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7 minute read
Many grantmakers are exploring approaches that genuinely empower nonprofits, respect their expertise, and shift traditional power dynamics. Throughout the philanthropic sector, the focus is increasingly on partnerships that are equitable, transparent, and rooted in trust. Trust-based philanthropy is a growing movement that has brought philosophy into action and provided the words and pathways to create equitable partnerships between funders and nonprofits. This has been launched by emphasizing how all involved can activate for flexibility, transparency, and trust. Trust-based philanthropy is not just about funding but about reimagining the relationship between funders and grantees to drive meaningful change.
Trust-based philanthropy is a movement that allows nonprofits more freedom to determine their own needs, prioritize funding, and build capacity within their organizations. This model fosters a collaborative, mutually beneficial relationship, where grantmakers provide resources and nonprofits drive meaningful, community-centric change. At Catchafire, we’re committed to facilitating these efforts, and our trust-based philanthropy software is designed to help you establish and maintain strong, impactful partnerships with the nonprofits you support.
What is trust-based philanthropy?
“Trust-based philanthropy is an approach to giving that addresses the inherent power imbalances that exist between funders, nonprofits, and the communities they serve. The core of this approach is about redistributing power in service of the healthier and more equitable nonprofit ecosystem.”
Shaady Salehi, Director
The Trust-Based Philanthropy Project
Trust-based philanthropy is a shift in how grantmakers engage with nonprofits, focusing on the idea that nonprofit leaders know best what their communities need. Rather than imposing rigid requirements and pre-defined goals, trust-based philanthropy allows nonprofits to steer the direction of the funding they receive. It’s a model that challenges the status quo of power dynamics in philanthropy, aiming to foster stronger, more authentic relationships between grantmakers and grantees.
Trust-based philanthropy goes beyond funding flexibility; it also emphasizes transparency, mutual accountability, and respect. This approach involves clear and open communication from both the grantmaker and grantee, creating a foundation for honest dialogue about challenges, successes, and areas where additional support may be needed. Trust-based philanthropy encourages grantmakers to be responsive to the needs of their nonprofit partners, rather than adhering strictly to a one-size-fits-all grant framework. In this way, it fosters a culture of shared learning and adaptability, where funders and nonprofits can collaboratively address pressing community needs.
Moreover, trust-based philanthropy seeks to remove traditional barriers that often prevent smaller or emerging nonprofits from accessing critical resources. By reducing complex reporting requirements and simplifying the application process, it allows nonprofits to allocate more time and energy toward their mission-driven work. Trust-based funders may also offer unrestricted funds, enabling organizations to direct resources where they’re most needed, whether that’s towards programmatic work, administrative support, or capacity building. This model acknowledges that nonprofits understand the unique nuances of their communities and are best equipped to respond swiftly and effectively when given the necessary autonomy and trust.
Shifting power dynamics
Traditionally, philanthropy has a long history of operating as a wide power decision maker, with a board and staff far removed from experiencing the community issues and goals at hand. This created a dynamic of nonprofits needing to justify their worthiness through detailed applications, extensive reporting, and often rigid guidelines on how funds should be spent. Trust-based philanthropy, however, encourages a different approach. By acknowledging the agency of nonprofits, and encouraging open communication about their needs, foundations have an opportunity to provide support that, in the hands of the nonprofit, takes flight with resource allocations, and pivots to achieve the strategic goals without excessive oversight.
By moving away from a top-down model, grantmakers can help amplify the voices of nonprofit leaders, empowering them to make a more significant impact. This shift not only builds trust but also drives sustainability, as nonprofits can focus on long-term goals rather than short-term deliverables.
For more information and resources on trust-based philanthropy, visit the Trust-Based Philanthropy Project, a community initiative launched in 2020 to support the adoption of trust-based philanthropy and collective accountability across the sector.
"We don’t want to assume what nonprofits need, we want to make sure they have the opportunity to go after what they need at any given time…Because if we expect nonprofits to be sustainable and effective, we must offer support beyond grant dollars."
Chris Lemon, Vice President for Community Investment
Ann Arbor Area Community Foundation
The role of capacity building in trust-based philanthropy
Capacity building for nonprofits is essential for long-term success. Trust-based philanthropy allows nonprofits to focus on core operational needs, such as staff development, technology upgrades, and strategic planning. This approach enables organizations to enhance their infrastructure and expand their impact sustainably.
Nonprofit capacity building doesn’t just strengthen individual organizations—it bolsters entire communities. When nonprofits have the resources and autonomy to build their capacity, they can provide more effective services, address urgent issues, and create lasting change. At Catchafire, we believe that funding core expenses and capacity building efforts is a crucial part of trust-based philanthropy.
Capacity building is vital because it empowers nonprofits to build resilience, adapt to changing circumstances, and sustain their efforts over the long term. When nonprofits can access a broad range of resources, they are better equipped to tackle the multifaceted challenges within their communities. Open access to resources means nonprofits can tap into the specific tools and expertise they need, rather than being limited by narrowly defined grant parameters. This flexibility allows them to prioritize and address multiple capacity building needs—whether it's improving data management, enhancing fundraising skills, or developing robust strategic plans—at a pace that aligns with their unique circumstances and organizational goals.
