Trust-Based Philanthropy: Shifting Power to Communities

This article was originally published by Citi GPS: Global Perspectives & Solutions and is re-posted here with permission.

Philanthropy is a complicated pursuit. Donors are committed to supporting their grantees to advance social progress, yet they hold a disproportionate amount of power, and operate within an inherently inequitable system that often perpetuates harm. Foundations and donors have virtually all the power in determining where, to whom, how, and when money is redistributed in service of their vision for social progress, and there are typically few pathways for those with lived experience to make decisions, drive strategy, or share feedback.

In recent years, a different approach has gained momentum: trust-based philanthropy. While many of the ideas posited by this movement are not new, the approach reflects a comprehensive set of values and practices that embodies what it means to share power with nonprofits and communities. Trust-based philanthropy approaches have reached a broader and increasingly receptive audience in recent years with the creation of initiatives such as the Trust-Based Philanthropy Project that are working to advance peer learning and adoption of the approach. The global pandemic, racial reckoning, and a mounting climate crisis have all highlighted philanthropy’s inequities, and increased the momentum of trust-based approaches. However, trust-based philanthropy is not a crisis response, it is a model of effective philanthropy. And it is not merely a trend in the U.S., but a sustainable approach taking root globally.

Trust-based philanthropy offers a modern approach to governance, grantmaking, and operations and promises to deliver better outcomes — as long as philanthropy is realistic about how change happens and who defines success. Recognizing the inherent limitations of funders making decisions about issues they may not have direct experience with, trust-based philanthropy provides a path for redistributing power and resources to nonprofits and communities in a more equitable and effective way. In short, if funders and donors truly want to make a difference in our unpredictable society, we must give up some of our power and listen to the leadership of those closer to the ground. That starts with humility, a commitment to relationship building, and a willingness to give up some power and control. And it also includes a clear set of practices that, when applied holistically, can help advance a healthier and more equitable nonprofit ecosystem and society.

Six Practices of Trust-Based Grantmaking

The Trust-based Philanthropy Project has identified six core practices that, when practiced holistically, contribute to more equitable, trust-based relationships between funders and nonprofits.

• Give multi-year, unrestricted funding: The work of nonprofits and nongovernmental organizations is long-term and unpredictable. Multi-year, unrestricted funding gives grantees the flexibility to assess and determine where grant dollars are most needed, and allows for innovation, emergent action, and sustainability
• Do your homework: Oftentimes, nonprofits have to jump through countless hoops just to be invited to submit a proposal. Trust-based philanthropy moves the onus to grantmakers, making it the funder’s responsibility to get to know prospective grantees, saving nonprofits’ time in the early stages of the vetting process.
• Simplify and streamline paperwork: Funder-driven applications and reports can take an inordinate amount of time, and distract from mission-critical work. Streamlined approaches — focused on dialogue and shared learning — can pave the way for deeper relationships and mutual accountability.
• Be transparent and responsive: Open, honest, and transparent communication will help support relationships rooted in trust and mutual accountability. When funders model vulnerability and power-consciousness, it signals to grantees that they can show up more fully.
• Solicit and act on feedback: Philanthropy does not have all the answers. Grantees and communities provide valuable perspectives that can inform and guide a funder’s strategy and approach, inherently making our work more successful in the long run. Organizations like the Fund for Shared Insight have resources on how to ask for and use feedback.
• Offer support beyond the check: Responsive, adaptive, non-monetary support bolsters leadership, capacity, and organizational health. This is especially critical for organizations that have historically gone without access to networks or level of support than their more established peers.

Infusing Trust-Based Philanthropy in Your Philanthropy Beyond Grantmaking

Trust-based philanthropy requires that you reflect deeply on your role in the greater ecosystem of change and impact. Donors and foundations are just one set of actors in a large, complex system. Learning what it takes to advance lasting, meaningful change is contingent upon your ability to trust and collaborate with those who are closest to the issues you seek to address. Since this approach is fundamentally about redistributing power, a true embodiment of trust-based philanthropy goes beyond grantmaking alone, and has implications for your culture, values, and leadership. While many funders consider grantmaking to be at the fore of their work, applying trust-based values to the full spectrum of your philanthropic effort will shift your culture, not just your processes.

