The debate around trust-based philanthropy often gets stuck in semantics and theory.
“The idea of trust-based philanthropy itself is a myth,” one critic wrote. He explains that trust-based philanthropy isn’t what it claims to be because some funders use consultants to help vet organizations behind the scenes.
This kind of critique shows a fundamental misunderstanding of what trust-based philanthropy is—a misunderstanding that can derail very real progress trust-based philanthropy has made and hinder authentic conversations about its next steps. If you’re not familiar with the Trust-Based Philanthropy Project, the group leading the trust-based movement, read about their mission.
For funders who are truly interested in understanding trust-based philanthropy, these debates aren’t useful. There’s a lot of hot air and posturing, and plenty of not-very-useful hypotheticals.
To learn the full potential of trust-based philanthropy, instead look to the organizations that are putting trust-based values into practice, learning from their experiences, iterating, and evolving.
Yield Giving leads with trust
Misconception: Trust means a lack of accountability for nonprofits.
Reality: Trust allows nonprofits to be accountable to their communities, not funders.
Trust-based philanthropy is not about abandoning accountability. Rather, it’s a reorientation of who is accountable to whom.
Yield Giving has distributed over $17 billion to more than 2,300 nonprofits through a series of grants. Before awarding funds, the Yield Giving takes time to vet organizations. They find organizations that are trusted by their communities and have a track record of delivering on their promises. And then they give them unrestricted funding.
Yield Giving’s approach shifts away from grantees trying to prove their worth or “dancing for their supper” as Pia Infante, Senior Fellow at the Trust-Based Philanthropy Project, explained it. The nonprofits are already doing essential work in their communities. Yield Giving trusts that those teams know best how to use the resources they’re given.
In an essay on one of the early rounds of funding, MacKenzie Scott explained what trust means practically: “We shared each of our gift decisions with program leaders for the first time over the phone, and welcomed them to spend the funding on whatever they believe best serves their efforts. They were told that the entire commitment would be paid upfront and left unrestricted in order to provide them with maximum flexibility.”
The billions in unrestricted funds Yield Giving has disbursed over the years have helped thousands organizations expand programming and become more resilient for the long term. That resiliency gives communities the ability to plan for the long term and be proactive to create change.
For Yield Giving, trust is a result of their process. They offer a great example of how to achieve trust without sacrificing accountability or overburdening nonprofits.
The Headwaters Foundation centers relationships
Misconception: Centering relationships means outcomes don’t matter.
Reality: Centering relationships makes outcomes more authentic and longer lasting.
Relationships are at the core of trust-based philanthropy. Strong relationships between funders and grantees mean that there’s a two-way street of trust and dialogue. That trust and dialogue empowers nonprofits to advocate for what they need when they need it, and gives them a true partner to solve problems alongside.
At the Headwaters Foundation, which supports community organizations in Western Montana, building strong relationships is an explicit goal, not just a means to an end. Their team understands that priorities and processes must create the right conditions for funders and grantees to build relationships.
Rather than imposing their perspective upon grantees, they let grantees define what they need on their own terms. The foundation aims to provide whatever grantees need to be successful and resilient. They even did a grantee needs assessment to understand their grantees’ biggest challenges.
Based on feedback, the Headwaters Foundation created a meeting space in their facility and opened it up to all their partners. They also provide technical assistance and coaching. When it was time to choose a focus area for their funding, they went out into the community to learn what community members believed was most important. That’s how they landed on early childhood development as a focus area.
As they strengthen their relationships within the community, the foundation is better positioned to address the most pressing issues and create lasting change.
Thousand Currents collaborates with humility and curiosity
Misconception: Collaboration only works when funders enforce strict parameters.
Reality: Collaboration must be rooted in humanity and should make room for experimentation and flexibility.
Trust-based philanthropy asks funders to approach collaboration with humility and curiosity, rather than assuming that they know better than their grantees. This can be a big shift for funders who are used to playing the role of “expert.”
One critic of trust-based philanthropy, describes his organization’s approach as “tough love.” They only fund nonprofits that earn their “seal of distinction” by hitting certain quantitative metrics. Because the metrics are determined by the funding organization, they might not reflect the needs and values of the communities. And even if they do, there’s the issue of Goodhart’s Law, which posits that “when a measure becomes a target, it ceases to be a good measure.” If nonprofits only get funding when they hit certain metrics, they might start to avoid serving people or populations that don’t reliably hit those benchmarks—often the groups that need support the most.
Thousand Currents is an organization that embraces the tenets of trust-based philanthropy. They aim to get resources directly to impacted communities across Africa, Asia and the Pacific, and Latin America and the Caribbean. Collaboration for them includes an understanding that real people’s stories are complex. They make room for these complexities and make an effort to understand the broader social and historical context around people’s stories, rather than viewing them solely as metrics.