The ability for nonprofits to connect directly with specialized talent on Catchafire is especially valuable for organizations in rural areas or smaller communities. Often, these organizations face challenges in accessing local experts with the specific skills required for projects like IT upgrades, marketing strategies, or financial planning. Trust-based philanthropy supports nonprofits in choosing their own volunteers or consultants, creating partnerships that are both meaningful and relevant. When nonprofits are not restricted to selecting one or two activities predetermined by a grant, they have the freedom to build a comprehensive capacity building plan that fully addresses their needs. This holistic approach not only strengthens the nonprofit itself but also creates ripple effects, as well-supported organizations are able to drive more impactful, sustainable changes within their communities.
Trust-based philanthropy: do’s and don’ts for grantmakers
Embracing trust-based philanthropy requires a conscious commitment to change. Here are some key do’s and don’ts to help you navigate this approach effectively:
Do’s:
Listen and learn
Start by listening to nonprofit leaders. Understand their unique challenges, objectives, and perspectives. By fostering an open dialogue, you can tailor your support to meet their needs and aspirations.
Provide multi-year, unrestricted funding
Unrestricted funding is the lifeblood of trust-based philanthropy. Instead of limiting funds to specific projects, offer multi-year support that allows nonprofits to address both immediate needs and long-term goals. This flexibility is key to effective capacity building and helps organizations respond to unforeseen challenges.
Co-create success metrics
Rather than setting goals independently, work with your grantees to develop success metrics. This collaborative approach fosters a sense of ownership and ensures that both parties are aligned in their vision and expectations.
Support organizational capacity building
Nonprofit capacity building is vital for sustainability. Beyond funding, provide resources such as training, tools, or access to networks like Catchafire that strengthen the organization as a whole. Effective capacity building in nonprofit organizations goes beyond financial support—it’s about empowering nonprofits to thrive.
Focus on relationship-building
Building trust takes time. Invest in regular check-ins, casual conversations, and meaningful connections. Remember, trust-based philanthropy is a partnership, not just a transaction.
Don’ts:
Avoid micromanaging
Grantmakers sometimes feel the need to control how funds are used. In a trust-based model, this approach can erode trust. Instead, empower your grantees to make decisions and demonstrate your confidence in their judgment.
Don’t engage in “trust-washing”
Trust-washing is the act of promoting trust-based principles without implementing them authentically. For example, claiming to provide unrestricted funding but setting stringent guidelines for its use. Genuine trust-based philanthropy requires a willingness to relinquish control and respect the expertise of nonprofit leaders.
Don’t overemphasize reporting requirements
Extensive reporting requirements can drain valuable resources. Trust-based philanthropy encourages streamlined, meaningful reporting, which allows nonprofits to share their progress without excessive administrative burdens.
Avoid tokenism
Trust-based philanthropy is more than a trend. It requires authentic, ongoing engagement. Don’t view it as a box to check or a way to bolster your image. Approach it with a genuine desire to support and empower nonprofits.
5 ways to incorporate trust-based philanthropy into your grantmaking
Trust-based philanthropy can be implemented in various ways. Here are five strategies to help you embrace this approach:
1. Redesign your application process
Traditional applications often focus on numbers and data, but trust-based philanthropy values personal connections and narratives. Consider moving away from rigid applications in favor of initial conversations with prospective grantees. This approach provides nonprofits with a platform to share their vision, challenges, and plans, helping you better understand their needs.
2. Offer unrestricted, multi-year funding
Unrestricted funding is crucial for nonprofit capacity building. It allows organizations to invest in their teams, infrastructure, and other core areas. By offering multi-year grants, you’re not only providing financial support but also stability. This approach enables nonprofits to plan for the long term and focus on building capacity for sustained growth.
3. Foster ongoing collaboration
Go beyond traditional grantmaking by fostering ongoing relationships with your grantees. Schedule regular check-ins, share resources, and create spaces for collaboration. This partnership approach builds trust and enables nonprofits to feel supported, both financially and operationally.
4. Simplify reporting processes
Nonprofits are often stretched thin, and excessive reporting can be a drain on time and resources. Simplify your reporting requirements by accepting oral updates or allowing nonprofits to use reports they’ve already created for other funders. This reduces administrative burdens and enables nonprofits to focus on their mission.
5. Invest in non-financial support
Capacity building for nonprofits isn’t just about money. Offer resources like Catchafire that enhance organizational skills, provide training, or introduce nonprofits and declined grantees to valuable skills-based volunteering networks. When you invest in nonprofit capacity building, you’re helping organizations develop the tools and knowledge they need to succeed.
Trust-based philanthropy examples
Real-world examples of trust-based philanthropy illustrate the impact of this approach. For instance, Catchafire has worked with grantmakers to support over 14,000 nonprofits, providing capacity building resources and going beyond the grant. With access to skills-based volunteers on Catchafire, nonprofits are able to invest in their infrastructure, receiving support on projects like strategic planning, graphic design, and fundraising. This allows them to list their top needs, receive quick support, and expand their community impact.
Read our case studies to learn more.
Book a demo to explore what Catchafire can do for your grantmaking
At Catchafire, we understand the power of trust-based philanthropy and are committed to helping grantmakers implement this approach effectively. Our software simplifies the grantmaking process, reduces administrative burdens, and supports flexible capacity building. It’s designed to empower you to build genuine partnerships with nonprofits and drive impactful change.
If you’re ready to learn more about how our platform can enhance your trust-based philanthropy efforts, book a demo today. Let’s work together to foster a more equitable and impactful philanthropic ecosystem—one that empowers nonprofits and builds stronger communities.
