Why Trust-Based Philanthropy Matters Now More Than Ever

In the evolving landscape of philanthropy, it has become increasingly clear that genuine partnerships built on trust are essential for driving deep, sustainable impact.

Having worked with funders of all types and sizes for 20 years, I have seen firsthand how powerful funder-recipient relationships can be when they are organized, communicated, and managed effectively and efficiently. When both parties commit to building a genuine partnership, the benefits are mutually transformative.

What Is Trust-Based Philanthropy?

At its core, trust-based philanthropy represents a fundamental shift from traditional, top-down grantmaking approaches to a model that values partnership and equity. This approach acknowledges that nonprofits are the true experts in their fields and should be trusted to determine how best to use funds to achieve their goals. It minimizes burdensome requirements, simplifies grant processes, and fosters open dialogue between funders and grantees.

Let me be clear: building trust begins with open, honest communication and collaboration. When funders and nonprofits start dialogues as partners, nonprofits have the opportunity to be transparent about their needs and challenges, and funders can — and should — be open to receiving feedback.

Here’s where funders, in my observed experience, have inadvertently caused harm:

• Ghosting Nonprofits: When funders fail to follow up after an initial conversation, it creates uncertainty and frustration. If a nonprofit isn't a fit, funders should clearly communicate why and provide constructive feedback. Even a simple, direct message explaining that an organization is outside of their funding scope, along with recommendations for more suitable funders, would be far more respectful than silence.

• Hosting One-Sided Roundtables: Roundtable events where funders speak at nonprofits about how to apply for grants but are unwilling to listen to feedback about their application processes or nonprofits’ actual needs create a one-way street. For trust-based philanthropy to work, these dialogues must be two-sided, with funders genuinely listening and responding to the input from nonprofits.

• Making Nonprofits Jump Through Unnecessary Hoops: When funders require nonprofits to navigate complicated applications, submit excessive documentation, or provide repetitive reports that don’t align with the funding amount or the actual impact of the grant, they inadvertently undermine the effectiveness of their support. Simplifying these processes not only shows respect for the nonprofit’s time and expertise but also demonstrates a willingness to work as partners in achieving common goals.

Common Misconceptions About Trust-Based Philanthropy

Several myths prevent funders from adopting a trust-based approach:

1. "Trusting nonprofits means giving up control."
   Trust-based philanthropy does not mean funders relinquish all control. Rather, it encourages a dynamic where both parties are accountable and transparent, allowing for more flexible and responsive grantmaking.

2. "It leads to less impact."
   The opposite is true. By trusting nonprofits to use funds where they are needed most, funders can enable organizations to respond to real-time challenges and opportunities, thereby maximizing impact.

3. "We shouldn't measure or evaluate our work."
   A common misconception is that trust-based philanthropy discourages measurement or evaluation. This isn't the case. However, many nonprofits, due to the power dynamics in play, might not always feel comfortable being transparent about their challenges or unmet needs. Trust-based philanthropy aims to create a safe environment where honest dialogue is encouraged and where funders and nonprofits can work together to address issues openly.

An Example of Why Trust-Based Philanthropy Is Necessary

Consider this: A grant of $1,000 to $2,500 that requires a six-page, single-spaced written document, 10 attachments, and multiple progress reports does not justify the work spent applying for the grant.

A more effective alternative could be for funders to allow nonprofits to submit a simple letter of intent or a brief concept note before requiring a full proposal. This step helps nonprofits understand if their project is a good fit and reduces wasted time and effort on both sides.

A Local Example of Building Trust-Based Partnerships

The Central Florida Foundation (CFF) exemplifies what trust-based philanthropy can look like. CFF focuses on building community and coalitions and by listening to the challenges nonprofits face before offering solutions. They prioritize understanding the real needs and contexts of the organizations they support, ensuring their funding aligns with the impact goals of the community. This approach builds trust and makes their philanthropy far more effective.

Taking the First Steps Toward Trust: Insights from the Tides Foundation

If you're a funder interested in adopting a trust-based approach, there are several steps you can take to start building trust with nonprofits. According to the Tides Foundation, it starts with asking critical questions to unpack the blocks to trust:

1. Examine Your Power Dynamics:
   Consider how power imbalances may be affecting your relationships with grantees. Be open to shifting the dynamics by being more approachable and accessible.

2. Embrace Transparency:
   Be clear about your decision-making processes, criteria, and priorities. Share this information openly with grantees to build trust and foster mutual understanding.

3. Offer Multi-Year, Unrestricted Funding:
   Long-term, flexible funding shows trust in a nonprofit's leadership and vision. It allows organizations to plan ahead and adapt to changing circumstances without constantly worrying about securing their next grant.

4. Simplify Applications and Reporting Requirements:
   Streamline your grant processes to reduce the administrative burden on nonprofits. This not only saves time and resources but also shows respect for the organization's work and expertise.

5. Foster Open, Honest Communication:
   Create safe spaces for grantees to share their challenges, successes, and even failures without fear of losing support. Encourage regular, two-way feedback to build stronger partnerships.

6. Commit to Continuous Learning:
   Trust-based philanthropy is an ongoing journey. Commit to regularly assessing your own practices, learning from others, and evolving based on the feedback you receive from your grantees.

Submit Your Feedback!

One way to help shift these dynamics is to encourage transparency and accountability from funders. Organizations like GrantAdvisor.org provide a platform for professionals, consultants, and grant seekers to rate funders and share honest feedback. By promoting transparency on both sides, we can work together to build stronger, more effective partnerships.

Conclusion

Trust-based philanthropy isn't just the right thing to do—it's the only way forward if we are serious about maximizing impact and creating meaningful change. Let’s challenge ourselves to embrace this approach, learn from each other, and build the kind of relationships that will benefit both funders and the communities they serve.

photo credit: charlesdeluvio