Key Takeaways:
44.3% of foundations expect their giving to rise in 2026, per Candid's new Foundation Giving Forecast survey, the highest share since 2022.
The median foundation payout rate has stayed at 5% for five consecutive years, and Candid's research director says the IRS floor works like a ceiling.
MacArthur's 6% pledge and CHANGE Philanthropy's Level Up campaign are trying to move that number while nonprofits face closures and layoffs.
Candid published its annual Foundation Giving Forecast on Monday, and the headline reads like good news. Of 542 foundations surveyed, 44.3% expect to give more in 2026, 46.9% expect to hold steady, and only 8.8% expect a decrease. That is the most optimistic forecast since 2022, after three years when the share expecting increases ranged from 23% to 37.3%. Foundations pointed to growing assets, rising community need, and new grant programs as the drivers.
The catch is in the base numbers. Among 466 foundations that reported grant payments for both 2024 and 2025, combined giving was flat at $19.4 billion each year. Two thirds of individual foundations did give more, with a median increase of 5.8%, which works out to about 3.1% after inflation. Community foundations were the bright spot at a 14.1% median jump.
Then there is the number that refuses to move. Of 288 independent foundations reporting payout rates, 62% said theirs stayed the same and the median has now sat at 5% for five straight years, through a pandemic, market swings, and high inflation. As Grace Sato, Candid's director of research, puts it, "The IRS's 5% payout rate floor effectively functions as a 5% ceiling." The MacArthur Foundation pledged at least 6% for two years in early 2025, and CHANGE Philanthropy's Level Up pledge is pushing others to follow. So far, most have not.
The gap matters because the sector's baseline math changed this year. New charitable deduction floors are projected to pull $81 billion out of giving over a decade, and nonprofit closures are accelerating. Some funders are putting real money into open calls, but endowments growing faster than grants is the pattern to watch. Whether 2026's optimism shows up in the payout rate is the number worth sitting with.
People Also Ask
What is a foundation payout rate?
The payout rate is a foundation's qualifying distributions as a share of its net investment assets. The IRS generally requires private foundations to distribute about 5% of average asset value each year.
Are foundations giving more in 2026?
Most expect to. In Candid's 2026 survey of 542 foundations, 44.3% anticipated giving more than in 2025, the highest share since 2022, and only 8.8% expected a decrease.
Why do most foundations pay out only 5%?
Candid's data suggests the rate is a calculation rather than a strategy for the typical foundation, with the legal minimum treated as the default. The median payout has stayed at 5% for five straight years.
What is the Level Up pledge?
Level Up is a CHANGE Philanthropy campaign asking foundations to commit to paying out more than the 5% minimum, following the MacArthur Foundation's two-year commitment to at least 6%.
Sources
Candid, MacArthur Foundation, CHANGE Philanthropy