By: Kayleigh Weaver
April 12th, 2023

Clear Impact is committed to helping funders and grantees achieve their social impact goals and create sustained, measurable changes using data-driven strategies. But sustainable change is only possible when collaborative partners have high transparency, respect, and trust. That’s where trust-based philanthropy comes in. This growing movement seeks to dismantle the (often oppressive) power dynamic between funders and grantees and empower grantees with the resources they need to deliver appropriate, targeted, and localized strategies that create lasting impact. This blog post will explore the basics of trust-based philanthropy, its importance for creating lasting change, and practical recommendations for getting started.

trust-based philanthropy

In this blog, you’ll explore the basics of trust-based philanthropy, its importance for creating lasting change, and practical recommendations for getting started.

Table of Contents:

  1. What is Trust-Based Philanthropy?
  2. Why is Trust-Based Philanthropy Important?
  3. Tips for Practicing Trust-Based Philanthropy
  4. Building Trust With Data 
  5. Free Download: Social Sector Hero — How Government & Philanthropy Can Fund for Impact
  6. Building Trust With Funding Flexibility 
  7. Putting Trust-Based Philanthropy into Practice 
  8. Building Trust by Moving “Beyond the Check” 
  9. Final Thoughts
    1. Flexible Funding NEEDS This
  10. Helpful Links
  11. Read Next

Trust-based philanthropy seeks to dismantle the traditional power dynamics between funders and grantees — with a focus on flexible funding — in an effort to strengthen partnerships and create a greater impact in communities.

1. What is Trust-Based Philanthropy?

Trust-based philanthropy is an approach that prioritizes building trust and strengthening relationships between funders and grantees. Rather than relying solely on traditional power dynamics, trust-based philanthropy seeks to create more collaborative, equitable, and transparent partnerships. This approach recognizes that nonprofits are often best positioned to understand the needs of their communities and that funders can be most effective when they collaborate with those communities.

Trust-based philanthropy seeks to build strong relationships based on trust, transparency, and collaboration, focusing on providing flexible, unrestricted funding and support beyond monetary resources. By adopting these principles, the movement aims to help nonprofits build their capacity, strengthen their impact, and ultimately create more positive change in their communities.

2. Why is Trust-Based Philanthropy Important?

Trust-based philanthropy is essential for several reasons. First, it recognizes that nonprofits are best positioned to understand the needs of their communities. By building relationships with nonprofits, funders can better understand the issues facing local communities and work together to develop more effective and sustainable solutions.

Second, trust-based philanthropy can help to address power imbalances in the philanthropic sector. Historically, philanthropy has been characterized by a power dynamic in which funders hold all the cards. Trust-based philanthropy seeks to level the playing field by creating more equitable partnerships between funders and grantees.

Third, trust-based philanthropy can help to build stronger, more resilient organizations. When nonprofits have the resources and support they need to pursue their missions effectively, they can better weather challenges and sustain their impact over time.

3. Tips for Practicing Trust-Based Philanthropy

Here are some tips for practicing trust-based philanthropy:

  1. Start by listening. Take the time to listen to the needs and priorities of the nonprofits you work with. Make sure that you are truly hearing and understanding what they are saying.
  2. Be transparent. Be open and honest about your goals, strategies, and decision-making processes. Share information with your grantees in a timely and transparent way.
  3. Build relationships. Focus on building long-term relationships with your grantees. Invest in getting to know them and understanding their work.
  4. Provide flexible funding. Consider providing multi-year, unrestricted funding that allows nonprofits to be more agile and responsive to changing circumstances.
  5. Be humble. Recognize that you don’t have all the answers. Be open to learning from your grantees and be willing to change your approach based on what you learn.

You can learn more about increasing trust with grantees using the power of Effective Dialogue in Social Sector Hero — How Government and Philanthropy Can Fund for Impact.

build trust data

Using data can help funders and grantees increase mutual trust, improve their partnership, and achieve greater community impact. Effective data management helps build transparency, demonstrate impact, improve decision-making, and create more buy-in for strategies.

4. Building Trust With Data

Data-driven strategies are vital to achieving sustainable social impact. The use of data can also increase trust between funders, grantees, partners, donors, and the public. Here are three ways data can help build trust:

  1. Demonstrating Impact: Data can help illustrate the impact of a funder’s investment. By collecting and analyzing program outcomes and impact data, organizations can share concrete evidence of their contributions to a shared strategy. Disciplined data analysis can help build trust by demonstrating that funders and grantees are invested in each other’s success and are accountable for achieving measurable results.
  2. Building Transparency: Data can also help build transparency between funders and grantees. By sharing data on grantmaking processes, funding decisions, and strategy outcomes, funders can demonstrate that they are open and accountable to their grantees. This can help build trust by creating a more transparent and collaborative partnership between funders and grantees.
  3. Improving Decision-Making: Finally, data can help improve decision-making for both funders and grantees. By collecting and analyzing program outcomes and impact data, funders and grantees can make more informed decisions about resource allocation, program design, and strategy. This can help build trust by demonstrating that both parties are invested in achieving the best possible outcomes and are using data to guide their decision-making.

You can learn more about using data to create collective community impact in Social Sector Hero — How Government and Philanthropy Can Fund for Impact.

social sector hero book

Learn more about building trust and practicing flexibility to invest for impact.

Download your FREE copy of Social Sector Hero — How Government and Philanthropy Can Fund for Impact.

Download Free

flexible funding philanthropy

Inflexible funding can be a barrier to a grantee’s success. This is because nonprofits’ needs are constantly evolving, especially in times of emergency or uncertainty. Flexible funding, grantmaking, and support can help nonprofits more easily adapt to changing needs, foster innovation, and build capacity for long-term results.

