The MacArthur Foundation is famous for one thing the public actually knows about a foundation: the genius grants, the no-strings awards that arrive by surprise phone call. But its most recent Form 990-PF, for calendar year 2024, tells a less familiar and more consequential story, about a $9.3 billion endowment, an investment chief who out-earns the president, and a decision to break the most sacred number in American philanthropy. Read from the filing, MacArthur is a case study in the question every perpetual endowment eventually faces: keep compounding forever, or spend faster now because the need is now. Everything below is from the filing and the public record.
An insurance fortune, given away by strangers
John D. MacArthur bought the Bankers Life and Casualty Company for $2,500 in 1935 and built it into one of the great American fortunes, and in 1970 he and his wife Catherine chartered a foundation to give it away, though it only became active after his death in 1978, when it inherited an estate estimated near a billion dollars (Wikipedia, "MacArthur Foundation"). MacArthur reportedly did not much care what the foundation would do with the money; he left that to the people who came after, which is itself a philanthropic philosophy. What they built includes the MacArthur Fellows Program, the genius grants, launched in 1981, which each year gives twenty to thirty people in any field a large no-strings award they cannot apply for and did not see coming. The rest of the foundation funds climate, democracy, criminal-justice reform, and international development, increasingly in concentrated "Big Bets," a model it has said it will wind down in 2026.
What the filing shows
The FY2024 return reports $9,311,570,852 in total assets at fair value. The foundation made about $303 million in grants during the year and, counting its qualifying operating and program costs, recorded $423,815,311 in total charitable distributions. The portfolio did the heavy lifting: net investment income was $791,986,861, meaning the endowment earned roughly two and a half times what the foundation distributed, which is exactly how a perpetual endowment grows while it gives.
And here is the number that tells you what MacArthur actually is. The chief investment officer, Susan Manske, was paid about $2.51 million, more than twice the roughly $1.11 million earned by the president, John Palfrey (ProPublica). This is the same pattern visible at Hewlett and the other big grantmakers: a foundation of this size is a multi-billion-dollar investment operation with a grant office attached, and it pays for the investment talent accordingly. The genius grants are the famous part. The $9 billion portfolio quietly earning $800 million a year is the engine.
Breaking the 5 percent rule
Every private foundation must, by law, pay out roughly 5 percent of its assets each year, and for decades most large foundations treated that legal floor as a ceiling, distributing about 5 percent so the endowment could keep compounding and the institution could last forever. That 5 percent is the most sacred number in philanthropy, the setting that makes a foundation perpetual rather than temporary.
MacArthur broke it. In response to federal funding cuts hitting the fields it supports, the foundation pushed its 2025 payout to 7.1 percent, roughly $190 million above its own plan, and said it would again exceed 6 percent in 2026 (MacArthur). That is a bigger decision than it sounds. Spending 7 percent instead of 5 percent, year after year, is the difference between an endowment that lasts forever and one that slowly shrinks. MacArthur is deliberately choosing to spend down a little of its permanence in order to put more money into the world now, while Washington pulls back, rather than let the corpus keep growing while the grantees it funds go hungry. It is not alone. The much smaller Spencer Foundation did the same in miniature, launching emergency bridge grants after federal science cuts. But MacArthur is a $9 billion institution making the choice out loud, on the payout line of its own filing, and that makes it the clearest test in American philanthropy of whether a foundation exists to last forever or to be useful now.
The two ways to read a perpetual endowment
This series built a taxonomy of institutional money on exactly this tension. A perpetual endowment that spends only its 5 percent minimum is choosing the longest possible life: the money outlives everyone, the way Girard's has for 194 years. A foundation that spends 7 percent is choosing impact over immortality, accepting that the corpus may eventually shrink in exchange for doing more while the problem is acute. Neither is wrong. They are answers to different questions about what a fortune is for. What makes MacArthur worth watching is that it is a large, old, prestigious institution publicly moving from the first answer toward the second, and doing it transparently, explaining on its own website why it set the payout above six.
The market underneath it all is the same market everyone else is in. MacArthur's $9.3 billion is invested in the same public and private markets a pension fund and a retiree use, which is why the investment chief is the highest-paid person in the building and why a bad market year would force the payout debate in the other direction. The genius grants will keep arriving by surprise phone call. The more consequential MacArthur story is the one on the payout line, where a foundation is quietly deciding how long it intends to live.
Related reading
- The New Fortunes: MacArthur among two dozen of the largest new foundations, read from their filings.
- The Getty Trust: another multi-billion-dollar endowment, running a free museum instead of a grant program.
- How Deathless Money Invests: the perpetual-versus-spend-down taxonomy this decision sits inside.
- The Endowment That Employs Its Scientists: HHMI, the perpetual endowment that spends less than it earns so the money lasts forever.
Fact-check notes and sources
- The financial figures (total assets at fair value of $9,311,570,852; about $303 million in grants paid, with total charitable distributions of $423,815,311; and net investment income of $791,986,861): read directly from the John D. and Catherine T. MacArthur Foundation's IRS Form 990-PF for calendar year 2024 (EIN 23-7093598), available free at ProPublica's Nonprofit Explorer. The chief investment officer's compensation of about $2.51 million exceeding the president's roughly $1.11 million is from the same return's officer schedule.
- John D. MacArthur's purchase of Bankers Life and Casualty for $2,500 in 1935, the 1970 founding, his 1978 death and roughly $1 billion estate, and the MacArthur Fellows genius grants launched in 1981: Wikipedia, "MacArthur Foundation", attributed.
- The 2025 payout of 7.1 percent, roughly $190 million above plan, in response to federal funding cuts, and the intention to again exceed 6 percent in 2026: the MacArthur Foundation's own statement. The winding down of the Big Bets model in 2026 and the roughly $100 million democracy commitment are documented in the foundation's public communications and Inside Philanthropy's coverage.
- The roughly 5 percent minimum distribution requirement for private foundations is set by IRS rules under Internal Revenue Code section 4942.
This post is informational and historical, not financial or philanthropic advice. All figures are reproduced from the cited public filing and the public record. Individuals are discussed from the public record as nominative fair use, with no affiliation implied and nothing endorsed by the MacArthur Foundation.
