Giving Compass' Take:
- Here are the six practices of trust-based philanthropy and how they will help transform funder relationships.
- How can a trust-based approach bring about social justice?
- Learn why trust-based funding is the future of philanthropy.
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Philanthropy has long been a cornerstone of societal progress, with individuals and organizations providing the financial resources needed to address pressing issues and support the common good. However, traditional grantmaking approaches — shaped in part by the same exclusionary practices nonprofits seek to address — have too often fallen short in their effectiveness and impact, leading grantmakers to examine their roles in contributing to systemic inequality. In recent years, the emergence of trust-based philanthropy has kindled hopes of a transformative path for philanthropy to more effectively create lasting change. The following explores the origins, principles, and potential of trust-based philanthropy as a catalyst for a better future.
Trust-based philanthropy first took root in the early 2000s when many philanthropic leaders began questioning whether traditional grantmaking practices produce skewed results due to power imbalances and burdensome requirements. Recognizing that a shift was necessary to empower grantee organizations and ensure a more equitable distribution of resources, they sought a fair and inclusive approach that prioritized grantees’ needs and expertise. Over the past decade, the concept of trust-based philanthropy has gained significant traction, gaining the attention and endorsement of major foundations, influential philanthropists, and grassroots movements.
Trust-based philanthropy is founded on six practices that provide a basis for transforming the grantmaker/grantee relationship. They are:
- Provide Unrestricted Funding: Trust-based philanthropy recognizes that unrestricted funding allows grantees to allocate resources where they are most needed, encouraging innovation and adaptability.
- Support Multi-Year Grants: Multi-year funding provides stability, enabling grantees to plan for the long term rather than being confined to short-term projects and funding cycles.
- Simplify Reporting Requirements: Reducing the burden of reporting frees up valuable time and resources, allowing grantees to focus on their mission-driven work.
- Engage in Active Listening and Learning: Grantmakers commit to actively listening to grantees and learning from their experiences, recognizing that those closest to the issues are often best positioned to develop effective solutions.
- Offer Non-Financial Support: Grantmakers move beyond transactional relationships with grantees by offering non-financial resources, such as technical assistance, capacity-building opportunities, and connections to networks and resources.
- Foster Collaborative Relationships: Trust-based philanthropy encourages collaborative relationships between funders and grantees, recognizing that collective efforts are a more effective means of addressing complex social challenges.
Read the full article about trust-based philanthropy at Fluxx.