Trust-based Philanthropy: grantmaking with a lens of trust

June 25, 2019

 

Over the past decade, San Francisco based foundation, The Whitman Institute (TWI) has been­–in their words–mildly obsessed with the concept of “trust-based philanthropy”. Their approach recognises that often the traditional approach of a grantmaker to a potential grantee is one of suspicion–asking the not-for-profit to prove it is worthy of funds. TWI’s model attempts, to the extent possible, to mitigate power imbalances between funders and not-for-profits.

 

About Whitman Institute

Founded in 1985, TWI’s focus and approach has evolved extensively. Today, their multi-issue funding portfolio includes civic and community engagement, leadership development, human rights, movement building and media and journalism. It seeks to leverage the power of trust-centered investing to promote more equitable practices in resourcing social good.

For over a decade, they’ve made a point of making sure trust is embodied in their overall practice. At the heart of their trust-based framework is multi-year unrestricted funding, streamlined paperwork, and relationships and dialogue over hefty applications and reporting. They’ve gone beyond the cheque, which has including sitting on advisory boards, providing non-judgemental support during challenging transitions, and hosting retreats for grantees to unwind and unplug.

“What we hear from our grantee partners is that this approach helps them build and sustain healthier, more adaptive, and more effective organisations that result in stronger work and greater impact over time,” says TWI Co-Executive Director John Esterle.

Not-for-profits are applauding their model. Vu Le, Philanthropy Summit 2019 keynote speaker, and past recipient of a TWI grant summarises this model in his blog NonprofitAF. “It saves us tonnes of time. It makes us more honest. It strengthens partnerships and improves morale. It makes us more effective.”

In 2011, TWI announced their plans to spend down their assets by 2022.  Their six practices of trust-based grantmaking were developed after asking grantees for feedback on where they should focus their energies in the remaining decade. Overwhelmingly, partners wanted TWI to persuade other funders and donors at any scale towards trust-based practices. TWI are now focusing a portion of their remaining funds and energy to advocating, developing resources and spreading this message.

 

The six principles

Over the years, TWI has distilled their practice into six key principles which embody partnering in a spirit of service with grantee partners. The idea is that entering into collaborations from a place of humility and listening enhances mutual learning and enables funders to respond more directly to the needs of partners.

Universally, these principles recognise that those on the ground have much more knowledge of their work, fields, and challenges than funders do:

  1. Providing unrestricted, multi-year funding

Relying on grantees to determine the best use of their resources demonstrates trust. Unrestricted funding is critical in supporting an organisation’s sustainability and effectiveness.

  1. Funders do the homework

The footwork and due diligence should be done by the funder before inviting leaders to invest their time and attention­–this frees up non-profits to concentrate on their mission.

  1. Transparent and responsive communication

Open, honest and transparent communications minimise power imbalances and help move the work forward.

  1. Solicit and act on feedback

Partner with leaders and organisations whose work models relationships, dialogue, and equity in ways that inspire and inform your own. Regularly solicit, reflect on, and take action on grantees’ feedback

  1. Simplify and streamline paperwork

Minimise the digital and paper footprint with grantees. Proposals and reports crafted for other funders are usually satisfactory. Look for ways to consolidate due diligence efforts.

  1. Support beyond the cheque

Offer support beyond money: open doors, highlight grantees’ leadership and work, be a sounding board and provide spaces for reflection.

 

The benefits of trust-based philanthropy

The overarching benefit of this trust-based approach is improved relationships between funders and grantees, which results in more honest conversations and more opportunities for thought partnership and shared problem-solving.  TWI also identify distinct benefits for both funders and grantees:

 

For Funders

  • New insights about the challenges facing not-for-profits (choose non-profit or not for profit and stick with it? We’re using both in this article)
  • Less grantee paperwork allows for more time to evaluate the big picture and provide support “beyond the cheque”
  • A deeper sense of connection to the philanthropic mission
  • An ability to exercise power more effectively, in a way that better resonates with grantees

 

For Grantees

  • More time to work on advancing mission-driven outcomes
  • Less stress for not-for-profit executive directors and senior management, resulting in greater overall effectiveness
  • More opportunities for brainstorming and outcomes-mapping with funder partners

 

The trend towards trust-based practice

TWI’s website is full of funder spotlights on grantmakers who have adopted this trust-based philosophy, and what this looks like in their organisation. From new funders, such as Headwaters Foundation in Montana, whose commitment to trust-based philanthropy has led to a number of innovations – including GO! Grants that are designed to be approved in under 24 hours. To older, established foundations, like the General Service Foundation, who have reassessed their grantmaking process and removed many steps that no longer had a purpose.

Adding in trust is a journey for many grantmakers who are adopting some, but not all, of those six steps. “We recognize there are often internal constraints that affect a funder’s capacity to fully practice trust-based philanthropy, but even in those cases organisations are learning that they can tailor aspects of this model to strengthen their work” says John Esterle. “Steps can include simply soliciting feedback and being transparent in processes. Some foundations are unable to make the leap to multi-year funding, but can change their project grants into unrestricted grants and assess how that works. Streamlining paperwork is another area we’ve seen some foundations take steps to practice in a trust-based way – and in doing so realising that it eliminates their own burdens, and they then have more time to work on relationships with their grantees.”

In response to the growing demand, The Whitman Institute has teamed up with trust-based leaders at the Robert Sterling Clark Foundation in New York and the Headwaters Foundation in Montana to establish a decentralised network dedicated to spreading the message and lessons of trust-based philanthropy. The Trust-Based Philanthropy Network, currently in its early stages, is designed to incorporate trust-based principles and resources into existing funder convenings, cohorts, and affinity groups. There will also be a hub website that houses a number of resources, expected to launch later this year.

 

Learn more

Over the coming years TWI will be developing more resources and a trust-based philanthropy network to support grantmakers. Visit www.thewhitmaninstitute.org for case studies, resources and to learn more about applying trust-based philanthropy in the context of your organisation.

Article originally published in Philanthropy News, April 2019