Philanthropic Purpose
Trust-based philanthropy invites funders to consider how power-sharing and equity can be incorporated into your philanthropic purpose — your mission, vision, values, and priorities — which are at the core of your work. Your philanthropic purpose should be what guides you in making difficult decisions and what binds you together as a family. Is your organizational purpose and theory of change informed by those doing the work on the ground? Do your articulated values acknowledge power, relationships, and accountability to the community? Do any of your articulated values unintentionally reinforce power imbalances? Are there any assumptions or biases implicit in your existing values statements?

Practice in Action
A growing number of foundations are explicitly articulating and sharing their values and purpose on their websites. Doing so helps ensure they stay accountable to these guiding forces, and can serve as a touchstone to inform philanthropic decisions and strategies. For instance, the Satterberg Foundation in Seattle has articulated its commitment to equity on its website, noting that “when we center and trust communities who are most impacted by environmental destruction…we create a sustainable environment where humanity and the natural world are in balance.” Living into these values, the Foundation made a pause to its 2020 core support grants in order to evaluate its current portfolio, and identify gaps in its funding areas as well as “how we may better hold ourselves accountable to our BIPOC communities.” As part of this assessment, the foundation pledged an additional $50 million, at minimum, to support Black, Indigenous, People of Color (BIPOC) groups over the next 10 years.

Governance
Governance is the decision-making structure that guides your philanthropy’s work. Governance determines who makes decisions and how, and provides guidance to your overall philanthropic strategy. In traditional philanthropy, grant decisions and strategic directions are often held by a small group of board members and executive leadership, with very little integration of perspectives outside that bubble. A trustbased approach encourages us to incorporate feedback and insights from those who will be most affected by those decisions. Reflect: how centralized (or decentralized) are your decision-making structures? Do your decisions include opportunities for collective input, community perspectives, and stakeholder feedback?

Practice in Action
In recent years, the Stupski Foundation revamped its grantmaking process to transfer power from the board to staff and communities. In an article for PEAK Grantmaking, CEO Glen Galaich says, “When you examine your grantmaking process, I encourage you to note each time you hit one of those points where only a few people — or just one person — are making a decision, and consider how you can invite multiple perspectives to increase the opportunity for equitable outcomes, efficiencies, and more. Whenever possible, center the perspectives of the stakeholders most affected by your processes and decisions.”

Similarly, a growing number of family foundations are recognizing the limitations of having boards that are exclusively composed of family members; many are making intentional shifts to add non-family trustees to their boards to add people of color, nonprofit directors, and other community leaders who can add valuable perspective to the foundation’s governance.

Management and Operations
The nuts and bolts of administrating your philanthropy may not seem as exciting as the grantmaking work, but your operational practices are full of opportunities to adopt a trust-based lens that reflects your values and advances your mission. Who are you banking with? Are your personnel policies reflective of power-sharing or do they perpetuate top-down power imbalances? What does your office space and location signal to your staff and grantees? How cumbersome is your grant management system? Do you ask grantees to come to you, or do you usually go to them? When grantees call your office, do they hear an automated message or are they able to reach a human being?

Practice in Action
The Hill-Snowdon Foundation (HSF) intentionally developed a policy about staff well-being, stating on its website:

“HSF’s ‘people first personnel policies,’ push us to seek ways to support the wellbeing of staff by providing abundant support to help them and their families to thrive, with the understanding that as they thrive so too will the Foundation, our allies and our grassroots partners.”

HSF recognizes that in order to build thriving communities, its workplace must be an example of a thriving space, where staff are able to build trusting, meaningful relationships with their grantee communities.

While HSF developed a personnel policy that aligned with its trust-based values, the Nathan Cummings Foundation (NCF) considered how its physical space reflected its values. NCF moved its offices in 2020. Board Chair Jaimie Mayer said, “Finding an office space that embodies our commitment to social justice and equity was of utmost importance to us.” NCF says it designed its space “to deliver democratic access to all features and emphasize openness, flexibility, and collaboration.” NCF’s deliberate choice of space is meant to demonstrate a commitment to collaboration. They are not only seeking to build relationships through their grantmaking, but to create a physical space where collaboration can be fostered.

