Grantmaking organizations and grant seekers are deeply committed to tackling and eradicating social ills such as racism, patriarchy, colonialism, and other forms of oppression. However, a closer examination of traditional philanthropy and the historical context of resource collection and distribution reveals that these vices sometimes hinder the fundraising sector.

Fortunately, a new era is dawning for the grantmaking sector, offering a fresh and transformative approach that has the potential to revolutionize traditional philanthropy and address any existing shortcomings. This new approach is none other than trust-based philanthropy.

Trust-based philanthropy takes a holistic and inclusive trust based approach, emphasizing the importance of building strong relationships between funders and grantees. It recognizes that trust is the foundation upon which impactful and sustainable change can be built. By shifting away from the traditional transactional nature of philanthropy, trust-based philanthropy fosters collaboration, transparency, and mutual respect. It empowers grant seekers by providing them with the flexibility and autonomy to determine how best to address the complex social challenges they are working to overcome.

Through trust-based philanthropy, grantmaking organizations can actively work to dismantle the systemic barriers that perpetuate inequality and injustice. By placing trust-based values at the core of their practices, they can create a more equitable and inclusive philanthropic landscape that genuinely serves the needs and aspirations of the communities they aim to support.

In this new paradigm, trust-based philanthropy provides the necessary resources for social change and fosters an environment where meaningful relationships are cultivated, learnings are shared, and lasting impact is achieved. It is a powerful tool that holds the potential to transform the way we approach and address social issues, paving the way for a more just and equitable future.

 

A Brief History of Trust-Based Philanthropy:

Philanthropy, the act of giving and providing resources for the betterment of society, has played a pivotal role in driving societal progress. Individuals and organizations have long been at the forefront, addressing pressing issues and supporting the common good. However, the effectiveness and impact of traditional grantmaking approaches have often needed to be improved, revealing the need to examine the systemic inequalities perpetuated by these practices.

In recent years, a transformative approach known as trust-based philanthropy has emerged, offering hope for a more effective and lasting change. Trust-based philanthropy challenges the traditional grantmaking norms that have been shaped, in part, by exclusionary practices that nonprofits strive to overcome. It seeks to address power imbalances and burdensome requirements that have skewed results and limited equitable distribution of resources.

The roots of trust-based philanthropy can be traced back to the early 2000s, when philanthropic leaders began questioning the efficacy of traditional grantmaking practices. Recognizing the need for a shift in power dynamics and a more inclusive approach, they sought to empower grantee organizations by prioritizing their needs and expertise. This shift aimed to create a more equitable distribution of resources and amplify the impact of philanthropic investments.

Over the past decade, trust-based philanthropy has gained significant traction, garnering attention and endorsement from major foundations, influential philanthropists, and grassroots movements alike. Its principles and potential have resonated with those seeking to break free from the constraints of traditional grantmaking and embrace a more collaborative and equitable approach.

By embracing trust-based philanthropy, the philanthropic community aims to foster a future where resources are distributed fairly, power dynamics are rebalanced, and lasting change is achieved. Through a deep understanding of the origins, principles, and potential of trust-based philanthropy, we can collectively work towards a better and more inclusive world.

 

Understanding Trust-Based Philanthropy:

Trust-based philanthropy is a relational approach that prioritizes trust, transparency, and collaboration between funders and grantees. It recognizes that nonprofit organizations, as the recipients of grant funding, possess the expertise to identify and address the needs of their communities most effectively.

Instead of imposing rigid guidelines and conditions on giving, trust-based philanthropy emphasizes providing unrestricted funding, multi-year grants, and reducing reporting requirements. By centering on trust, this approach aims to empower grantees and enable them to work more effectively toward their missions. It fosters a deeper level of partnership and mutual understanding between funders and grantees, allowing for more flexibility and innovation in addressing complex social issues. Trust-based philanthropy recognizes the importance of long-term relationships and ongoing support, providing nonprofits with the stability and resources needed to create sustainable change.

