Could the financial support provided by private donors bridge the funding gaps due to Trump's threats to university funding?
HOST:
The Trump administration has decided to pull funds from major sectors of government spending, with budget cuts affecting public health, environmental protection, and education among others. Harvard University is facing a freeze on more than $2 billion in federal funding as a retaliation for rejecting political oversight. The school is suing the administration, and wealthy donors are stepping up to help fill the funding gap. But what happens when public money disappears, and it's a billionaire's checkbook that's keeping things afloat? Martínez spoke with Teddy Schleifer about that. Schleifer is a reporter who covers philanthropy and political power for The New York Times.
Martínez: When private donors step in to replace public funding, what type of influence does that buy?
Schleifer: As a private institution, theoretically you are not accountable to the public. However, many of these private schools take plenty of public funding, giving the president leverage to twist them and make them beg or maybe bend the knee in a way that if they were totally privately funded, these institutions could have more freedom to give Trump the middle finger. The reality is that every kind of institution of higher ed is somewhat publicly funded, except for in extreme cases, and that gives the president of the United States leverage to withhold money.
Martínez: Outside education, we've seen foundations ramping up grant-making. For instance, former New York City mayor and billionaire Michael Bloomberg has pledged to cover U.S. funding for global climate work. Are these kinds of things stopgaps, or are donors trying to set new agendas?
Schleifer: I would argue that Bloomberg's example is an exception. What we're seeing right now is that many philanthropists are saying they cannot be the bulwark against federal funding cuts, especially in the global context. If the U.S. government is going to stop funding USAID, which takes around $40 billion a year to operate, there's no foundation in the world or no rich person in the world who could come up with that sum to be the replacement funding. So, I don't even know if they're even stopgaps. The charitable sector seems to believe that they can't cover Trump's subtractions.
Martínez: What do big-time donors worry about right now? Are they genuinely concerned about public services collapsing or are they maybe more focused on protecting their causes and reputations?
Schleifier: Many philanthropists are torn because they want to speak up enough to protect grantees from Trump but don't want to speak up too much, lest they attract Trump's unwanted attention. Institutions like the Gates Foundation are concerned about grantees facing existential threats due to the Trump administration's budget cuts, but they don't want to say too much because they don't want to become targets themselves.
Martínez: Are we seeing a permanent shift here, where public services increasingly depend on private donors?
Schleifer: While this has been true in some places for a while, a shrinking public sector can reward and empower a private sector and a billionaire class that is richer than ever, but it comes with trade-offs. Sometimes, philanthropists defend themselves by saying they'd rather put their money to use rather than spend it on yachts, but that can complicate matters, as they may use their newfound power to place their own business interests alongside those of their grantees. If the public sector is shrinking, wouldn't it be better to have the private sector involved than not? This argument is often made by wealthy people, but it assumes that private philanthropy would always act in a way that benefits the public interest.
- The Trump administration's budget cuts, affecting sectors like public health, environmental protection, and education, raise concerns about a permanent shift towards increased reliance on private donors for funding.
- Harvard University, facing a freeze on federal funding, has filed a lawsuit against the administration and is receiving help from wealthy donors, showcasing how private donations can partially fill the funding gap left by government withdrawals.
- According to Teddy Schleifer, a reporter who covers philanthropy and political power for The New York Times, as private institutions, schools are not typically accountable to the public, but they may still face political pressure when they receive public funding.
- Schleifer also stated that many philanthropists are not able to cover federal funding cuts, such as those affecting USAID, which operates on around $40 billion a year.
- Donors are torn between protecting grantees from Trump's budget cuts and avoiding attracting Trump's unwanted attention, with institutions like the Gates Foundation expressing concerns about grantees facing existential threats due to the cuts.
- While some argue that a shrinking public sector could potentially benefit from increased involvement of the private sector, there is a risk that private philanthropy may not always act in the public interest, potentially complicating matters when business interests align with those of grantees.
