The Greater Milwaukee Foundation Distributed \$96.9 Million in 2025 — Its Largest Annual Total in 110 Years. The Federal Retreat Is Reshaping What Community Foundations Are Being Asked to Be, and the Milwaukee Numbers Are the Clearest Early Indicator.

The Greater Milwaukee Foundation reported on June 9 that it distributed $96.9 million in grants during 2025 — the largest annual disbursement in its 110-year history. The number itself is unremarkable in absolute terms; several U.S. community foundations distribute more in a typical year. What makes the Milwaukee report worth examining as a signal rather than a local story is the foundation's explicit framing of the surge: "As our region experienced multiple crises — from damaging floods to food shortages to significant gaps in federal funding for nonprofits affecting housing and many basic services — the community answered with conviction."

That sentence is doing structural work. The Greater Milwaukee Foundation is one of the oldest community foundations in the United States, with cumulative grants of more than $1.33 billion since 1915 and a service-area orientation that has remained tight over its history (71 percent of 2025 grant dollars stayed in the four-county Milwaukee region, 82 percent stayed in Wisconsin). The foundation is institutionally cautious in how it frames its grantmaking decisions, and an explicit attribution of grant-volume growth to federal funding gaps is not a casual choice. It is the foundation telling its donor base, its board, and its peer foundations that the operating environment for community philanthropy has changed and that the foundation is responding to that change.

For nonprofits that depend on a mix of federal grants, state grants, foundation grants, and individual giving, the Milwaukee numbers are an early indicator of a structural shift in community philanthropy. The strategic implications cut both ways. There is more community-foundation capital available than there was eighteen months ago, and that capital is moving toward gaps left by federal program retrenchment. But there is also more demand for that capital, the application processes look different from federal grant processes, and the categories community foundations are willing to fund do not map cleanly onto the categories federal programs historically covered.

This piece is the deeper analysis of what the Milwaukee numbers actually mean for nonprofit funding strategy in 2026. For the cross-cutting analysis of foundation giving trends nationally, see the Foundation Source 2026 Giving Outlook deep dive. For the regulatory side of the federal retreat, see the OMB Uniform Grants overhaul analysis.

What the Milwaukee Numbers Actually Show

Strip out the framing language and the underlying numbers tell a consistent story.

Grant volume rose to a 110-year high at $96.9 million, distributed across 6,184 individual grants to 2,028 distinct recipient organizations. The breakdown by category was concentrated in three areas: education at $17.8 million, human services at $16.9 million, and arts and culture at $14.2 million. Those three categories together accounted for slightly under half of total grant dollars; the remaining $48 million was distributed across community development, health, environment, civic engagement, and donor-directed grants from donor-advised funds.

The donor side also moved. New donor contributions to the foundation reached approximately $84 million in 2025, the second-highest annual giving total in the foundation's history. The combination of high inflow and high outflow is the operational signature of a foundation that is processing capital through its system at unusual velocity rather than building reserves. Over the past decade, the foundation's philanthropic assets grew 57 percent to $1.33 billion — a healthy long-term growth rate that is consistent with the broader pattern of community foundation asset growth driven by donor-advised funds.

The geographic concentration is the data point that matters most for understanding what community foundations are structurally able to do. Seventy-one percent of grant dollars stayed within the four-county Milwaukee region. Eighty-two percent stayed within Wisconsin. Community foundations are, by design and by donor preference, geographically bounded. The Greater Milwaukee Foundation cannot meaningfully fund a national rural-broadband initiative, cannot fund a national early-childhood-education program at any meaningful scale, and cannot fund federal-program substitutes that operate across state lines. When federal programs retreat in categories that have national reach, community foundations can backfill within their service areas; they cannot backfill nationally.

Why the Federal-Gap Framing Matters as a Signal

Community foundations have always responded to local crises. Floods, food shortages, and acute needs are within the foundation's traditional response mandate. What is unusual in the Milwaukee framing is the explicit attribution to "significant gaps in federal funding for nonprofits affecting housing and many basic services" as a driver of grant-volume growth. Community foundations have historically been careful about how they frame their relationship to federal programs, in part because they do not want to be seen as substitutes for federal action and in part because their donor bases include people on both sides of the political questions about the appropriate scope of federal social programs.

The Milwaukee framing is an inflection point of sorts. The foundation is publicly acknowledging that federal program retreat is reshaping the operating environment for the nonprofits it funds and that its grantmaking is responding to that retreat. The Foundation Source 2026 Giving Outlook (deep analysis here) makes the same point at the private-foundation level: private foundations are increasing payout rates, and the increase is being driven in significant part by board responses to the federal retreat. The Milwaukee data shows the same dynamic playing out at the community-foundation level.

What this means structurally is that the U.S. philanthropic sector — both private foundations and community foundations — is increasingly being asked to absorb federal-program gaps in ways the philanthropic sector was not historically designed for. Private foundations have payout floors at five percent of assets; the historical payout pattern was for foundations to distribute roughly that floor with marginal additional grants in years of unusual need. Community foundations distribute donor-advised-fund grants at the direction of donors and discretionary grants from unrestricted assets at the direction of the foundation's board. Neither structure was designed to be a primary funder of housing, basic services, or other categories that have historically been federal-program funded at scale.

The capacity gap matters. Federal HUD and HHS housing programs collectively distribute on the order of tens of billions of dollars annually. The entire community foundation field in the United States distributes roughly $14 billion annually across all categories. Even a dramatic surge in community foundation grantmaking in housing-related categories cannot meaningfully substitute for federal-program capacity. What community foundations can do is keep specific local nonprofits operating through specific gaps, which is what the Milwaukee report shows is happening.

