Giving Compass' Take:

• Both The Patterson Foundation and the Ford Foundation set an example by utilizing trust-based funding, a model that allows for change to happen in organizations once foundations let go of ownership. 

• What are the differences between funding capacity-building and trust-based funding? 

• Read more about the philosophy of trust-based grantmaking.

At The Patterson Foundation (TPF), philanthropy is approached as a tool to discover possibilities rather than solutions. TPF stands, as of today, quite unique in the independent foundation world in that there are no grant cycles, no requests for proposals, no timing limitations to its funding relationships.

Recently, I had the opportunity to learn about the Ford Foundation’s BUILD Program from the expert herself, Kathy Reich. If you’re unfamiliar with the BUILD Initiative, it is, in essence, a portfolio of longer-term, capacity building grants in a 1-4 model: one year of planning, four years of implementation.

From my perspective, the true commonality between TPF and the BUILD program comes down to one quote: “Change happens at the speed of trust.” The Patterson Foundation and Ford Foundation are not the only organizations investing in what I would argue is “trust-based funding” rather than capacity building. This type of funding, which involves extensive due diligence and the ability, to some degree, to let go of ownership plays to an alternative answer to the question we should all be asking, “How does change happen?”

Change happens when organizations doing the work are confident that they can make payroll. When organizations are confident in the ability to cover the mundane and invest in their people, possibilities begin to open. What was once a dream for someday when sufficient support would appear is now a plan to put into action because nonprofits trust that they have partners who know change takes time.

In the philanthropic landscape (which, by the way, includes all organizations working for “the public good,” not just foundations), there are an infinite number of smart and passionate people. So I urge you to contemplate, who said funding needs to look like it does?

Read the full article about trust-based funding by Hannah Saeger Karnei at Lilly Family School of Philanthropy.