What happens when a major foundation president decides to speak out boldly during a crisis? How can philanthropy surge resources to protect nonprofit workers facing unprecedented job losses? In this season finale of the Fund the People Podcast, host Rusty Stahl sits down with John Palfrey, President of the John D. and Catherine T. MacArthur Foundation, to explore how courage becomes contagious in times of sector-wide attacks. You'll discover the real math behind foundation payout increases, learn why one foundation moved from 5% to 6% giving (adding $150 million over two years), and understand the strategic thinking behind multi-year general operating support.
Palfrey shares the behind-the-scenes story of how MacArthur Foundation responded to federal cuts targeting nonprofits—from increasing their payout rate to joining solidarity campaigns that have gathered nearly 700 institutional signatures. He offers frank "real talk" about the trade-offs of long-term funding, explains why he believes in the constitutional "freedom to give," and discusses how foundations calculated that nonprofit grantees lost about 12% of their federal funding. This conversation reveals both the possibilities and limitations of philanthropic response during crisis.
As attacks on nonprofits continue through 2025, this episode provides essential insights for anyone working in or with the social sector. Whether you're a nonprofit leader wondering how to navigate funding relationships, a foundation professional considering how to increase impact, or simply someone who believes in the power of organized giving, you'll gain practical knowledge about how major philanthropy is adapting to meet this unprecedented moment—and why taking summer breaks might be the most important advice of all.
Funding for Real Change - fundingforrealchange.com (true cost initiative tools)
Season 5, Episode 7: "The Great Double Standard" (Rusty's rant about foundation overhead policies)
Season 4, Episode 10: “MacArthur Foundation Makes Changes to End Nonprofit Starvation Cycle – with Kenneth Jones, MacArthur Foundation” interview about MacArthur's indirect cost policy
Season 7, Episode 17: “Meet the Moment: A Call to Action for Funders – with Shaady Salehi, Trust-Based Philanthropy Project”
Season 7, Episode 1: “Do Funders Understand the Nonprofit Burnout Crisis? – with Elisha Smith Arrillaga, CEP” on the 2024 State of Nonprofits
HR 9495 - "The Big, Bloated Bill" (link to Congress.gov full text)
Center for Effective Philanthropy “State of Nonprofits 2025: What Funders Need to Know”
John Palfrey's guest post on CEP blog “Courage in Unity: A Funder’s Response to the ‘State of Nonprofits’” (June 3, 2025 response to the report)
Council on Foundations public solidarity sign-on campaign - (694+ institutional signatures supporting philanthropy's freedom to give)
"Meet the Moment" commitment - Trust-based philanthropy pledge (nearly 200 institutional signatures)
Bio
John Palfrey is President of the John D. and Catherine T. MacArthur Foundation, one of the nation’s largest philanthropies with assets of approximately $8 billion.
Prior to joining the Foundation, Palfrey served as Head of School at Phillips Academy Andover. During his tenure, the number of faculty members of color doubled, and the student body grew more diverse.
Palfrey was the Henry N. Ess III Professor of Law and Vice Dean for Library and Information Resources at Harvard Law School.
Palfrey served as Executive Director of the Berkman Klein Center for Internet & Society. He is founding board chair of the Digital Public Library of America, and is the former board chair of LRNG.
Palfrey has published extensively on how young people learn in a digital era, as well as the effects of new technologies on society at large. Palfrey holds a JD from Harvard Law School, an MPhil from the University of Cambridge, and an AB from Harvard College.
