Who’s afraid of trust-based philanthropy? 

The idea of trust-based philanthropy has become a prominent one in the social impact sector in recent years.

The reason? The equalization in power dynamics.  

Trust-based philanthropy is a unique concept in that it allows grantees to decide how money can best be used for issues that impact them firsthand rather than having the money earmarked by funders for specific purposes.

In order to do this, however, trust needs to be built into funders’ granting systems, a change that isn’t so easy to make, said Phylicia Davis-Wesselling, community relations officer at the Toronto Foundation.

While many funders are working to understand what it means to build trust in their systems, some social impact leaders question whether foundations are truly changing power dynamics.

Trust-based funding started to become a more critical consideration for foundations and their funding strategies after the first wave of COVID-19 and the murder of George Floyd by police officers in Atlanta, GA, sparking the #BlackLivesMatter movement, said Davis-Wesselling.

Since then, funders are still trying to understand what it means to step down from holding all the power and control in granting funds, she added, and many are trying to figure out how to be more responsive locally to emerging global crises.

In her experience, most funders support the movement, but some critics have pointed out a level of “trust washing” present, where funders are doing trust-based philanthropy only on the surface. 

A blog post by the Trust-Based Philanthropy Project said that, while good-intentioned, some funders claim they are trust-based and trust grantees while simultaneously expecting them to meet their lengthy, bureaucratic processes.

Alyssa Obrand, managing director at the Foundation for Environmental Stewardship (FES) agrees, adding the movement for trust-based philanthropy has been more talk than action. 

Many foundations claim they act with trust when funding projects and groups but lack the system changes to act without an inherent power imbalance, she said.

“It can take a while to modify internal processes and … the ways of doing things that have been done historically,” said Obrand. 

According to Obrand, it is difficult to make these changes when philanthropy as an institution has an innate power hierarchy built into it. 

As a newer organization run by youth and for youth, she said FES is agile and quick to modify its way of doing things and outlined some of FES’ philosophies that have proven helpful. 

How to help your organization embrace trust

The first thing is to shift the idea of what is considered ‘risky’, which is a significant strategy at FES, said Obrand. 

For instance, if an organization submits a grant application to a funder and the idea and the budget are too ambitious, that could be seen as a risky funding opportunity, said Obrand. 

Obrand said that instead of rejecting these applications, FES prefers to meet with the applicants and have a conversation. 

If the applicant doesn’t know how to create an effective budget, FES may teach them how, said Obrand. 

In this way, trust shows up as patience, she said.

“We try to be as flexible and open minded as possible, and try not to see things as necessarily, as ‘risky,’” said Obrand. 

“It’s actually just a really ambitious project, and we kind of want to see what it could turn into. So we provide that support to be able to get as close to that ambition as we can.”

Another example is broadening the idea of success to grant people leeway to experiment and learn, she said. 

“Things don’t have to be ‘a risk’ just because they might not achieve this huge goal in the end. There could have been a learning process, or something learned along the way could lead to a spin-off project that we’re able to then teach to our other grantees, that leads to different types of success,” said Obrand. 

There is also value in providing more than funding, like focusing on wraparound support for funders to help them function better through the partnership, she said.

That can look like having a rolling deadline, mutual respect and accountability factors for both parties and an understanding that both can teach the other, said Obrand.

Léa Tienou-Gustafson, senior director at the World Education Services (WES) Mariam Assefa Fund, said “philanthropy can have an appetite for risk in a way that I think a lot of government funding cannot.” 

As a funder that focuses on newcomer community needs, WES provides funding alongside government money. 

“While we’re not supplanting government funding, we can provide funding to more less testedmodels,” said Tienou-Gustafson.

“If there is a newcomer community that wants to do something that may not be picked up by government immediately, there’s ways in which we as a funder can step in and provide funding to test the model, to get people started. 

“Then, ideally, it becomes a project that could be picked up by other funders.”

For instance, supporting advocacy within newcomer community initiatives is something that public funding can limit, said Jawad Shahabi, program manager at WES.

It’s important to recognize how advocacy can respond to systemic barriers for immigrants and allow grant money to go towards that, he said.

In a recent partnership with the Foundation of Greater Montreal, the WES Mariam Assefa Fund supported a participatory grantmaking project that supported advocacy for systems change and access to legal and health services for immigrants and asylum seekers. 

“A lot of these initiatives are designed by the community members, people with lived experiences as asylum seekers, refugee claimants or someone who was scammed for legal aid,” said Shahabi. 

Having these community members lead the process of identifying what they focus on and also having them decide who should get the funds is a key element of what trust-based philanthropy looks like for them, he added.

Over at the Toronto Foundation, Davis-Wesseling credited strong community ties with helping with their strategy, giving them an advantage when responding to global or local issues.

“The Toronto Foundation has always granted unrestricted funding, and this comes from a place of being transparent about who they fund,” said Davis-Wesseling.

“We’re a very diverse city. Lots of organizations are here. So it may be a little bit easier for us to take a trust-based approach because of just the opportunities that are provided and just the access that we have as a funder to just so many different organizations and issues,” she added.

Michelle Baldwin, senior advisor at Community Foundations of Canada, said some of the strategies she’s seen include capital transfers to marginalized groups, participatory grantmaking, and impact investing

These are good steps, but Baldwin said funders could do more to consider making more significant changes in philanthropic processes. 

“I do believe that philanthropy has work to do to address power and inequity,” she said. 

While funders work towards trust-based philanthropy to change some of their practices, Baldwin said they might not be thinking far enough ahead in the future or making changes at a systems level. 

“I don’t sense that there is the same intent (to trust-wash) the way we think about greenwashing for business,” she said.

In the end, for Obrand, trust-based philanthropy is centred on building relationships with grantees. It’s about trusting them to do the work while also knowing that funders have a responsibility and accountability in that dynamic and have a role to play that goes beyond granting money.  

“It does take time to kind of remodel and rethink how you’ve been doing things,” said Obrand. 

The best thing funders can do, she said, is talk to the groups being funded – and listen.

Tell us this made you smarter | Contact us | Report error