How will Trump’s policies impact funding for UK arts?

There is a great deal of uncertainty in charity funding presently and further turbulence has arrived in the form of President Trump’s second term of office in the White House.

It usually follows that the UK fundraising landscape lags three to five years behind fundraising trends in the United States. So we certainly need to be mindful of the implications of current policy.

‘Clearing significant waste’

On his return to office in January, Trump announced an immediate 90-day review of foreign aid programmes, freezing funding for the duration. The freeze was challenged in court and lifted late in February, but substantial cuts were made, including a mass termination of existing contracts, and placing 4,200 USAID staff on leave, with a further 1,600 being sacked.

Trump’s memo said officials were “clearing significant waste stemming from decades of institutional drift”. The speed of the termination of contracts makes resumption of activity very difficult, even if decisions are ultimately overturned.

The US is the largest funder of global humanitarian work, spending $68bn on foreign aid in 2023. So these cuts will have a dramatic impact on charities. This can already be seen in Norwegian People’s Aid, a charity working in war zones, which is suspending its work in 12 countries and laying off 1,700 staff. Similarly, Save the Children, has warned it may be forced to cut staff and services as it receives more than half of its funding from USAID.

Confusion and delays

Trump also froze all federal grant funding, cutting off non-profits that deliver work under government contracts. While the cut was blocked by two federal judges and only lasted two days, it caused confusion and delays for many organisations.

For example, there are areas still unable to distribute funding, including the US National Institutes of Health (NIH) – the largest public funder of biomedical research in the world – and World Vision which faces the prospect of making mass redundancies.

Charities and organisations in receipt of federal funding have been trying to protect themselves from funding cuts by axing work relating to Diversity, Equity and Inclusion (DEI), the removal of support for which has been a key target of the Trump administration. For example, some organisations have removed pages of support for LGBTQ+ domestic violence victims in the hope of safeguarding their core funding.

Impact on arts and culture

There has already been an impact of these policies on arts and cultural organisations in the US. The Art Museum of the Americas has cancelled two shows with the Trump administration determining the events as a “DEI programme and event”. Similarly, the President’s order to close DEI offices, saw the Smithsonian and National Gallery of Art close theirs. Both are home to federal employees.

The National Endowment for the Arts has also been barred from using federal funds for the promotion of ‘gender ideology’, leading to it being sued by several arts organisations.

Furthermore, Trump made himself chair of the John F. Kennedy Center for the Performing Arts in February, to move the institution away from its ‘woke culture’, with a corresponding move to reshape the Center’s programming and governance structure, as trustees are presidential appointees.

Response from funders

Several large US philanthropic bodies have responded by increasing their grant making. The Robert Wood Johnson Foundation has committed to increase investment in diversifying healthcare and the MacArthur Foundation has committed to increase its giving by $150m over the next two years.

Philanthropists are stepping up in other areas as well. Bloomberg Philanthropies is offering increased support and will “ensure the nation’s funding and reporting obligations to the UN Climate Change Secretariat are met”, following US withdrawal from the Paris Climate Agreement.

However, despite increased giving, philanthropists and foundations will not be able to plug all the gaps left by federal funding cuts. The most recent report from the Council of Foundations showed foundations gave $8bn internationally compared with $49bn in US foreign assistance.

What this means for UK charities

While the UK is unlikely to mirror US policy, there will undoubtedly be an impact, including sanctions on trade which could include cultural imports.The impact of US funding freezes will also mean UK charities may struggle to join collaborative global efforts on aid. Additionally, if the UK mirrors areas such as improving government efficiency, there could be major impacts on staffing at statutory funding bodies too.

In terms of funding for the arts, we can expect additional pressures as cuts to UK-based NGOs mean these charities will likely start vying for existing funding streams across statutory, trust, philanthropic and corporate sources – creating more competition.

Similarly, foundations and philanthropists may shift to shore up areas such as DEI and the environment where gains in these areas might otherwise be lost. There is already pressure on the UK aid budget, with the UK government reducing it to its lowest percentage since records began, from 0.5% of gross national income to 0.3% by 2027.

The speed of change is a cause for concern for arts organisations. At times of hardship, we struggle to make the case for the work against humanitarian and healthcare causes. And if the agendas of public institutions become politicised, the independence of artistic work and freedom of speech can become compromised.

There are already risks to freedom of speech, resulting from issues about the reputational risks of receiving certain types of funding. These range from the provenance of philanthropic funding through to the alignment of particular corporate brands with artistic work. This piles pressure on existing funding sources and potentially creates barriers for next generation supporters, meaning donors might feel unfairly singled out for the origins of their wealth.

How to respond?

In strategic terms, organisations that fair best amid this sort of backdrop look at three areas simultaneously – the past, the present and the future.

• The past: In times of turbulence, it can prove beneficial to refocus attention onto core purpose. We know the intrinsic benefits of the arts but there is nothing so important as remembering why an organisation exists and refocusing communications on what it stands for and why it is both urgent and relevant to the present context.
  
• The present: It is extremely tough to ride out a challenging funding environment organisation by organisation. A united stand is needed in relation to the urgency of creating brilliant art, as well as advocating for future funding and communicating its impact. This includes defending decisions about the reputational risks of funding and offering support to those that find themselves in the limelight for the wrong reasons. We must also be aware of the funding areas likely to face the most volatility – such as repurposing of trust funding and philanthropic funds. As was the case with Covid, charities need to work harder than ever to maintain and develop connections with existing funders. Economic volatility is felt widely and donors need to know as acutely as ever how their donation is helping and what impact it is having. Good news stories with a human interest enable donors to stay connected to organisations and to act as advocates.
  
• The future: A vision helps keep organisational purpose alive. Boldness in communications is vital, however fragile we might feel. Conveying the future state of an organisation, the longevity of its work and why its sustainability is important is essential for the confidence of funders and audiences alike. Organisations that confidently articulate new business models, how they will create jobs and adapt to the current context, utilising the potential of technologies such as AI, will win the ear of funders.

In the period up to 2030, we are unlikely to see radical changes to fundraising methodologies. However, the mix of funding available will undoubtedly be squeezed. Being true to purpose, collaborative in our action and setting a bold vision for the future, is an essential response to an uncertain picture.