Through practices of trust-based philanthropy, funders are encouraged to listen, learn, and collaborate with grantees, acknowledging their unique insights and perspectives. This approach not only enhances the impact of philanthropic investments but also promotes a more inclusive and equitable philanthropic ecosystem. By embracing trust as a fundamental principle & key element, trust-based philanthropy is transforming the way we approach and practice philanthropy, creating a more effective and responsive sector that drives positive social change.

 

Why it Matters:

When it comes to cultivating more effective giving, grantmakers are no longer searching for a silver-bullet answer. Instead, foundations are embracing a broader movement known as ‘trust-based philanthropy’ (TBP), which involves actively seeking their grantees’ knowledge, voice, and lived experience to foster successful grant programs. This approach turns traditional, paternalistic grantmaking logic on its head in a surprisingly simple and intuitive way.

Rather than selecting the ‘right’ grant recipients or attempting to ‘fix’ their organizational work, foundations now place their trust in grantees to create meaningful impact in their unique ways. This means that ‘trust’ has become both a process and an outcome in grantmaking. It serves as a method of establishing familiar, honest, and cooperative relationships with grantees while also allowing for impactful results firmly grounded in each grantee’s unique needs.

By adopting trust-based philanthropy, foundations are not only fostering more inclusive and empowering grant programs but also recognizing the expertise and insights of those closest to the communities they aim to serve. That would help organizations advance equity and build mutually accountable relationships. This approach establishes a collaborative partnership between grantmakers and grantees, leading to more impactful and sustainable outcomes in the world of philanthropy.

 

Implementing Trust-Based Philanthropy:

To fully embrace trust-based philanthropy in a grantmaking organization, it is essential to apply some key principles. These principles serve as guidelines for four critical aspects of the funder’s operations: culture, structures, organization, and leadership.

Let’s take a closer look at these principles and how they can be put into practice. While the specific implementation may vary from one organization to another, these principles serve as a solid foundation for trust-based philanthropy. By following these guidelines, funders can lead with trust and center relationships when embarking on new grantee partner relationships and ultimately make a greater impact in their communities.

 

 1.     Encourage long-term general support:

For trust-based philanthropy to be successful, funding organizations must prioritize providing long-term, flexible support rather than focusing solely on project-specific grants. This means being open to the idea that grant seekers may have more knowledge and expertise in using resources effectively. Funding organizations should listen to grant seekers and give them autonomy in managing funds, avoiding transactional grantmaking, and addressing any biases hindering multi-year, unrestricted support.

Multi-year flexible funding not only benefits grantees by providing stability and encouraging innovation, but it also demonstrates a commitment to the grantee as a whole rather than just specific programs. So, to foster trust-based philanthropy, funding organizations must prioritize providing long-term general support. This can be achieved by making multi-year commitments, giving grantees autonomy in managing funds, eliminating transactional grantmaking, and addressing any biases hindering unrestricted support. This type of funding not only benefits grantees by providing stability and encouraging innovation, but it also signifies a commitment to the grantee as a whole rather than just specific programs. Funders need to understand that being a funding organization does not necessarily mean they are best equipped to manage resources, and therefore, it is crucial to listen to grantseekers and trust in their ability to use funds effectively. Ultimately, multi-year flexible funding promotes trust, enables long-term planning, and allows grantees to make strategic investments for the future.

2.     Mastering due diligence:

It is crucial for organizations advocating trust-based philanthropy to take the initiative in conducting due diligence on potential grantees and any concerns that may arise within their funding landscape. It is important not to rely solely on information provided by the grantees themselves, as thorough research by the funding organization leads to a more efficient vetting process and allows nonprofits to focus on their work. This also fosters a relationship built on fairness, trust, and mutual benefit, which are essential values in trust-based philanthropy.

To ensure that all potential grantees have an equal opportunity to be considered for funding, it is recommended to minimize the pre-proposal requirements and eliminate an invitation-only process. Additionally, follow-ups can be done to gather more information when necessary.

Once potential grantees are identified, it is important to gather information about their purpose, operating methods, and financial status. This can be done by researching public records and collaborating with their partners and program participants.

