Trust-Based Philanthropy

Trust-Based Philanthropy: Equalizing the philanthropic playing field

Spencer Kelly & Recha Bergstrom, MD

 At the heart of philanthropy is an implicit and largely invisible power imbalance. Nonprofits operate at the mercy of donors—individual, institutional, governmental—who determine which organizations get resources and how much they receive.

 By reforming donor practices and mindsets, the Trust-Based Philanthropy Project aims to ameliorate the philanthropic power imbalance and restore a greater sense of agency among nonprofits. This is an overview of trust-based philanthropy as an approach, and will also detail steps you can take to improve your own giving.  While this approach is targeted for foundations and large grant makers, the concepts and considerations are important for any individual donor to consider when making charitable contributions. 

 Overview of the trust-based approach

 The Trust-Based Philanthropy Project was launched in January 2020. A collaboration between The Whitman Foundation, the Robert Sterling Clark Foundation, and the Headwaters Foundation, Trust-Based Philanthropy is a five-year, peer-to-peer initiative aiming to address power imbalances and trust issues between donors and nonprofits.

The power imbalance in philanthropy is grounded in the fact that funders control how, and how many, resources are distributed among nonprofits.

Donation decisions can be boiled down to trust: whether or not donors trust that a nonprofit is legitimate, that they will use their donation wisely, that they will have a positive impact, etc.

 The problem is that trust is not impartial. Whether they know it or not, donors inevitably bring their assumptions, prejudices, and predispositions into determinations of trust. The inherent bias driving donation decisions leads to unequal distributions of resources, reinforcing the systemic trends and power structures in society as a whole.

 Trust-Based Philanthropy is grounded in the belief that “as grantmakers, we have a responsibility to acknowledge and confront the reality that philanthropy has often contributed to systemic inequities, both in the ways wealth is accumulated and in the ways its dissemination is controlled.”

The Project’s overall goal is to “flip the script on traditional philanthropy” by changing donor practices and advocating for an approach of trust, humility, and transparency to equalize the power dynamic with grantees.

If a trust-based approach is widely adopted, the new philanthropy ecosystem will:

• “Center equity, humility and transparency
• Recognize the power imbalance between funders and grantees, and work to actively rebalance it
• Deeply value the quality of relationships, and honor how we treat others on the path to winning on our issues, as much as the act of winning itself”

The Trust-Based Philanthropy Project hopes that “at the end of this five-year initiative, we will have built the awareness, tools, and connections necessary for individual, institutional, and sector-wide transformation” along the above lines.

 Trust-based philanthropy in 4D

 Trust-based philanthropy begins with a foundation of values.

 The Trust-Based Philanthropy Project calls for donors to adopt values that will “function as a north star for decision-making, culture-setting, and systems design.”

 Values should be adopted along four dimensions of a donor’s work. While these are targeted to foundations or large organizations granting charitable funds, their lessons can be equally important for the everyday donor to consider when thinking about how they make their donations.

1. Culture: Norms, systems, and practices; your organization’s general way of being

• “If trust is not built internally, then it can never be fully realized externally. A trust-based culture is one wherein we center relationship-building and address inequitable power dynamics in every aspect of our work.”

 2. Structures: The hierarchies, systems, protocols, policies, standardized processes, and technologies of your organization

• “Structure is deeply connected to culture and values. If your organization’s structures are not reflective of trust-based values, they are likely to become barriers to advancing trust-based grantmaking practices.”

 3.  Leadership: The ability to inspire and align around shared values

• “Trust-based leaders are collaborative and facilitative. They prioritize the well-being and development of the humans doing the ‘work,’ while keeping an eye on the big-picture organizational vision and purpose. They are focused on lifting up the whole team and building trust internally, rather than consolidating attention, power, and influence at the executive or trustee level. Most importantly, they lead by embodying values of humility, equity, and transparency—with a willingness to give up some of their power in service of the organization’s greater purpose.”

 4. Practices: What you do and how you “show up” as a grantmaker; the process by which you identify grantees, how you disseminate funds, what information you collect from grantees, etc.

• “Too often, foundations get in the way of nonprofits doing the work they know best. This can slow down progress, perpetuate inefficiency, and obstruct nonprofit growth and innovation. Moreover, it creates a top-down power dynamic that makes it virtually impossible to build honest, transparent, mutually accountable relationships.”

