The largest private equity funds in the U.S. hold more than $535 billion in assets
The 50 largest private equity firms in the U.S. collectively hold more than $535 billion in assets. They are required to allocate at least 5% of their assets to distributions each year, and this minimum threshold has remained unchanged since 1969, according to a Fortune op-ed by Vanda Arcot, founder of the consulting firm Komselj.
According to FoundationMark, 17 of the 40 largest U.S. foundations had an average payout rate of less than 5% over a five-year period. At the same time, the average grant rate for the sector as a whole is about 7%; however, according to the author, this figure does not reflect the concentration of assets in the largest organizations.
Arkot cites Candid’s latest forecast on philanthropy, according to which a significant portion of private foundations determine their annual grant volume not as a strategic decision, but by calculating the minimum required to meet the requirement. One of the participants in the Candid survey, as the author reports, described this figure as a calculation for a tax form rather than an ambitious goal.
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In 2025, the MacArthur Foundation voluntarily raised its target disbursement rate to 6% and later reported that the actual figure for that year was 7.1%. According to Arkot, this move attracted attention because few large foundations increase their grants beyond the legally mandated minimum. She cites healthcare, education, and the environment as priorities for the largest foundations; together, these areas receive approximately a quarter of all charitable donations in the U.S.
The author also links the discussion to the One Big Beautiful Bill Act. According to her, the law permanently raised the federal estate tax exemption to $15 million per person and introduced new thresholds and limits that reduce the tax benefits of charitable contributions for individuals, corporations, and donors in higher tax brackets.
Arkot believes that as other tax incentives are scaled back, the 5 percent requirement may remain the primary mechanism influencing the rate at which funds flow to charitable organizations. She calls for a discussion on a possible increase in this threshold and emphasizes that family foundations enable families to retain control over their assets and decisions regarding their use across generations.
