Grantmaking organisations and grantseekers are bent on eradicating social ills such as racism, patriarchy, colonialism and other forms of oppression. However, a glance at traditional philanthropy and the history of resource collection and distribution reveals that the fundraising sector is sometimes held back by these same vices.
Thankfully, it’s a new dawn for the grantmaking sector as a relatively new approach can help flip the script on traditional philanthropy and address any shortcomings.
Enter trust-based philanthropy!
What is trust-based philanthropy?
Trust-based philanthropy is a funding model focused on redistributing power systemically, organisationally and interpersonally to build an equitable non-profit sector suitable for all participants.
Entrenched in a set of values that nourish equity, power balance and mutually accountable relationships, trust-based philanthropy is an increasingly effective funding approach for grantmakers.
This approach recognises that there can be more impressive results if the relationship between grantmakers and grantees are built on partnership, trust and accountability. So, it calls on funders to:
- Recognise the power imbalance between funders and grantseekers and work purposefully to address it
- Disrupt the cycle of inequity
- Prioritise transparency and respect
- Value and honour the relationship with the grantee
There are some in the grantmaking sector who have employed and tested this approach already, and their enduring endeavours have resulted in the Trust-Based Philanthropy Project, launched in early 2020 to address the inequities of the non-profit sector.
Indeed, with the tumult of 2020 and the years that have followed, trust-based philanthropy has emerged as a valuable crisis solution. Funding organisations previously besotted with rigidity and formality have adopted a value-driven viewpoint for the swift distribution of resources without complexities.
Is your funding organisation interested in a more effective approach towards philanthropy? Read on for pointers on how to foster and get started in trust-based philanthropy.
How to foster and get started in trust-based philanthropy
For trust-based philanthropy to be in full effect in a grantmaking organisation, six principles need to be employed. These principles guide four prime dimensions of the funder’s operations: the culture, structures, organisation and leadership.
Let’s consider these principles.
1. Provide multi-year general support
To foster and get started in trust-based philanthropy, funding organisations have to concern themselves with allocating resources to where they are most needed. Instead of obsessing over project-specific grants, they need to make available long-term flexible funding.
It’s natural for funders to question the grantseekers’ capacity to properly monitor and manage the funds made available to them. To promote TBP, funders have to alter these dynamics and come to terms with the fact that:
- Being a funding organisation doesn’t necessarily mean you are best positioned at managing the resources.
- Current and potential grantees know best how to spend the resources made available to them.
So, as a funder, ensure you hear out the grantseekers for insight into the prospects and hurdles they face. Then proceed to ensure multi-year general support by:
- Making commitments for more than one year
- Giving grantees the liberty to deal with the resources as they deem fit
- Eliminating any form of transactional grantmaking
- Rigorously auditing your organisation’s processes to expose any biases impeding multi-year unrestricted support
Multi-year flexible funding ensures the stability of the grantees and encourages innovation. Also, it enables long-term planning and gives grantees the confidence to make strategic long-term investments. Ultimately, it embodies trust and indicates that the funding organisation is interested in the grantee as a whole as opposed to just a particular program.
2. Due diligence is your responsibility
If you’re keen on promoting trust-based philanthropy in your organisation, then it behoves you to sniff out prospective grantees and the concerns in your funding terrain.
Don’t wait for the grantees to educate you!
Doing your research as a funding organisation results in a prompt and hassle-free vetting process for non-profits, giving them room to focus on what matters the most. Also, it breeds equity, trust and a mutually beneficial relationship – all of which are hallmarks of trust-based philanthropy.
To begin with, give all grantees the unfettered opportunity to put themselves forward. You can accomplish this by:
- Reducing the pre-proposal requirements
- Keeping the door open and doing away with an invitation-only process
- Following up to get more information when it’s needed
Once the grantees are in your line of vision, source information that will give you a better understanding of each grantee’s purpose, operating model and financial status. To get such information, you can scour the internet and other available public records or even talk with their collaborators and program participants.
Extend your reach to find other worthy non-profits aligned with your funding organisation’s values. Connect with them to find out their strategy and goals. Also, reassess your grantmaking policy to ensure that it attends to deserving non-profits that may be flying under the radar.
3. Cut the bureaucracy
Endless paperwork is a prime feature of traditional philanthropy. Grantseekers have to deal with funders’ countless requirements, specifications, formats, styles and approaches. The burdensome process of writing proposals and reports is worsened by many grantmakers asking pointless and identical questions.
