individuals receive for charitable contributions, effectively creating a tax subsidy. The Tax Policy Center notes that higher-income individuals generally save more taxes due to higher marginal tax rates and their likelihood of itemizing deductions. A 2019 academic paper by tax experts suggested these subsidies could be as high as 74%.
The IPS report also stated that as tax-exempt contributions accumulated in billion-dollar foundations, many powerful givers did little to oppose President Donald Trump’s One Big Beautiful Bill Act. That law provided $1 trillion in tax breaks to the wealthiest 1% of Americans while reducing a similar amount from Medicaid and federal food assistance. The report further accuses many billionaire philanthropists of capitulating to authoritarian attacks on charitable organizations that fight hate and promote democracy.
For example, charitable organizations affiliated with financial services giants Fidelity, Vanguard, and Charles Schwab earlier this year blocked contributions to the Southern Poverty Law Center. This action followed the Trump Justice Department indicting the anti-hate watchdog on charges of financial crimes, which independent organizations criticized as politically motivated. The Southern Poverty Law Center has requested the charges be dropped, citing vindictive prosecution.
However, the IPS report also noted that some foundations have shown solidarity with groups facing such attacks. In Ohio, FBI agents conducted a statewide sweep in June targeting the Ohio Organizing Collaborative, a group that promotes voting rights for historically disenfranchised communities. Democracy Fund President Joe Goldman commented that such actions represent a coordinated effort to raise the cost of every part of the democratic process. Goldman observed that manufactured fears of fraud appear to be used to expand political control over elections, particularly as President Trump had previously raised concerns about widespread election fraud while his administration dismantled institutions meant to prevent threats.
