Trust-Based Philanthropy

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Trust-based philanthropy acknowledges that conventional philanthropy is rooted in an imbalance of power and seeks to shift the unequal power dynamic. Most individual donors are already doing trust-based philanthropy, without calling it that. They find organizations that seem to be doing good work on the issues they care about and then make general operating support donations, trusting that those organizations will spend the funds in keeping with their stated mission and stay in touch with reports on progress. Unfortunately, many institutional funders take a different approach. They provide grants in the form of restricted support for specific projects and force nonprofits to navigate extensive application and reporting requirements. But that’s been changing. 

Momentum around trust-based philanthropy (TBP) has been building for the past decade, and it increased notably in 2020, as the COVID-19 pandemic made clear the need for funders to be flexible and to move funds quickly to respond to an urgent crisis, and then as the national reckoning around racial justice that summer prompted organizations society-wide to prioritize equity. In that year, many funders realized they didn’t have to do things the way they always had, and could alternatively switch to more trust-based practices. Some adjusted reporting requirements or offered rapid-response funds with no applications required in order to move resources fast and without requiring unnecessary work on the part of nonprofits.

What are the core practices of trust-based philanthropy?

There are several concrete practices associated with trust-based philanthropy that donors can adopt anytime: 

  • Giving multiyear, unrestricted, general operating support. This is the “philanthropic best practice” that is usually front and center in all discussions of trust-based philanthropy. Donations structured this way enable nonprofit leaders to make decisions about how funds are spent, provide flexibility and stability, and reduce the amount of time nonprofit staff spend on fundraising. Advocates say it allows nonprofits to think bigger, respond to unexpected opportunities and challenges, and make long-term plans.

  • Placing responsibility to learn about the merits of the work on the donor. Nonprofits usually publish extensive information on their websites documenting the story of their effectiveness, and yet funders have for decades demanded that prospective grantees repackage their information time and time again to fit into their application and reporting boxes. TBP encourages funders to do their homework first and then begin a two-way conversation about the fit between the work of the organization and the resources the funder has available to support it. 

  • Minimizing or eliminating mandatory grant application and reporting procedures. Long, complicated applications and reports are a way grantmakers ask nonprofits to prove they are worthy of funding. Advocates for TBP say this represents a lack of trust. If you trust an organization because you believe they do effective work (see below for how you can confidently know that), you can simply support that work, without requiring nonprofit staff to jump through hoops. You might make the application process short and sweet, or invite grant recipients to tell you how they’d like to report on their work. 

  • Being transparent. Transparency is key to trust. Trust-based philanthropy involves establishing real relationships with the organizations you’re funding. A great way to do that is to be clear and upfront about your giving, your processes, your capacity and your timing. 

  • Seeking perspectives outside of the funder’s experience. It is unrealistic to think a donor can or should abandon their knowledge and experiences, but when it comes to making social change, donors of considerable wealth and privileged backgrounds can benefit tremendously from structuring their grantmaking procedures around learning from others. This can happen in a variety of ways, including paying community leaders or nonprofit experts to plan grantmaking strategies. It might take the form of participatory grantmaking activities. TBP takes as a given that institutional funders have an ethical obligation to involve the people who will be impacted by their giving to be involved in grantmaking decisions. This might mean creating a grant committee composed of people from the community the funds will benefit or people who are directly impacted by the issue the grant seeks to address. 

  • Providing support other than money. Donors often have more than just financial resources at their disposal — they have influence, networks, political connections, convening power and many other advantages to provide non-monetary support. TBP encourages funders to find ways to support nonprofit leadership, capacity and organizational health. That might mean looking for ways to support the larger field, not just favored grantees. 

Taking Action

Trust is built. It doesn’t appear overnight, or endure forever without maintenance. It’s something that needs to be cultivated and nurtured over time. Trust-based philanthropy does center on concrete practices, but it starts with a reorientation in thinking. 

  • Start with self-examination. The movement toward trust-based philanthropy includes reflection by the funder — what are your values? How can you align your giving practices with your values? If you give as part of a group or institution, you might do internal work around the values and culture of the giving circle or foundation you’re part of. This is ongoing, lifelong reflective and culture-creating work. 

  • Think of yourself as a partner, not a patron. Among those aiming to practice trust-based philanthropy, you might see the words “grantee partner” or “partner” instead of “grantee.” It’s a vocabulary shift meant to signify that the grantmaker/grant recipient relationship is a partnership, not a top-down, hierarchical relationship, nor one of paternalistic patronage.

  • Do your research on potential grantees. If you feel you don’t know enough about what the nonprofit does, how they do it, and whether they’re effective to make a funding decision, how can you gather this information without asking the nonprofit to fill out a form? Do you really need the nonprofit to spend time providing information directly to you in a customized proposal, or could you learn some of these things in other ways? Take a look at information that is easily accessible on the nonprofit’s website, in their annual report, in media coverage. If you need this information so your board can review it and make decisions, ask yourself why you are making nonprofits do this work of assembling and framing their information to fit your organization’s needs.

  • Check out the Trust-Based Philanthropy Project website. It offers peer learning opportunities for foundations looking to get involved in trust-based philanthropy. 

  • Learn with other donors. Ask other funders, philanthropy-serving organizations, or the community foundation that hosts your DAF which nonprofits they think are doing great work on an issue you care about. There are many opportunities to educate yourself or to engage in peer learning with other funders. This has the added benefit of giving you a chance to connect with a like-minded community while you learn, and possibly even leverage your giving by combining resources with other funders in strategic partnerships. Watch the event calendar and email list of your local community foundation or regional association of grantmaker list. These types of organizations often present webinars or panel discussions where funders can learn about trust-based philanthropy (and many other topics).