5. Building Trust With Funding Flexibility

Philanthropic funders are essential in supporting nonprofit organizations and driving social change. However, traditional grantmaking practices can sometimes create unnecessary barriers to success. One such barrier is a lack of flexibility in funding. Here are a few reasons why it’s important for philanthropic funders to have flexibility when working with grantees:

  1. Changing Needs: The needs of nonprofits can change rapidly, particularly in response to unexpected events or emergencies. By providing flexible funding, funders can ensure that grantees have the resources to respond to emerging needs and adapt their programs and services accordingly.
  2. Innovation: Innovation is critical to solving complex social problems. By providing flexible funding, funders can encourage grantees to take risks and pursue innovative solutions to these challenges.
  3. Capacity Building: Nonprofits require investment in their organizational capacity to achieve long-term sustainability and success. Flexible funding can allow grantees to invest in organizational capacity building, such as staff training, infrastructure development, or strategic planning, which can ultimately increase their impact and effectiveness.
  4. Trust: Flexibility in funding can help build trust between funders and grantees. By demonstrating a willingness to adapt to the changing needs of grantees, funders can show that they are invested in the nonprofit’s success and are willing to work collaboratively to achieve shared goals.

You can learn more about consistency and flexibility in grantmaking in Social Sector Hero — How Government and Philanthropy Can Fund for Impact.

6. Putting Trust-Based Philanthropy Into Practice

The following three practices (based on The Trust-Based Philanthropy Project’s six core practices) are concrete steps funders can take to begin transitioning to trust-based philanthropy and grantmaking. 

  1. Provide multi-year, unrestricted funding: Instead of restricting funding to specific projects or activities, provide grantees with flexible funding over several years. This flexibility allows grantees to plan for the long term and make strategic decisions based on their organization’s needs.
  2. Simplify and streamline grant applications and reporting: Trust-based philanthropy recognizes that the grant application and reporting process can be burdensome for nonprofits. Funders can free up grantees’ time and resources to focus on their mission by simplifying and streamlining these processes.
  3. Involve grantees in high-level strategy: Trust-based philanthropy recognizes that grantees have invaluable insights into the communities they serve. By collaborating with grantees on strategy, funders can tap into this expertise, build stronger partnerships, understand their communities better, and become more engaged with residents.

You can learn more about how to simplify grantmaking to ease the burden on grantees in Social Sector Hero — How Government and Philanthropy Can Fund for Impact. 

support philanthropy

There are many more ways to support grantee success than simply sending a check. Examples of non-monetary supports include office space, software, professional development, technical assistance, and networking connections.

7. Building Trust By Moving Beyond the Check

One way to ramp up grantee support is to offer non-monetary resources that “move beyond the check.” According to the Trust-Based Philanthropy Project, “Responsive, adaptive, non-monetary support bolsters leadership, capacity, and organizational health. This is especially critical for organizations that have historically gone without the same access to networks or level of support than their more established peers.”

Funders can offer support to grantees that goes beyond traditional grantmaking in several ways, including:

  1. Providing non-monetary resources: Funders can offer in-kind support, such as access to office space, technology, training, or professional development opportunities. These resources can help grantees save money and build their capacity.
  2. Offering technical assistance: Funders can provide grantees with technical assistance, such as help with grant writing, marketing, or board development. This assistance can help grantees build their skills, capacity, and organizational effectiveness.
  3. Facilitating connections: Funders can introduce grantees to other organizations, individuals, or networks that can help them achieve their goals. These introductions can help grantees build relationships, access new resources, and broaden their impact.
  4. Providing advocacy support: Funders can advocate for grantees and the issues they work on. Advocacy can include speaking out publicly to support grantees’ work, connecting grantees with policymakers, or supporting advocacy campaigns.
  5. Supporting evaluation and learning: Funders can support grantees in evaluating their work and learning from their successes and challenges. This support can help grantees improve their effectiveness and achieve measurable long-term outcomes.

8. Final Thoughts

Trust-based philanthropy is an approach that prioritizes building relationships and creating more equitable partnerships between funders and grantees. By practicing trust-based philanthropy, funders can gain a deeper understanding of the needs and priorities of the communities they serve, build stronger and more resilient organizations, and help to address power imbalances in the philanthropic sector.

Improving trust between funders and grantees requires intentional effort and a commitment to building solid relationships. By practicing active listening, transparency, disciplined data evaluation, and providing flexible funding (that moves beyond the check), funders can help create more equitable and collaborative partnerships with grantees.

Providing flexible funding to grantees is essential for philanthropic funders who seek to drive real change and build sustainable relationships with their grantees. Flexible, unrestricted funding allows grantees to adapt to changing needs, encourages innovation, promotes organizational capacity-building, fosters trust, and maximizes the potential impact of funding.

Clear Impact Software Suite

Flexible Funding NEEDS This

Of course, flexible/unrestricted funding must be accompanied by disciplined data collection, analysis, reporting, and continuous improvement processes (by both funders and their partners) to effectively support measurable impact. Grantees should have flexibility in how they spend funds, but their programming should still align with the funder or network’s mission. Well-designed, consistent grantee performance evaluations can help ensure funders meet grantees’ needs while maintaining alignment and performance accountability.  Funders should ensure that funding decisions, grant eligibility, grantmaking policies and procedures, and grantee performance evaluations are based on a “Common Purpose” shared by all partners. This can help mitigate any potential downsides to flexible/unrestricted funding. You can learn more about all of these concepts in our free book, Social Sector Hero. You may also want to check out Clear Impact Suite as a potential solution for your network’s data collection, management, and grantee performance evaluation needs.

9. Helpful Links

social sector hero book

Read Next…

Social Sector Hero — How Government and Philanthropy Can Fund for Impact

Download Free