Trusts and Foundations play an important part in philanthropic giving, contributing billions each year to charitable causes. However, they are often perceived to take a traditional approach, involving involve strict guidelines, rigid structures, and top-down decision-making. However, a transformative shift is underway – one that places trust at the core of giving, and values that collaboration, transparency, and empathy. Our guest blog this month comes from Janis Petzinger PHD, Research Fellow at Centre for the Study of Philanthropy and Public Good, who explores how trust-based philanthropy can foster genuine relationships, amplify impact, and pave the way for a more equitable relationship between funders and the causes they support.
Trust-based Philanthropy: What it is and why it matters
How can grantmakers cultivate more effective giving? Instead of searching for a silver-bullet answer, foundations are increasingly taking this question to their grant recipients. Doing so reflects a wider movement known as ‘trust-based philanthropy’ (TBP), whereby foundations seek the knowledge, voice, and lived experience of their grantees to foster successful grant programs. In a surprisingly simple and intuitive way, trust-based philanthropy turns traditional, paternalistic grantmaking logic on its head. Instead of choosing the ‘right’ grant recipients, or ‘fixing’ their organisational work, foundations trust their grantees to create meaningful impact in their own unique ways. This means that ‘trust’ has entered grantmaking as both a process and an outcome: it serves as a method of creating familiar, honest, and cooperative relationships with grantees, while also fostering impactful results that are grounded in the unique needs of each grantee.
But what does the equitable spirit of TBP look like in practice? It often manifests as multi-year, unrestricted funding that allows charities to support core costs that are famously difficult to financially support. Doing so challenges the ‘nonprofit starvation cycle’—a phenomenon that keeps charities ‘staved’ of funding because they are constantly operating on short-term, project-based grants. TBP also encourages funders to manage the accountability of a grant through streamlined, simpler, and sometimes conversational reporting to avoid wasting grantees’ time on onerous oversight requirements. This is made possible with increased engagement and collaboration between grantors and grantees, during which metrics of success are co-created together. Grantmakers can take trust-based practices even further through ‘participatory grantmaking’, whereby grantors empower grassroots charities to choose where money in a community of practice should go and how it should be spent.
Trusting grantees generates impactful work
As TBP challenges the power imbalance endemic to grantor-grantee relationships, evidence shows it yields meaningful impact for grant recipients. A study by Powell et al (2023) explored how the Centre Disease Control and Prevention Foundation (CDCF) enacted trust-based philanthropy methods, finding that grantees had more agency in tackling health inequities during the COVID-19 pandemic and improving community resilience. Similarly, a study on eight different participatory funds from The Lafayette Group found trusting grantees sets priorities well aligned with what the field needs, creates better investment decisions, and mobilizes additional funding for the field. Though TBP means less funder oversight, findings show that grants are still efficiently run, and can enable funders to identify grantmaking priorities and grantmaking opportunities that non-trust-based models would miss. Indeed, data from my own PhD research corroborates these benefits, while also finding that grantees felt a greater motivation to deliver on trust-based programs after feeling respected and seen by a trust-based grantmaker.
Though the rise in TBP suggests a step in the right direction for grantmaking, questions remain if TBP is just co-opted equitable language used to window dress a foundation or trust’s grant programs. A study from the Centre for Effective Philanthropy found that many foundations are not actually integrating unrestricted funding, despite being lauded as common practice. On top of this, when foundations do bring in TBP, it comes with challenges: for one, TBP requires closer relationships, which can take more time and effort from foundations embedding in communities. It also means letting the value emerge from the grant programs, recognising that power imbalances can still occur in unspoken ways, and getting comfortable with uncertainty as foundations face the complex and bespoke needs of different grantees. Like any approach to grantmaking, TBP has its own trade-offs to consider.
Even so, TBP serves as a hopeful departure from the perennial issues of top-down and paternalistic philanthropy with some exciting instrumental changes already evident in the field. Let’s hope grantmaking trusts continue down the path: after all, trust is in their organisational name.
Author – Janis Petzinger
You can find Janis on Twitter @JanisPetzinger, and on LinkedIn
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