As the national housing crisis continues to rage, the role of one historically essential player in the affordable housing system — philanthropy — is evolving in significant ways. In prior decades, national foundations essentially built the current affordable housing system by driving the design and delivery of federal policies and incentives. As the locus of reform shifts from the federal government to a mix of public, private and civic actors, philanthropies can once again shape the sector if they embrace the urgency of the moment and help catalyze and capitalize ground-up solutions.
Housing affordability is inextricable from philanthropy’s stated missions, even when not explicitly mandated as a goal. For foundations focused on economic mobility, reducing cost burdens and increasing housing choices enhance career opportunities and wealth building. For those focused on environmental concerns, housing density, transit-oriented development and energy-efficient housing reduce carbon emissions. For those focused on health, quality housing is a key social determinant.
In the late 20th century, philanthropy helped shape many of the institutions and tools that still define community development today. Foundations supported the coalition that led to the Community Reinvestment Act (CRA), helped seed and scale community development corporations (CDCs), backed the creation of national intermediaries such as LISC and Enterprise, supplied the patient capital that evolved community development lenders into community development financial institutions (CDFIs), drove regional institutions to build community foundations, and built syndication platforms to make the Low-Income Housing Tax Credit (LIHTC) workable at scale.
More recently, the role of philanthropy in housing has been all-over-the-map and often stymied by uncertainty on how best to engage. Some institutional philanthropies fear housing investment, thinking of it as an endless, capital-intensive rabbit hole. Certain national philanthropies find the problem too regionally bespoke to address on a national scale. Some are caught in between Yes in My Backyard (YIMBY) supply-oriented prioritization and tenant-protection guiding principles. Still others have seen the segmentation of endowment and mission restrict their housing options to less impactful, small-dollar grantmaking rather than asset-heavy investment.
For decades, foundations helped finance not just housing programs, but the institutions and capital structures that made housing production possible. These interventions operated within a system that reliably “looked up” to an engaged federal government. Today, that organizing principle is weaker. The federal government continues to be a critical partner, with enactment of the bipartisan 21st Century ROAD to Housing Act and increases in LIHTC in the 2025 reconciliation act being the two most prominent examples of action during the 119th Congress. But countervailing actions — including the reduction in HUD’s workforce, the Administration’s dramatically scaled back housing budget proposals, the assaults on consumer protections and fair housing enforcement, and increased interference with Fannie Mae and Freddie Mac governance — have made the federal government an inconsistent and unreliable player.
In the meantime, ambitious solutions are being advanced at the state and local level and in the private sector. As the centralized system is stymied, regional family foundations and community foundations are pioneering new efforts to build affordable housing at scale. A wave of “new money” philanthropists is looking nationally to support and rebuild the housing market. Some efforts exclusively focus on income-restricted housing, while others seek to address market-rate production. National philanthropies have the balance sheets to enhance the credit of local philanthropies and other financial institutions, and the agility to find and routinize the best local solutions.
The challenge that now faces philanthropy’s role in housing is to build and support a ground up system that works for the whole country by adapting to the country’s regional variance — not just a top-down system driven by the federal government. This is no small task: the new system must be distributed across fifty states, thousands of cities and counties, and a fragmented private sector. It must contend with a multi-dimensional challenge driven by policy failures, out-of-control costs, and evolving demand. It faces a supply crisis, a fairness and opportunity crisis, and a quality and geography crisis, all rolled into one. Uncertainty in the face of this challenge is an understandable response.
But green shoots of a new housing system backed by a new form of philanthropic impact are emerging. The time is now for national philanthropy to boldly lead in supporting and scaling the innovation of their local peers.
A Brief History of Housing Impact
Philanthropic engagement in housing has historically been most powerful when it focused on pushing federal reforms, building institutions and organizing capital. The decades from the 1960s to the early 2000s could be categorized as philanthropy’s “community reinvestment” era.
In the 1960s, foundations — most notably the Ford Foundation — invested in community development experiments that led to the creation of community development corporations, locally rooted organizations capable of building and managing housing.
