Democracy in Crisis, Funding on Autopilot: What New Data from Democracy Fund and PACE Reveals

Survey data from Democracy Fund and PACE shows near-universal pessimism among democracy funders—almost all see U.S. democracy as threatened and 88% say it is “broken”—yet 75% still plan to maintain or increase giving in 2026. Funders are skeptical of their own effectiveness, citing weak strategies rather than poor coordination. Funding is shifting toward defensive priorities such as election protection, civil-society safeguards, and counter-authoritarian work, with less support for grassroots organizing. While two-thirds are open to collaboration, barriers include institutional misalignment, strategic rigidity, and limited collaboration skills. Experts urge grant-seekers to show strong analysis, tap regional and family foundations, and use bridge-building language—guidance directly relevant to NCDD practitioners navigating the current funder landscape. 

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Recent survey data from Democracy Fund and PACE (Philanthropy for Active Civic Engagement) reveals a striking paradox in democracy philanthropy: while funder pessimism regarding American democracy has reached unprecedented levels—with nearly 100% of surveyed funders believing democracy is under threat and 88% describing the system as "broken and in need of fundamental reform"—financial commitments to the sector remain stable with 75% of funders planning to increase or maintain democracy-related giving in 2026. The data, collected between September 2024 and September 2025, shows satisfaction with U.S. democracy dropping from 81% dissatisfaction in fall 2024 to nearly universal dissatisfaction by September 2025, yet notably zero funders reported plans to pause giving entirely despite the crisis. This disconnect between sentiment and action reflects funders' growing self-criticism about their sector's impact: only 43% are optimistic about philanthropy's role in strengthening democracy, 60% believe the sector lacks necessary strategies for success, and 52% characterize philanthropic efforts over the last decade as "largely unsuccessful," though 60% believe philanthropy is "effectively coordinated"—suggesting failure stems not from lack of communication but from ineffective strategy.
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The surveys identify clear shifts in funding priorities as democracy work becomes more defensive, with support coalescing around countering authoritarian threats and extremism, supporting free and fair elections, and building effective governing institutions—while grassroots organizing has seen notable decline in prioritization relative to more immediate institutional and defensive threats. A PACE survey of approximately 85 grantmakers identified three primary "pulse points" where institutions are most willing to act: threats to elections (81% already have experience, 78% open to collaboration, focused at national and state levels), clampdowns on civil society (60% have prior experience, 66% open to collaboration, interest evenly split across national/state/local levels), and information disorder addressing misinformation and disinformation (strong experience levels with highest "unknown" factor suggesting integration into other portfolios, primarily local-level focus, with 40% expressing no interest in any other issue indicating highly specialized funder subset). Election-specific funding shows particular momentum, with 68% of funders and pooled funds expecting to increase 2026 midterm contributions relative to 2022, and approximately 60% planning to increase or maintain funding relative to the 2024 general election.

The concept of "funder solidarity"—the field's ability to respond in organized, collective fashion—emerges as critical for resilience, with two-thirds of funders expressing willingness to collaborate despite significant barriers including internal misalignment between staff, leadership, and boards regarding "threat level" or political perception of democracy work, strategic rigidity from recently completed long-term plans, and skill gaps around collaborative funding. For funders to "lock arms" with others, they require values alignment with trusted partners sharing the same underlying value system, "big tent" approach including center-right, center-left, and nonpartisan voices, proof of efficacy with high threshold for evidence that collective action will produce tangible difference, and risk mitigation addressing concerns less about personal retribution and more about whether being "targeted" will impact long-term ability to support specific communities. Experts advise grant-seekers to demonstrate strong analysis of the moment articulating what is happening and what must be done, harness the "long tail" of untapped regional and family foundations concerned about democracy but lacking clear entry points, and use "bridgy" language referencing the Constitution or "Office of Citizen" to maintain conversations across political divides and attract broader funder range—while acknowledging significant foundation staff turnover over 1–2 years has strained relationships and slowed resource movement alongside growing funder concern about grantee burnout.