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At the Gates Foundation Greater Giving Summit last spring, there was a hearty discussion about how we leaders in philanthropy should approach our work with a stronger equity lens. The conversation highlighted how methods used to pursue greater impact in recent decades have either reduced or not improved equity. The data shows that black-founded nonprofits, for instance, are still much less likely to receive funding, all things equal. Trust-based philanthropy, the essential role of proximate leaders, collaborative philanthropy, and other concepts were discussed as ways to foster equity.
This is reflective of the broader discussion in the philanthropic industry: the tension between the “effective giving” paradigm of the last few decades and the emerging “equity” paradigm most prominently represented by trust-based philanthropy.
Here, I’d like to explore the tension between the effectiveness and equity paradigms and highlight forthcoming new tools that we at Charityvest believe will foster the integration of the best parts of both through a new model I’m calling, “philanthropic agency.”
The Potential Pitfalls of Trust-Based Philanthropy
What nonprofit leaders want is a trust-based partnership. They want to know their financial partners understand the essentials of the complexity they face in creating impact, so resources can dynamically flow to what’s effective in line with opportunities. They want resources now, but they also want to feel they have partners who will be there to resource critical future opportunities, too. Building partnership around long-term effectiveness is critical.
In Pursuit of Scalable Trust-Based Partnership and Proximity: Agency
It needs to be noted, trust-based grantmaking done well is not easy. Listening, learning, and acting in partnership requires thoughtfulness, good relationships, and attention. That requires time. Done poorly, it puts time overhead on nonprofit leaders, too. A single grantmaker can’t build close partnerships with 20 organizations, nor can a nonprofit leader have 20 funders requiring their time to “learn.” How, then, do funders achieve proximity at scale without putting time and attention burdens back on the organization?
Philanthropy advisors can help funders move up the Y axis on the chart with greater scale, but a new model is needed to help funders increase their proximity without burdening nonprofit leaders.
“Philanthropic agency” can do this.
Akin to donor collaboratives, philanthropic agency calls for funders to relinquish their grantmaking rights and place trust in someone (an agent or agents) who has an impact-oriented mind and is partnered with organizations “on the ground.”
Read the full article about philanthropic agency by Stephen Kump at The Center for Effective Philanthropy.