Assessment and Learning
Learning about the work of your grantees and the impact of your own work — and adjusting accordingly — are crucial parts of improving your philanthropic practice. In philanthropy, the focus is often on evaluating grantees’ performance: Did they accomplish what they set out to do with the resources you provided? Trust-based philanthropy encourages a more expansive lens on learning about grantees’ work. Rather than holding them accountable to pre-determined outcome measures, how can you approach these relationships with greater openness to learn about what’s working well, and what’s not working so well? How can these conversations help establish a bigger picture understanding of the work at hand, the real barriers that come up, and how you may be able to support that work from your philanthropic seat? Beyond this, it’s equally, if not more, important to evaluate your own role and learn from your successes and mistakes as a grantmaker. This often includes engaging in deep and intentional listening with community partners and soliciting feedback in an equitable manner. How well are you delivering on your promise to supporting grantees’ effectiveness? How can you improve your work and approach in order to build greater trust? Are your evaluation practices leaving room for mistakes, risk taking, and learning? Are you learning from your grantees and recognizing them as subject matter experts?

Practice in Action
The Overdeck Family Foundation recently announced a change to its funding
model, in light of feedback from their grantees.

“At the heart of this work was feedback from our grantees, who had asked us to consider incorporating more transparency into our decision making process, less reporting burden, longer grant terms, and more support outside of funding dollars.” Not only does this shift incorporate important grantee feedback, but Overdeck is also closing the feedback loop by telling their partners what changes they’ve made with the feedback they received — demonstrating that they listened and value the feedback they received.

The Nord Family Foundation’s Executive Director Tony Richardson also recently
shared a trust-based perspective on learning. Effective organizations value learning and only fall short when they embark upon an endeavor and fail to learn from it. Such organizations have a clear vision: they know their strengths and limitations, they constantly reassess, and they are unapologetic about who they seek to serve.

Legacy
Building your philanthropic legacy is not a passive process that happens to families. With a trust-based lens, it can be something you craft with intentionality and continually refine, with the help of your community partners. As Surdna Foundation Trustee Kelly Nowlin states, “The idea of legacy doesn’t have to be a rigid, prescribed mandate. To be effective philanthropists requires that we address the issues of our day, understand the history of systems and policies that have led to racial inequality, listen to those most impacted by the issues we are supporting, and learn, take risks, innovate, and persist.” What legacy do your grantees seek to create and are you augmenting that vision?

Practice in Action
As highlighted in Legacy in Family Philanthropy: A Modern Framework, for many families, central to the legacy they wish to put forward into the world is using their privilege to create power for others — a commitment to social justice and equity. For these families, this looks like shifting the focus from their own family philanthropy out into the communities they’re most invested in as change-makers. Caitlin Heising, a donor-advised fund donor and vice chair of the Heising-Simons Foundation, explains:

“It’s about how we can use this wealth that none of us created and none of us have the right to have in order to support communities that have been underserved and left out of decision-making tables for generations. Our goal should be to support them in building leadership and making the world a more just and fair place…I don’t like to think about it as centering us; it’s about the partners doing the work and the people impacted by that work.”

In a recent blog post for the Center for Effective Philanthropy, LaTida Smith
recognizes the role that the foundation she leads has in the larger funding
ecosystem.

“I had to step back and acknowledge that Moses Taylor Foundation is just one piece of the puzzle for our grantees. Their needs always surpass our capacity. They are not looking for us to save them. They just hope we’ll listen and be smart about the support we provide.”

Indeed, grantees are not looking for funders to save them. It is our hope that
widespread adoption of the tenets of trust-based philanthropy will shift our
institutions such that philanthropy will embrace its role to be in deep relationship
with communities and trust them to do the valuable work our world needs.

Nick Tedesco is the president and CEO of NCFP

Shaady Salehi is the director of the Trust-Based Philanthropy Project