Trust-Based Philanthropy Takes Root
If you don’t work at a nonprofit or a grantmaking organization, you might be surprised to learn that applying for and receiving even a small grant can involve myriad and often cumbersome tasks.
That’s the case for the application process as well as reporting on uses of the grant funds and outcomes achieved during the grant period. If you seek multiple grants from different sources, each with its own requirements, it’s typical to employ grant specialists who have experience tracking the various compliance factors.
Further, grantmaking practices can be so time-consuming compared with the potential dollars an applicant might receive that nonprofits sometimes decide that applying is just not worth their effort. That happens even when people are leading programs that merit support.
In other instances, technical requirements such as a fairly up-to-date computer and operating system, specialized language, and bureaucratic details such as requirements for custom financial information and formatting are unrealistic for many nonprofits, except for the largest mainstream and legacy institutions.
Nonprofits often find the grantseeking process to be irritating, secretive, and complicated, as noted by GrantAdvisor’s recently launched “100 Forms in 100 Days” initiative, which is asking 100 grantmakers to make technical fixes to address the top pain points for grant applicants in the application process. Let’s hope grantmakers heed the call to—at a minimum—improve the user experience of computer-based grant applications.
While these are positive moves, changes in grantmakers’ technologies don’t begin to target larger aspects of funding practices that merit examination and reform. (GrantAdvisor allows grantseekers to confidentially rate their experiences with grantmakers. Take a look at this Minnesota-founded organization at grantadvisor.org.)
Happily, a growing cohort of philanthropies, including several in Minnesota, are part of an effort to alter grantmaking norms. The Trust-Based Philanthropy Project is a five-year, peer-to-peer initiative that asks grantmakers “to center equity, humility, and transparency; to recognize the power imbalance between funders and grantees, and work to actively rebalance it; and to deeply value the quality of relationships, and honor how they treat others.” The project asks grantmakers to consider how their practices contribute to the problems they are working to address and to seek answers in deep partnership with recipients.
What does Trust-Based Philanthropy look like in practice? Participating grantmakers are asked to consider these six principles built around “redistributing power systemically, organizationally, and individually in service of a healthier and more equitable nonprofit sector.”
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- Provide multiyear unrestricted funding: Eliminate project and restricted grants that require nonprofits to invent and stick to specific activities; allow nonprofits to use funds to meet their highest needs and make shifts as needed; eliminate detailed financial tracking of restricted funding;
- Do your homework: Make the burden of due diligence and vetting an activity that rests on the grantmakers;
- Simplify and streamline paperwork: Reduce the paperwork that’s required on the front and back ends of grantmaking;
- Be transparent and responsive: Build open and candid relationships with grantees;
- Solicit and act on feedback: Inform grantmaking by the experience of people working on the ground;
- Provide support beyond the check: Bring grantmakers’ connections and expertise to the shared work of funders and nonprofits.
The Trust-Based Philanthropy Project launched in January 2020. Early discussions for this initiative started years earlier, which helped shape its planning and the project’s framework. Timing was auspicious, as the project’s principles and practices were immediately influential at the onset of the pandemic and concurrent racial justice movement.
In 2020, because many grantmakers recognized the urgency of adopting similar principles, they made changes to help nonprofits respond to and weather the year’s turmoil.
Common actions among philanthropies since then have included removing restrictions from project grants and allowing nonprofits to convert restricted grants to unrestricted funds, eliminating previously required paperwork, and working to bring resources and ideas “beyond the check” to grantees.
More than 800 foundations across the nation signed a pledge to support a series of responsive actions. The “pledge” looks a lot like the Trust-Based Philanthropy Project’s principles and recommendations. Four Minnesota grantmakers have signed the pledge so far, and many others have adopted these streamlined practices without becoming official “partners in the pledge.”
Nonprofits welcomed these changes in practice. The question now is: Will these ways of working stick? And even better, will they increase?
Nonprofits are the experts in what they do, and in knowing how an investor can help them do good, and do it better. The Trust-Based Philanthropy Project looks like an important move to recognize this expertise and help it flourish. Minnesota grantmakers, will you heed the call?