Therefore, grantseekers spend an awful lot of time on the red tape.
To foster and get started in trust-based philanthropy, funding organisations need to adopt a more relational approach – one that helps them gain a deeper understanding of the grantees’ work and saves everyone’s time. This approach essentially does away with the ocean of protocol that characterises traditional philanthropy.
Some steps that grantmakers can take to simplify the paperwork include:
- Creating a screening process that indicates the likelihood of funding
- Accepting proposals written for other funders
- Following up to get any necessary information that can’t be sourced elsewhere
- Employing a conversational approach or an oral reporting process in the form of in-person meetings, phone or video calls to learn more about the grantees’ work
- Adopting an open-submission policy that allows eligible grantseekers to apply at anytime
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 grantseeker to give attention to their mission-focused work. This approach is beneficial to the grantmakers as well as it’s more rewarding and helps them better fulfil their mission.
4. Emphasise transparency and responsiveness
To further encourage trust-based philanthropy, funding organisations need to understand that grantees aren’t “the other party”. Instead, they are actual partners who bring so much to the table in terms of knowledge and experience; so, there must be trust and accountability.
This implies that the grantmakers that are keen on fostering and getting started in trust-based philanthropy must demonstrate transparency, awareness and vulnerability.
The essence of this principle is to build respect and trust by keeping current and potential grantees informed. So, one way to implement it is by stating clearly what missions you fund and don’t fund. Instead of nursing false hopes, grantseekers will know the chances of funding.
Also, if the funding organisation is making any change that will affect the current grantees’ funding, it’s imperative to give the grantees adequate notice. Funders should also state the motive behind their actions.
Grantmakers interested in effective philanthropy should share their challenges in candour and also invite grantseekers to open up about their struggles. This display of vulnerability:
- Shows grantmakers how they can be better partners
- Breeds mutual understanding
- Creates a fertile ground for an honest relationship
- Acknowledges the hitherto existing power dynamics with the intention of creating a more balanced relationship
5. Request and implement input
Grantmakers that are genuinely interested in effective philanthropy know that evaluation from grantees is fundamental. Their assessment helps you make sense of how beneficial your support is.
Therefore, to facilitate trust-based philanthropy, funding organisations need to solicit and act on the feedback from the grantseekers and the general community. With the latter’s expertise and experience, the grantmakers will make more informed decisions. In the event that the funders don’t implement the input, they have to communicate why.
Some ways to execute this principle include:
- Using anonymous surveys to find out what your grantee partners think about your practices
- Inquiring from grantees what they think about certain updates before effecting the updates
- Notifying the grantees of how their feedback was used or why it wasn’t used
This principle fosters trust-based philanthropy by indicating the grantmakers’ respect for the grantees. The grantseekers appreciate being seen and heard. Soliciting and acting on feedback begets authenticity and the discernment to help funding organisations better serve grantees.
Ask. Listen. Act or communicate back why you can’t.
6. Provide non-monetary support
Financial support is the heart of traditional philanthropy. However, trust-based philanthropy takes it a step further. For effective grantmaking, funding organisations need to come to terms with the fact that grantseekers could also use non-monetary forms of assistance.
It isn’t all about the Benjamins!
You can provide other responsive, adaptive non-monetary support by:
- Helping grantees build a network of funders and similar organisations
- Funding the grantees’ leadership with paid time off
- Helping the grantee partners prepare for when the leader is on leave
- Talent matching
- Encouraging thought partnership and meaningful conversations on social issues
- Lending offices for off-site meetings
- Giving the grantee partners audience to know what other needs they might have and helping them achieve their goals in general
Such support gradually builds the capacity of organisations over time and nurtures a profound sense of connection to the grantees and their mission. It further gives the grantmakers better room to understand the non-profits in an organisational context.
The various conversations make it possible for the grantee partners to voice what matters the most to them. Generally, the non-monetary support endorses the fact that the grantees operate in a larger background and that the grantmakers are solidly behind the grantee partners in every regard.
These principles save time, ensure that grantee partners exercise their creativity while spending the funds received and allow the grantees to focus on their core missions. Ultimately, they lead to a better grantmaker-grantee relationship with stronger outcomes.
If your funding organisation is making its first foray into trust-based philanthropy, then follow these principles as a guide. You won’t miss the mark.