Quarterly Research Roundup | October 2026

📊 What We’re Tracking: Policy and Research

(Op-Ed) Is the Era of Foundation Dominance Coming to a Close?
Philanthropy Project| Sept 2026

• New wealth is moving out of traditional foundations and into DAFs, and other vehicles with minimal rules, no payout requirements, and far less transparency. As a result, foundations are becoming less central to where charitable-intent money resides. 
• DAFs now rival foundations in scale and influence, distributing over $50 billion annually and absorbing billions from foundations into private accounts with no disclosure or payout obligations. This makes it harder to see, track, and deploy charitable dollars. 
• Today’s wealthy donors are younger, more private, and less driven by charitable tax deductions, often funding personal or family‑focused projects rather than broad public benefit (e.g., fund technology solutions, longevity research, and private education).
• Philanthropy debates remain static and focused on staffed foundations, even though much of the wealth for charitable‑intent now sits in vehicles with far less accountability.
• Nonprofits are adapting by prioritizing mega‑donors, relying more on government funding, and competing with private equity in fields traditionally served by nonprofits.

Trust in Nonprofits and Philanthropy
Independent Sector | July 2026

• Compared to last year, trust in nonprofits remains stable, with 56% of respondents reporting high trust while trust in philanthropy declined from 33% to 29%. Half of respondents believe nonprofits are making things better in America, which is more than double who say the same about large businesses, corporations, or the federal government (each around 20%). 
• Trust in nonprofits is also more bipartisan compared to other institutions: 64% of Democrats and 58% of Republicans report trusting nonprofits. This is a much narrower gap than seen for institutions like the military, law enforcement, businesses, the federal government, and the news media, where trust levels diverge more distinctly by party.
• Most respondents believe nonprofits are trying hard to have a positive impact on society (79%) and are good at what they do (76%). 
• Transparency remains a major driver of trust in nonprofits: 74% of respondents are more likely to trust nonprofits that clearly explain how funds are used, and 73% are more likely to trust nonprofits that disclose their sources of funding.
• On AI, expectations of nonprofits are high across disclosure, use, and privacy protection. Specifically, 76% believe nonprofits should clearly disclose when and how they use AI; 72% say protecting client data privacy is more important than maximizing AI efficiency; and 71% believe the sector should adopt AI cautiously.

Evolving Foundation Responses to a Sector in Crisis
The Center for Effective Philanthropy | Sept 2026

• The report shares updated data on how foundations are adapting their strategies and practices, and shares insights about the nonprofit experience in response.
• Foundation payout rates remain relatively static, with two‑thirds keeping payout levels unchanged. The one‑third that increased payout rates cited rising need and multi‑year commitments that lock up available dollars, requiring giving above the 5% minimum.
• Risk aversion is shaping funding decisions more than strategy or need. Over half of foundation CEOs (53%) cite risk aversion—from boards wanting to “stay neutral” to concerns about political or legal exposure. Nonprofits see this too: only 12% say funders are taking risks that meet urgent needs, describing a “wait‑and‑see” mindset from them.
• About 10% of foundation CEOs reported ending initiatives or reducing funding. One CEO specifically shared exiting their immigration portfolio because “there is not a window in the near term for positive policy change.” This can signal how current context and policy landscapes are driving retreat from certain issues.
• Major gaps persist in “beyond‑the‑grant” support, especially around technology, AI, legal needs, and fundraising.
  • 47% of nonprofits say AI/digital tools support would be most valuable; only 13% of foundations provide it
  • 45% of nonprofits want general legal counsel; 24% of funders provide it
  • 33% of nonprofits want cybersecurity support; 14% of funders provide it
  • Most notable, 60% of nonprofits need fundraising strategy support while 41% of funders report providing support to assist in fundraising. 
• Communication between nonprofits and funders is strained with only 41% of nonprofits feeling they can be fully honest with funders, and just 23% rating foundation communication as “very effective.” Fear of funding loss and limited opportunities is highlighted as a barrier for candid, proactive communication with foundations.