Expanding the reach of the organization to identify other deserving nonprofits that align with their values is also beneficial. The organization can gain insight into its strategies and goals by connecting with these nonprofits. It is also important to review the grantmaking policy regularly to ensure that it includes deserving nonprofits that may have yet to be considered. Conducting due diligence is a crucial responsibility for organizations promoting trust-based philanthropy. No matter what stage you are in your funding process or relationship with a grantee, it is important to continue gathering information and reassessing policies to promote fairness and trust. This not only benefits the organization but also strengthens the philanthropic community as a whole.

3.     Simplifying the process:

Traditional philanthropy is often bogged down by endless paperwork, with grant seekers navigating through numerous requirements and specifications set by funders. This can be a time-consuming and burdensome process, worsened by redundant questions from different funders. To truly embrace trust-based philanthropy, funding organizations must adopt a more relational approach, one that allows for a deeper understanding of the grantees’ work and ultimately saves everyone’s time. This involves eliminating unnecessary protocols and streamlining the application process. Some suggestions include implementing a screening process to determine the likelihood of funding, accepting proposals already written for other funders, and utilizing conversational methods such as in-person or virtual meetings for reporting. By adopting these changes, more time can be devoted to building genuine relationships between grantmakers and grantees, leading to a better vetting process and allowing grant seekers to focus on their mission-driven work. This approach benefits both parties involved, making the philanthropic venture more rewarding and aligned with their respective missions.

This smoother process makes more time for genuine interaction between the grantees and the grantmakers, thus nurturing a deeper relationship. Knowing the grantees better aids the vetting process.

Additionally, it creates enough time for the grant seeker to give attention to their mission-focused work. This approach benefits the grantmakers, is more rewarding, and helps them fulfill their mission better.

Reducing philanthropy’s bureaucracy streamlines the process and allows for a stronger focus on the relationship between grantmakers and grantees. This can lead to a better understanding and support of the grantees’ work, ultimately helping both parties achieve their goals. With an open-submission policy and more efficient communication methods, trust-based philanthropy can pave the way for more meaningful and effective philanthropic efforts. Cutting the bureaucracy in traditional philanthropy can lead to a more efficient and mutually beneficial process for all involved. So, let’s work towards simplifying and streamlining the system to focus on what truly matters – creating a positive impact in our communities through meaningful relationships and support beyond the check for important causes. Let’s cut the red tape and make way for a more effective and impactful philanthropic landscape. With trust-based philanthropy, we can achieve this goal together.

4.     Prioritize transparency and responsiveness:

To promote trust-based philanthropy, funding organizations must recognize grantees as partners rather than another party involved. This requires grantmakers to demonstrate transparency, awareness, and vulnerability.

The underlying principle of this approach is to establish respect and trust by keeping current and potential grantees informed. One way to implement this is by clearly stating the missions that are eligible for funding and those that are not. This prevents false hopes and allows grant seekers to have a realistic understanding of their chances for funding.

Additionally, if any funding policy or procedure changes may affect current grantees, funders must provide adequate notice and explain the reasoning behind these changes.

Grantmakers should also be open about their challenges for effective philanthropy and invite grant seekers to share their struggles. This display of vulnerability:

  • It helps grantmakers understand how they can better support their partners
  • Encourages mutual accountability & understanding between both parties
  • Creates an environment for honest communication
  • Acknowledges the existing power dynamics and aims to establish a more balanced relationship.

5.     Acting upon feedback:

For grantmakers who truly value effective philanthropy, it is crucial to consider evaluation from grantees. Their assessment provides valuable insight into the impact of their support. To promote trust-based philanthropy, funding organizations must actively seek and implement input from grant seekers and the general community. This collaboration allows grantmakers to make more informed decisions, taking into account the expertise and experience of those they support. In cases where feedback cannot be implemented, funders need to communicate why.