For Thousand Currents, collaboration means putting decision-making power in the hands of community members. They value long-term partnerships more than short-term outcomes because they are interested in systems change.
One great example of their curiosity and humility is their expansive understanding of what it means to scale; it’s not necessarily just getting bigger. “Scale can be depth, can be breadth, and it can be influence,” writes Solome Lemma, executive director of Thousand Currents.
By letting community members lead the way, Thousand Currents supports programs that actually work. Because when funders assume they know what a community needs, it can lead down some really unfortunate roads.
Neighborhood Funders Group redistributes power
Misconception: Funders should be the ultimate decision makers because their outside perspective allows them to be objective.
Reality: Community members closest to the issues are the best experts in creating and implementing programs that actually work.
Local communities are the ones who best know how to solve the issues they deal with. They understand the social and historical context, the complexities of the way injustices intersect, and the cultural nuance needed to make programs work. Trust-based philanthropy means putting decision-making power in their hands.
When local communities don’t have decision-making power or aren’t involved in the process, you end up with programs like the notoriously ill-designed One Laptop Per Child initiative. Rather than asking communities in the developing world what they needed, program designers imposed their beliefs that laptops would make a real difference.
They didn’t set up the infrastructure, support, and training needed. In the end, the program was a public failure. Community members predicted this failure because they knew it didn’t solve the problems they needed to solve, but no one bothered to consult them.
The Amplify Fund from Neighborhood Funders Group is a great example of an organization that seeks to redistribute power to local communities. In fact, power redistribution is one of its explicit goals as a funder. Within their programs, community leaders identify what their communities need, so that it’s not a one-size-fits-all strategy for all grantees. Strategy is tailored to the place and the situation.
Amplify Fund uses a participatory process to involve grantees in the vision setting process for the organizations. Grantees were the ones who created Amplify Fund’s new governance model is led by a Co-Leadership Committee made up of grantees (75%) and a few funders (25%). The Committee’s purpose is to hold Amplify Fund accountable to its vision, values, and goals.
One important component for the Amplify Fund team is the way they reflect and iterate on their process. Through reflection, the team realized that although they had local participatory processes for strategy development, they didn’t have a plan for monitoring progress. As they refresh their grantmaking strategies, they aim to incorporate tailored, place-based learning plans for progress monitoring.
Power redistribution won’t happen by accident. Like Amplify Fund, funders must build processes that put grantees in the position to make decisions.
North Star Fund works for systemic equity
Misconception: Focusing on systemic change distracts funders from programmatic goals.
Reality: Connecting programs to broader systemic change ensures that they don’t unintentionally perpetuate injustice.
Within trust-based philanthropy, every funder should make an effort to connect their programs to broader systemic change they are working toward. Without that vision, funders can design or structure programs in a way that perpetuates the very issues they’re trying to solve.
Crappy Funding Practices is an account dedicated to calling out funders whose processes are inequitable and burdensome. Their posts highlight how many grantmakers who claim to focus on equity actually create applications and expectations that perpetuate inequality. If funders don’t have a broader vision that ladders programmatic goals up to systemic change, inequity can seep into every stage of their process.
North Star Fund is a prime example of a funder who builds their programs around creating systemic change. Their mission is to “support grassroots organizing led by communities of color building power in New York City and the Hudson Valley.” They organize people across race and class to give in support of these movements.
With only 5% of philanthropic dollars going to social justice, and less to Black-led organizations, the fund is dedicated to addressing this discrepancy by supporting Black-led social justice organizations.
North Star Fund aims to fight police violence and structural racism, and they anchor their programs to these big goals. Their Let Us Breathe Fund has achieved tangible gains such as: the creation of a Special Prosecutor for police-related violence (the first in the country), reshaping the state Parole Board, and the passage of the “consent to search” portion of the Right to Know Act.
By linking programs to systems change, North Star Fund can make real, lasting progress for the communities they serve. And they act as a model for other funders who want to do the same.
You can put trust-based values into practice today
Trust-based philanthropy is not a switch you can flip. And it won’t solve every issue in philanthropy.
It’s a framework and set of ideals, which only work when funders approach them with openness and genuine curiosity. But for funders willing to put in the work, trust-based philanthropy has the potential to make programs more effective, relationships stronger, and systemic change possible.
As a big part of what enables your work, the technology you use has to be designed to support trust-based principles. Learn more about how to choose the right grant management software for trust-based philanthropy.
Laura Steele is a social impact writer and editor at Submittable focused on the world of grantmaking and corporate giving. Her work often explores the connection between technology, equity, and social good. She also writes fiction and nonfiction. You can read some of her stories and essays at laurapricesteele.com.