In the 1970s and 1980s, foundations helped combat redlining by supporting the enactment of signature federal laws like the Home Mortgage Disclosure Act and the Community Reinvestment Act. They also created national intermediaries such as LISC and Enterprise, which provided financing, technical assistance, and organizational support to nonprofit housing developers across the country. LISC and Enterprise became the backbone of the modern affordable housing ecosystem. Philanthropies backed and ultimately operationalized the Low-Income Housing Tax Credit, which was created as part of the 1986 tax bill. LISC and Enterprise remain essential pillars of today’s largely LIHTC-driven affordable housing system.
In the early 1990s, major foundations including Ford, Rockefeller, and MacArthur pooled capital with banks, insurers, and HUD to power a group effort, ultimately called Living Cities. The effort deployed hundreds of millions of dollars to strengthen national intermediaries like LISC and Enterprise and expand community development finance. It was a rare example of philanthropy acting collectively to organize capital at scale. These initiatives reflected a broader view of housing as part of a larger community development and economic development system. Living Cities represented more ambition than a traditional grantmaking collaborative. Twenty-two of the country’s largest foundations and financial institutions, along with HUD, pooled capital into a single vehicle and deployed hundreds of millions of dollars not as grants but as patient capital: below-market loans, equity investments, and credit enhancements designed to unlock multiples of private and public financing.
Foundations played a parallel role in community development finance. They supported early community loan funds and development banks, then helped shape the architecture for federal support. The concept paper that helped lead to CDFI legislation was commissioned by the MacArthur Foundation, and the CDFI Fund’s equity investments helped CDFIs build their balance sheets and leverage private capital. Today, the field includes over one thousand certified institutions holding hundreds of billions in assets.
There are other examples of foundations building networks of key stakeholders, outside of federal incentives. In 1988, for example, the W.K. Kellogg Foundation offered Michigan’s community foundations a challenge grant of up to $1 million each, contingent on a 2:1 local match to build their own endowments. By close, every community in Michigan had access to a community foundation, covering all 83 counties. This offers a precedent for what this moment requires: a national foundation deploying its capital to build durable regional capacity.
The history lesson is instructive. Over the decades, philanthropy became a genuine market builder. Major foundations created new institutions, organized scaled capital, and had a direct influence on meaningful new housing production. But a large part of what made that possible was an engaged and responsive federal government.
Being Catalytic Again in the Wake of the Global Financial Crisis
Since then, philanthropy’s relationship with housing has changed. First, the nature of the problem has evolved. The Global Financial Crisis resulted in changing lending standards, a severe supply shortage across all product types, and a vast reduction in the country’s homebuilding capacity. The COVID pandemic led to increased demand, as new households formed and required more space in specific locations. In recent years, more households have become cost-burdened and severely cost-burdened. In 2026, it is now widely accepted that the housing affordability crisis, once limited to a few coastal cities like Boston and San Francisco and to very low-income households, has spread across the country and up the income scale.
All the while, philanthropy’s modus operandi has changed. Large philanthropies increasingly adopted professional investment models for endowment management. In response to tax reforms, investment portfolios became more sophisticated and more distinctly detached from mission. This division between capital and mission meant endowments were managed for financial return, while social impact was pursued through grants, program-related investments, and mission-related investments. Other trends such as modern portfolio theory and institutional endowment models like Yale’s contributed to these clearer dividing lines and prioritization of return-maximizing endowment capital.
In most sectors, this division is manageable; in housing, it is consequential. Housing is an asset-heavy and capital-intensive industry with lagging productivity. True change in the industry comes not just from program investment and research, but from credit enhancement, scaled investment, construction innovation and systems building. Marginal dollars are simply incapable of addressing the significant supply-demand imbalance the country faces.