There are various methods for executing this principle, including using anonymous surveys to gather feedback on trust based practices, seeking input from grantees before making any updates, and communicating how their feedback was used or why it still needs to be implemented. This principle plays a significant role in fostering trust-based philanthropy by demonstrating the grantmakers’ respect for their grantees. By allowing them to be seen and heard, soliciting and acting upon feedback promotes authenticity and provides valuable insights that can help funding organizations better serve their grantees. In summary, ask, listen, work, or communicate why feedback cannot be implemented. So, it is important to foster a culture of open communication and mutual respect between grantmakers and grantees to create effective philanthropy that truly benefits the community. In this way, philanthropic efforts can be continuously improved upon and better serve those in need. Let us strive for collaborative partnerships based on trust and understanding for the betterment of our communities. We must actively seek and implement feedback, listen to the voices of those we support, and communicate openly and transparently to promote authentic philanthropy that makes a positive impact. Remember: ask, listen, act, or communicate why. The power to create lasting change lies within us all.

6.     Ways to offer non-monetary assistance:

Grantmakers need to realize that providing financial support is one of many ways to assist grant seekers. Trust-based philanthropy emphasizes the importance of non-monetary support, which can take various forms, such as helping grantees build networks, providing leadership support with paid time off, and encouraging thought partnerships on social issues. This type of support helps develop the capacity of organizations over time, fosters a deeper connection with grantee partners and their mission, and allows grantmakers to understand better the organizations they support. By engaging in meaningful conversations, grantmakers can gain insight into the needs of their grantees and demonstrate their unwavering support for the organization as a whole.

Ultimately, non-monetary support highlights the fact that nonprofit organizations operate within a larger context and that grantmakers are committed to supporting them in every way possible. It is not just about financial resources but also about providing support in other areas to help organizations thrive and make a bigger impact in their communities. By offering non-monetary support, grantmakers can contribute to the long-term success of their grantees and foster a stronger partnership that goes beyond traditional philanthropy. Such support shows a genuine interest in the organization and its mission, creating a sense of trust and understanding between the grantmaker and grantee. Ultimately, it is about working together to achieve common goals and make a positive difference in society. Non-monetary support is more than just a give-and-take relationship; it is about building a strong foundation for long-lasting and impactful collaboration. So, while financial support is crucial, grantmakers should also consider the various ways in which they can provide non-monetary support to strengthen their relationships with grantees and contribute to their overall success.

This type of support not only benefits the organization but also allows grantmakers to have a better understanding of the environment in which their grantees operate, allowing for more informed and effective decision-making. Through non-monetary support, grantmakers can play a more active role in the growth and development of their grantees, creating a positive ripple effect on the community as a whole. Therefore, grantmakers need to recognize the value of non-monetary support and incorporate it into their approach toward philanthropy. So, while financial support is crucial, grantmakers should also consider the various ways in which they can provide non-monetary support to strengthen their relationships with grantees and contribute to their overall success. By doing so, we can move towards a more collaborative and equitable approach to philanthropy that focuses on long-term impact rather than just short-term funding. In conclusion, the provision of non-monetary support is a crucial aspect of trust-based philanthropy and should be embraced by grantmakers to create meaningful and impactful relationships with their grantees. By working together in this way, we can build a more sustainable and equitable world for all.

Conclusion:

In summary, these principles provide numerous benefits for both grantmakers and grantees. By implementing them, organizations can save time, promote creativity in the use of funds, and allow grantees to focus on their core missions fully. Most importantly, following these principles can lead to a stronger relationship between grantmakers and grantees and ultimately result in more successful outcomes. If your organization is new to trust-based philanthropy, these principles can serve as a helpful guide to ensure success. So, make sure to keep them in mind throughout the grantmaking process. Your efforts will be noticed and will ultimately positively impact the communities you serve. Keep striving for meaningful and effective partnerships with grantees, as it will lead to a more prosperous and impactful philanthropic landscape.

Remember, trust-based philanthropy is an ongoing process that requires continuous effort and commitment from all parties involved. Let these principles serve as a foundation for building strong and sustainable relationships with grantees to achieve meaningful change in the world. So, keep them in mind as you continue your journey towards more effective and impactful grantmaking. Together, we can create a more equitable and compassionate society.

Whether you’re a startup organization or a leading corporation, CommunityForce provides fully customizable, all-in-one online grant management solutions to maximize your efficiency, simplify complex processes, and improve collaboration so you can focus on increasing your impact. We’ve helped organizations streamline their entire process no matter the size and scope of their giving.