While every organization can and should determine their own values, Trust-Based Philanthropy lists the following examples of commonly-held values:

• Working for systemic equity: Recognizing the racial, economic, and political inequities in which we operate, and taking an antiracist approach to changing practices and behavior that perpetuate harm
• Redistributing power: Being willing to share power with grantee partners and communities who are closer to the issues we seek to address
• Centering relationships: Prioritizing healthy, open, honest relationships to navigate the complexity of our work and our world with greater confidence and effectiveness
• Partnering in a spirit of service: Being a supporter and collaborator, rather than dictating what is needed; leading with trust, respect, humility
• Being accountable: Holding ourselves accountable to those who seek support
• Embracing learning: Remaining open to learning as we go, and embracing opportunities for growth and evolution

 Six practices for trust-based grantmaking

 Once you have determined your organizational values or your own personal giving goals and values, Trust-Based Philanthropy outlines six, more specific grantmaking practices to guide everyday work.

1. Give multi-year, unrestricted funding

• “Responsive, adaptive, non-monetary support bolsters leadership, capacity, and organizational health. This is especially critical for organizations that have historically gone without the same level of networks or support than their more established peers.”

Steps to take:

• Examine your portfolio: How many of your grants are unrestricted? How many are multi-year? Do you require annual reapplications?
• Assess: Are there any trends or biases in your grants? What assumptions are driving your granting decisions?
• Readjust: Take intentional steps to correct problems identified above
• Think long-term: Consider the sustainability of your granting practices from the grantees’ perspective

 2. Do the homework

• “Oftentimes, nonprofits have to jump through countless hoops just to be invited to submit a proposal. Trust-based philanthropy flips that script, making it the funder’s responsibility to get to know prospective grantees, saving nonprofits time in the early stages of the vetting process.”

Steps to take:

• Assess your criteria: Do your grant requirements give preference to certain types of organizations? Do your criteria center on the needs, experiences, and priorities of your cause areas?
• Check your biases: Think about how you currently find grantees and how you could create a more inclusive process to the grant search
• Diversify your network: Examine the people you rely on to inform decisions; consider whether these people merely reinforce your assumptions and whether you could seek new perspectives in other areas

 3. Simplify and streamline paperwork

• “Nonprofits spend an inordinate amount of time on funder-driven applications and reports, which can distract them from their mission-critical work. Streamlined approaches focused on dialogue and learning can pave the way for deeper relationships and mutual accountability.”

Steps to take:

• Clarify what you need to know: Only ask questions on forms that you need to know and can’t determine on your own
• Eliminate jargon: Jargon may alienate or exclude certain groups
• Seek our conversation over transaction: Consider face-to-face meetings, phone calls, or video conversations instead of applications and reports

 4.  Be transparent and responsive

• “Open, honest, and transparent communication supports relationships rooted in trust and mutual accountability. When funders model vulnerability and power-consciousness, it signals to grantees that they can show up more fully.”

Steps to take:

• Be crystal clear: Be explicit about timelines, decision-making processes, what you do and don’t fund, etc.
• Be swift in saying no: Don’t mislead a nonprofit or waste their time
• Respond in a timely manner: Be responsive to grantees’ inquiries
• Communicate your equity journey: Outline how your organization is promoting equity, be transparent about past mistakes, assert your receptivity to feedback

 5.  Solicit and act on feedback

• “Philanthropy doesn’t have all the answers. Grantees and communities provide valuable perspectives that can inform a funder’s strategy and approach, inherently making our work more successful in the long run.”

Steps to take:

• Survey your partners: Anonymously survey current, past, and rejected grantees about your practices as a funder
• Get input on strategic questions: Get grantee feedback on organizational updates to strategic plans, theories of change, etc.
• Acknowledge and affirm: Even if you can’t honor every piece of feedback, ensure grantees that you hear their perspectives
• Compensate: If what you’re asking of grantees requires a significant amount of time outside of their usual work, offer compensation the same way you would for a consultant

6.  Offer support beyond the check

• “Responsive, adaptive, non-monetary support bolsters leadership, capacity, and organizational health. This is especially critical for organizations that have historically gone without the same level of networks or support than their more established peers.”

Steps to take:

• Be responsive, not prescriptive: Listen to your grantees for any needs, challenges, or opportunities for which you can provide support
• Make it optional: Clarify that declining your offers for support will not affect current or future funding
• Be a connector: Introduce your grantees to other prospective funders
• Showcase grantees: Find ways to amplify the work of your grantees

 Conclusion and further resources

 Ultimately, trust-based philanthropy challenges the way we currently think about grantor-grantee relationships. By introducing more trust and accountability into the philanthropic equation, we can advance equity, redistribute power, build mutually accountable relationships, and make charity more effective for all stakeholders.

 The above values and practices provide a basis for implementing trust-based philanthropy in your own giving. For further information, the Trust-Based Philanthropy Project also offers “guides and how-to’s,” with insights on how to run a trust-based meeting, how to debunk misconceptions about a trust-based approach, etc. Their website also features presentations and webinars, podcasts, resources from the field, among numerous other resources on trust-based philanthropy.