During a recent review of the Pilgrim Foundation’s U.S.-based grant applications, one theme surfaced repeatedly in conversations with our nonprofit partners: everything costs more.

Partners described higher expenses for staffing, facilities, technology, transportation, and program delivery. At the same time, many were experiencing greater demand as the communities they serve faced higher costs for housing, food, childcare, healthcare, and other essentials.

None of this was particularly surprising. In fact, the Center for Effective Philanthropy’s (CEP) “State of Nonprofits 2026” found that 73% of nonprofit leaders reported increased demand for their services, while 66% expressed concerns about their organization’s financial stability. Those findings closely mirrored what we were hearing from our own partners. Not to mention, we experience inflation in our own lives and account for changing costs in many aspects of running a foundation. We budget for rising expenses. We consider compensation changes. Our investment partners think about real returns, not simply nominal ones.

But those conversations prompted us to look at one place where we had not been thinking about inflation nearly as intentionally: our grants.

Several of our long-standing nonprofit partners had received the same grant amount for multiple years. We had viewed that consistency positively, while also making larger adjustments in years when strong investment returns gave us greater capacity to give. These were organizations we trusted, whose work we valued, and with whom our relationships had deepened over time.

Looking Beyond the Dollar Amount

We had a rather obvious realization: while our commitment to these partners had deepened, the purchasing power of our grants had quietly diminished. Inflation had been changing what those same grant dollars could accomplish.

As we reflected on these questions, we came across a CEP blog on the same topic. The article reinforced what we had begun to recognize through our own conversations with nonprofit partners and affirmed that preserving the real value of grants is an important conversation across philanthropy. The article challenged funders to consider not simply whether grants remain consistent in nominal dollars, but whether they continue to provide the level of support originally intended as inflation erodes their real value over time.

Read the full article about inflation and consistent grantmaking by Jackie Daniel and Manivanh Khy at The Center for Effective Philanthropy.