#TrustCreatesImpact—Now More Than Ever

In the US, groups like the Trust-Based Philanthropy Project and The Whitman Institute have worked to shift the culture of philanthropy to focus on sharing power, working collaboratively, and building trust-based, equitable relationships. As the sector and the world have grappled with COVID-19 in recent months, it’s clear that the work these groups have elevated is becoming both increasingly critical and embraced as evidenced by the positive response to the Council on Foundations pledge, for instance. Our colleagues in Germany are having similar conversations and are facing similar challenges as they navigate how to sustain the trust-based responses funders are having in this pandemic for long-term change. NCFP is heartened to see trust-centered philanthropy gained traction globally, and hopes funders who have adopted these approaches now will continue their practices well beyond their COVID-19 responses.

The German philanthropy initiative #VertrauenMachtWirkung (#TrustCreatesImpact) has sparked a discussion around the leadership skills and practices foundations need to tackle complex social challenges. Amidst the COVID-19 pandemic, this conversation is more important than ever.

Crisis brings out the best and the worst in all of us, the same applies to current philanthropic giving against the background of an unprecedented global situation. In light of the economic crisis, some foundations are cutting their budgets and freezing grants. This exacerbates stress for NGOs that are already under increased pressure, all while trying to support the rising number of people who suffer physically, financially, or psychologically from the effects of COVID-19. Other foundations had the immediate urge to pick up the phone—they called their grantees with the intention to get a deeper understanding of how they can best support them to successfully survive this crisis and continue their services for people in need. Out of these phone calls came emergency and recovery funds that provide immediate unrestricted funding, adjusted milestone plans, and most importantly, robust partnerships built on trust.

From “mind-shifting gear” into “action gear”

A flexible funding approach is not only important for the grantees but is also a significant development within the philanthropic community that has been talking about trust-based philanthropy for quite some time. However, before the crisis, foundations (at least in Europe and especially in Germany) were still discussing what trust-based philanthropy really means and what it would look like in practice. The sector was in “mind-shifting gear,” carefully considering how to change its mindset and behaviors. The pandemic has urged foundations to quickly change from “mind-shifting gear” into “action gear”, revealing that funding partnerships based on trust enable foundations to quickly understand what their partners on the ground really need.

How to ensure that these changes in mindset and action last?

1. Incorporate diversity and participation

To live up to their social responsibility, foundations must exemplify diversity, gender equality, and participatory decision-making processes and implement these in their support and project work.

2. Listen carefully

Foundations must listen. Not only to those whom they support, but also to all other relevant actors in society who have something to say. By listening and interacting as equals, one learns to critically question one’s own assumptions, which has a direct impact on the quality of one’s own work.

3. Share power

When foundations design programs jointly with grantees and involve them in decision-making processes, they consciously act against the power gap and strengthen the social impact of their actions.

4. Be transparent

To enhance the credibility and legitimacy of their work, foundations must become more transparent. This means that foundations should disclose funding criteria and decisions, share experience, knowledge, intentions, and data, and interact with partners in an open and respectful manner.

5. Work collaboratively

Foundations are aware of important synergies that can result from partnerships. Cross-sector partnerships between public institutions, businesses, foundations, entrepreneurs, citizens, and nonprofit organizations have many effects: They combine individual efforts, achieve greater scope and attention, improve mutual understanding, and increase the knowledge of all actors involved.

6. Innovate

No matter whether they intend to proactively change existing systems and structures, or whether they want to preserve positive aspects, the following applies in any case: Testing innovative solutions is comparatively unproblematic for foundations because they act independently and plan long-term. They can be risk takers. However, the fact that grants are only awarded on a one-off basis prevents many foundations from breaking new ground. But the benefits are substantial: Foundations gain new insights and can achieve high impact.

7. Talk about mistakes

When foundations share their experiences, mistakes and failures have positive effects: They strengthen the knowledge and competencies of organizations and the sector at large. This transparency also builds trust with nonprofits, encourages other funders to be more transparent, and indicates a commitment to learning from mistakes.

8. Fund unrestricted

For a strong civil society to be based on robust organizations and not on constant competition between potential grantees, foundations must provide sustainable support. It is therefore important not only to fund projects, but also to provide structural support. The foundation capital should also be invested sustainably and in line with the purpose of the foundation, thus acting as a catalyst for social change.

9. Build capacities

Nonprofit organizations often require more than traditional project funding to be successful and effective in the long term. Some of are better served if foundations make contacts and provide experts, create access to networks, contribute their know-how or get involved with their capital.