Strategic Implications for Nonprofits in 2026

For nonprofits that have been funded primarily through federal grants and are facing gaps in 2026, the Milwaukee data suggests a clear strategic shift but does not suggest that community foundation funding will fully replace federal funding. Three implications follow from that.

The first implication is that the operational pivot to community foundation fundraising is real and worth making, but the realistic expectation is partial replacement of lost federal funding rather than full replacement. Nonprofits that have been getting a single $500,000 federal grant and are now looking at community foundations for replacement should expect to be looking at multiple smaller grants from multiple foundations rather than a single replacement grant of equivalent size. The Milwaukee data shows 6,184 grants to 2,028 organizations from $96.9 million, which works out to an average grant size of roughly $15,700 and an average per-organization total of roughly $48,000. Many grants are larger and many are smaller, but the modal community foundation grant size is structurally much smaller than the modal federal program grant size.

The second implication is that geographic alignment matters more than it did under a federally funded model. Nonprofits that operate nationally or multi-regionally cannot replace federal funding with a single community foundation relationship; they need to build relationships with multiple community foundations across their service areas, and each relationship is bounded by the relevant foundation's geographic mandate. National advocacy organizations, national membership organizations, and nonprofits whose work crosses state lines face a harder structural problem than locally bounded nonprofits.

The third implication is that the relationship-building work matters more than the proposal-writing work in community foundation fundraising. Community foundations make grant decisions through a combination of donor-advised-fund recommendations from individual donors and discretionary board decisions on unrestricted assets. Building a relationship with the foundation's program staff, with the foundation's individual donor base, and with the donor-advised-fund holders who direct giving through the foundation is more important than writing strong individual proposals. Nonprofits that approach community foundation fundraising the same way they approach federal grant applications — with a heavy emphasis on the written proposal and minimal relationship investment — will be selected against.

What to Watch in the Second Half of 2026

The Milwaukee report is a Q2 2026 data point. Several questions are worth watching as more community foundations report their 2025 grantmaking and as 2026 grantmaking patterns become clearer.

The first question is whether the federal-gap framing spreads. If other large community foundations begin attributing grant-volume growth to federal program retreat in their public communications, that signals a sector-wide acknowledgment of the structural shift. If the Milwaukee framing remains an outlier, that suggests the sector is still resolving how it wants to position itself relative to the federal retreat.

The second question is whether the 2025 grant-volume surge sustains into 2026. The Milwaukee numbers describe 2025 grantmaking, not 2026 grantmaking. Community foundations have substantial discretion over the timing of grant disbursements from donor-advised funds; a 2025 surge could reflect donor decisions to accelerate giving in response to acute need, with subsequent years returning to baseline grant volumes. The 2026 reports, which will be published in mid-2027, will show whether the surge is structural or transient.

The third question is whether donor-advised-fund inflows continue to support the higher payout rates. The $84 million in 2025 new donor contributions to the Greater Milwaukee Foundation is structurally tied to donor preferences, tax incentives, and the broader economic environment. If new donor inflows slow in 2026 or 2027, community foundations cannot sustain elevated grant payout rates without drawing down assets.

The fourth question is whether the categories community foundations are funding adjust in response to federal-program movements. The Milwaukee 2025 numbers show education, human services, and arts and culture as the top three categories. Housing-specific grant volumes, environmental program grant volumes, and other categories most affected by federal retrenchment will be the data points to watch in 2026 reporting.

What the Milwaukee Numbers Do Not Tell Us

A few things the Milwaukee report does not address are worth flagging.

The report does not break down grantmaking by donor-advised-fund recommendations versus discretionary board decisions. That distinction matters because the two streams respond to different signals: donor-advised-fund grants follow individual donor preferences, which are heavily influenced by direct relationships with nonprofits and by donors' personal philanthropic priorities. Discretionary board grants follow the foundation's strategic priorities and respond more directly to assessments of community need. Without the breakdown, it is not clear how much of the 2025 surge was board-driven and how much was donor-advised-fund-driven.

The report also does not break down grant durations. Multi-year grants and one-year grants behave very differently from a recipient's planning perspective. A nonprofit that receives a three-year operating grant of $300,000 ($100,000 per year) is in a structurally different position than a nonprofit that receives a single one-year grant of $100,000, even if the year-one dollar amounts are identical.

And the report does not address program-related investments or impact-investing activity. Community foundations have been expanding their use of PRIs and impact investments as alternatives to traditional grants. The 2025 surge in grant volume could be offset by reductions in PRI activity, or it could be additive — without the broader financial-activity breakdown, the headline grant number is incomplete.

The Structural Question for the Philanthropic Sector

The Milwaukee report is, in aggregate, a story about a community foundation responding well to a crisis in its service area. The harder structural question is what role community foundations and private foundations should play in a longer environment of federal program retrenchment. The philanthropic sector has the capacity to backfill specific gaps locally and to keep specific organizations operating through specific cycles. It does not have the capacity to substitute for federal program funding at scale, and it does not have the geographic reach or institutional infrastructure to operate as a primary funder of national social programs.

The conversation that is happening at the board level inside many community foundations and private foundations in mid-2026 is about where the boundaries of the philanthropic sector's responsibility lie in an environment that increasingly looks like the philanthropic sector is being asked to do more than it was designed for. The Milwaukee numbers do not answer that question. They do show, with unusual clarity for a foundation that is institutionally cautious in its public communications, that the question is now being asked openly.