On top of this, the system is now more distributed than ever, so simply pursuing the playbook of federal reform is necessary but not sufficient. Philanthropies helped seed the ROAD to Housing legislation, but the bill did not appropriate funding and will soon hit its limits without corresponding implementation efforts. The housing system, with philanthropy’s help, must evolve from being overly oriented towards the federal government to supporting change across the whole country. A federal system is uniform, decided by a small subset of people, determined by legislation, and driven by advocacy. A country-wide system has distributed innovators, a broader toolkit, customization to place, codification of what works, and rapid scaling and diffusion. Philanthropy, like the system itself, must adapt to this national reality.
Regional Crises and Regional Solutions
Regional variation is precisely why philanthropy needs a broader operating model. On the coasts, the biggest crisis remains the supply of rental homes across income brackets, and especially for the lowest-income families. In places suffering from industrial decline, housing quality may loom larger. Elsewhere, interest rates and construction costs may put homeownership out of reach. Taken together, regional experiments point to several distinct philanthropic roles: supporting needed regulatory reforms, supplying catalytic capital, building operating capacity, creating institutions, and proving models that can scale.
In Washington, Ballmer Group’s most recent bet is the Washington Family Housing Fund, a partnership with the State Housing Finance Commission to build 10,000 affordable rental homes statewide. Ballmer grants capital to the Commission, which lends it out as subordinate, and in certain cases, forgivable, debt of up to $150,000 per unit for family-sized units in the 50% of Area Median Income range. Critically, projects are barred from using competitive public resources like LIHTC or state and local housing trust funds. The design seeks to add supply without drawing down constrained public subsidy, and to avoid the cost leakage associated with legacy tools. This possible commitment of up to $1.5 billion represents the level of serious scale other intractable problems like climate change have drawn from philanthropy.
In Atlanta, the Community Foundation for Greater Atlanta aligned with Mayor Andre Dickens’ goal of building or preserving 20K affordable homes by 2030. CFGA paired a $200 million philanthropic commitment with the City’s $100 million Housing Opportunity Bond. CFGA split its commitment between the $100 million TogetherATL fund, which provides grants and zero-interest conditional loans for deeper affordability, and the $100 million GoATL fund, which provides low-cost debt and preferred equity to fill gaps in otherwise viable projects. Atlanta has assembled a locally controlled spectrum of capital — from grants to concessionary investment to public mezzanine debt – around a citywide production goal.
Two Utah families are proving an alternative manner of directly investing in housing. Ivory Innovations and the Call to Action Foundation have set up operating foundations whose respective missions and structures allow for the development of affordable housing. Operating foundations run programs directly rather than issuing grants. The two foundations formed the Call to Innovations partnership, collectively committing $382 million to build over 1,500 affordable housing units across seven communities, with thousands more in the pipeline. Within the communities, 40% of units must be affordable to households earning 60% or less of AMI, and 35% of units are affordable to households earning up to 80% of AMI. These two philanthropies are able to experiment with more cost- and time-efficient models of development than traditional LIHTC projects, whose myriad regulations and cottage industry of consultants have bloated the system.
The New Philanthropists Revisiting the Historic Role
The beginnings of a new philanthropic operating system, within a new housing ecosystem, are emerging. Some of the most impactful actors constitute a newer set of philanthropists.
John and Laura Arnold, who generated their wealth through John’s energy-focused hedge fund, have taken an acute interest in expanding housing supply. Arnold Ventures has focused on policy change to reduce barriers to housing construction: zoning reform, greater flexibility in land use regulation, building code changes, and permitting reform. Arnold has a heavy research orientation, seeking strong evidence before making deeper bets. Arnold is also backing innovative models and operators via MRIs, PRIs, and equity and debt investments. They are uniquely market-oriented, and they seek to bridge through current policy and market failures by funding and proving bets that the market can take on after Arnold’s involvement. They view the ability to pair policy change with market experimentation as a high-leverage way to effect change across the country.
