In the world of nonprofit funding, a dynamic shift is occurring, driven by the need for equity and the reduction of power imbalances between nonprofits and funders. Traditionally, the relationship between these groups has been uneven, with funders holding significant influence over how nonprofits operate and report. Subsequently, nonprofits often find themselves aligning with a funder’s specific requirements, including their theories of change, metrics requirements, and reporting standards, in order to secure essential grant funding.

The resulting bureaucratic nature of traditional grant-making can pose a significant challenge for nonprofits, requiring them to navigate complex and demanding processes, and necessitating extensive documentation to prove their credibility and worthiness of funding. This approach, while primarily focused on mitigating risk, ends up placing a heavy and expensive administrative burden on nonprofits, favoring funders in the process.

But this landscape may be changing.

The COVID-19 pandemic catalyzed a shift towards more agile and unrestricted grant-making, driven by urgency and a heightened awareness of social and racial inequities. Trust-based philanthropy emerged as a new paradigm, emphasizing stronger, collaborative relationships between funders and grantees while also promoting mutual accountability. The concept of trust-based philanthropy centers around a set of principles aimed at rebalancing power dynamics.

Rather than focusing primarily on funding; it’s about fostering stronger, more empathetic relationships with grantees. One of the first steps in adopting trust-based philanthropy is a thorough internal review of practices, policies, and relationships. John Brothers, president of the T. Rowe Price Foundation, has experienced the potentially frustrating grant application process firsthand. During Impact Studio 2023 he noted the lengthy and often demeaning nature of these applications, which can belittle applicants rather than empower them.

Shaady Salehi, executive director of the Trust Based Philanthropy Project, underscores the importance of intentionality in this process. She advocates for a more inclusive approach to grant-making, utilizing technology to make the process more equitable and accessible, such as offering language options and accepting alternative forms of responses like video testimonials.

One significant advantage of technology in trust-based philanthropy is its ability to gather data on user experience, identifying areas that contribute to inequities or burdens on grantees. Analyzing patterns in application completion can lead to insights that help streamline the process and support a more user-friendly experience.

Read the full article about trust-based philanthropy by Sam Caplan at Causeartist.