Information Costs and the Impact of Charitable Giving
Mitchell, Xu, and Li | April 2026

• This article summarizes an online study examining whether donors give more efficiently when someone else pays for the cost of gathering information about nonprofit performance. In this context, efficient giving means directing donations to nonprofits that create more social benefit per dollar, thus making the donation more cost-effective.
• The study tested whether removing the cost of acquiring performance information leads donors to make more informed, higher-impact giving decisions. Overall, when donors did not bear this cost, their giving became more effective, increasing donation impact by about 13%.
• The study also found that donors were less likely to seek out performance information as the cost of obtaining it increased. Donors were more willing to get this information when it was less costly for them or when another donor covered the cost, but that dropped as the cost rose.
• Among donors who did acquire information, most chose one of the more efficient nonprofits — but not always the top performer. Some selected the second‑best option or even one of the least effective ones. The authors suggest this may happen when donors misunderstand the data or prioritize nonprofit “need” over efficiency, such as donating to a lower‑performing nonprofit in hopes of improving its weaker results.
• In the real‑world, donors rarely have access to clear, easy‑to‑use performance information. The study notes that detailed cost‑effectiveness data is rare outside controlled experiments, and most donors rely on weak or confusing performance signals instead. This suggests that “information intermediaries” may need to play a stronger role in making sense of information.
• Finally, the authors emphasize that information is costly, and placing that cost on donors leads to inefficient giving and forgone social impact. They argue that subsidizing evaluation and performance information could meaningfully improve sector‑wide outcomes. They recommend that policymakers, funders, donor‑advised funds, and nonprofits invest in evaluation, standardize reporting, and make performance data easier for donors to access and understand.

🗣️ From the Field: Webinar and Events

Understanding the 2027 California Budget
CalNonprofits | August 6, 2026

• California’s budget relies heavily on state-generated revenue, which accounted for roughly two-thirds of the 2025–26 State Budget. Most state revenue comes from personal income, sales and use, and corporation taxes. As a result, state revenues tend to rise during periods of strong economic growth and decline during downturns.
• State spending is concentrated in core public services. Nearly three‑quarters of state dollars support health and human services (43%), K–12 education (52%), and higher education (7%). About 80% of federal funds flowing through the state budget also support health and human services.
• The 2026–27 enacted budget, released in June 2026, delays or rejects many of the harmful cuts proposed in the May Revision. It raises new revenue through several commonsense measures and increases funding for food assistance, health care, and homelessness programs. However, it does not fully offset the impacts of federal H.R. 1 cuts and falls short of advancing the bold revenue solutions needed to protect essential services.
• Key revenue actions from the budget include capping business tax credits, applying sales tax to digital software, and directing the Department of Finance to explore legislation in 2027 to create a tax structure for large employers whose workers rely on Medi‑Cal because the employer does not offer coverage.

2026 Ballot Measures: What They Mean for Nonprofits and Philanthropy
California Policy Forum | September 15, 2026

• Speakers opened with an overview of the unusually large number of 2026 ballot measures (14 total) and the broad policy areas they cover.
• Tax & Revenue Measures (Prop 40, 41, 42, 3):
  • Discussed how Prop 40, a proposed wealth tax, would interact with anti-tax measures such as Propositions 41 and 42, including what would happen if one measure passed and invalidated another measure on the ballot.
  • Covered Prop 3 as a continuation of existing tax increases on high‑income Californians to fund education and essential services.
  • Measures either expand or constrain future revenue‑raising capacity.
• Civic Participation Measures (Prop 39 & Prop 4):
  • Prop 39: Voter ID requirement would lead to disenfranchisement, privacy issues, and costly implementation for an issue where evidence demonstrates no widespread election fraud.
  • Prop 4: Goal of removing the ban on public financing of campaigns to reduce the influence of wealth and corporate interests.
• Housing & Public Investment (Prop 1):
  • Discussed the statewide housing bond, its polling strength, and how bond financing works (borrowing now, repaying over decades).
• Walked through voter guides, breakdowns, and resources to help nonprofits explain complex measures without needing to endorse them.
• Nonprofits can take positions on ballot measures. Even without endorsing, nonprofits can explain implications and help voters understand what’s at stake. Groups with limited capacity should plug into statewide advocacy networks.

🛠️ Nonprofit Toolkit

🧭 Bill Watch

CalNonprofits is proud to share that several of our sponsored and supported bills have passed, bringing reforms to the Charitable Registry, new nonprofit protections, stronger support for donor intent, and more.

Track all of CalNonprofits’ positions and real‑time bill updates here.

🔍 Data Spotlight

87% of Californians reported benefiting from a nonprofit service in the last 12 months, according to our most recent California Resident Survey.

Source: Causes Counts 3.0 – Release upcoming