Likewise, the aforementioned Ballmer Group also acts nationally, funding policy efforts in addition to more capital-intensive activities like backing operators and deal execution. Ballmer uses various elements of the corpus as well, across mission-oriented grants and financial investments. In addition to the hyperlocal Washington fund, Ballmer has backed local housing delivery organizations, impact investors like Vistria and Avanath, regional housing partnerships, and public-private efforts. The foundation is actively backing innovative groups that will source larger opportunities to move the housing supply needle eventually.
These approaches illustrate two complementary national functions: Arnold seeks to “change the rules” and address policy and market failures through policy reform and market experimentation; Ballmer seeks to “fund the builders and operators,” using capital to expand delivery capacity. Both pair national scale and vision with regional experimentation. Their structures also permit more flexible use of grants, investments, and balance sheets. Corporate philanthropy is also getting more active in the housing space.
Nan Ransohoff has argued that a third wave of American philanthropy is arriving, funded by AI wealth where the first and second were related to industry and software, respectively. Her arithmetic on the OpenAI Foundation, Anthropic’s founders, and employee donor-advised funds points to $37 to $100 billion in new annual philanthropic spending, a meaningful increase over what Americans already give. Ballmer and Arnold are demonstrating what may be possible in the “third wave”. Importantly, while these leaders do have specific local initiatives, they also have internalized the importance of action across the nation.
Regional Innovation Supported by National Strength
Some of the above-mentioned philanthropies are supporting our efforts with the National Housing Crisis Task Force, where they have a chance to drive both systemic thinking and bottom-up pilot generation alongside a bi-partisan group of co-chairs and practitioner members. They drive us to think bigger and to seed innovative ideas that they can further support, if proven effective.
Arnold and Ballmer’s national perspective, policy levers, and ability to diffuse and scale good ideas can leverage bottom-up innovations such as those in Utah. But even these influential players’ admirable initiative and creativity do not yet add up to the systemic collaboration of many key players that we have seen in the past.
In partnership with Call to Action and Ivory Innovations, the National Housing Crisis Task Force plans to release a Philanthropic Capital Playbook detailing the range of options available to regional foundations and families looking to make a dent in the housing crisis. These two Utah families seek to demystify a sector that is trickier for philanthropic giving than others. They want to bring along like-minded investors and codify collective action, building a network of families focused on housing problems over time, similar to efforts like CREO and P150 in the climate space.
We believe that a demonstration of real local strength on the issue will also encourage traditional national players to come in and leverage their top assets — scale, innovation, and balance sheet strength — to back the organic regional solutions. What would a version of Kellogg’s support for community foundations look like today? A concerted effort to spread proven capital structures across dozens of community foundations is obvious, but creative credit guarantees to leverage more local philanthropy should also be considered.
Regional philanthropy can diagnose local market failures, build institutions, and pilot solutions; national philanthropy can supply scale, balance-sheet capacity, research, standardization, and diffusion. This combination can start to get housing into the range of investment that may be required to address the current shortage: billions of dollars a year of philanthropic giving or lending (similar to what climate giving has achieved), leveraged with public and private partners to over $1 trillion of total investment over years, to chip away at a shortage of millions of units.
It has become clear that addressing housing gaps requires scaled capital, risk absorption, technological innovation, and system-level thinking. It is imperative that more of the philanthropic community — from local families just now beginning to think through how to impact newly visible housing crises, to national philanthropies with experience building systems — join in to take on the housing challenge. Otherwise, philanthropy risks leaving housing as a standalone and often deprioritized “program” rather than a system connected to various societal ills.
Meaningful changes in our current system will require funding operators, not just advocates; being investors, not just grantors; and sparking innovation, not just research. Philanthropy can, and should, recapture its potential and be a housing leader just as it was in the past.
Bruce Katz is the Founder of New Localism Associates and a Senior Advisor to the National Housing Crisis Task Force. Michael Saadine is Managing Partner at Invisible Group, an interdisciplinary built environment investment platform, and a Senior Advisor to the National Housing Crisis Task Force. Cara Eckholm is the founder of AKA Urban and a Fellow at Renaissance Philanthropy.