How to Educate Nonprofit Grantmakers on the Value of Trust-Based Philanthropy
In the dynamic landscape of philanthropy, where nonprofits strive to make a meaningful impact, the role of grantmakers and intermediary funders is pivotal. As organizations dedicated to positive change, grantees rely on their grantmakers’ partnership to provide financial support and cultivate lasting relationships.
That’s where the concept of trust-based philanthropy comes into play.
Traditionally, grantmaking practices have functioned in top-down, transactional models focusing primarily on due diligence and measurable outcomes. However, a growing movement within the philanthropic sector is advocating for a paradigm shift.
Trust-based philanthropy aims to transform typical power dynamics between funders and grantees, emphasizing strong grantee relationships, community expertise, collaboration, openness, and a deeper understanding of nonprofits’ challenges.
Below, we explore the various facets of trust-based philanthropy and discuss three key value propositions of this approach to leverage when advocating for these principles in the trust-based grantmaking process. We’ll also discuss how fostering trust can lead to more impactful partnerships, improved relationship-building, stronger communities, and a deeper sense of purpose for grantmakers and nonprofits.
The Whitman Institute’s Trust-Based Philanthropy Project coined “trust-based philanthropy” in 2014 to emphasize how establishing and maintaining trust between funders and the nonprofit organizations they support can result in true impact through collaboration, not control.
This approach is a response to traditional philanthropic practices, marked by rigid reporting requirements, restrictive funding structures, and short-term grant cycles, which can foster power imbalances and hinder the effectiveness of nonprofit organizations.
It only continues gaining traction as philanthropists seek more effective ways to address complex social issues and maximize the impact of their giving with the assistance of committed stakeholders.
Trust-based funding includes principles like:
- Access to multiyear unrestricted and flexible grants
- Reduction of repetitive or unnecessary paperwork
- Access to nonmonetary support and resources
- Interest in qualitative and quantitative outcomes
- Exposure to participatory grantmaking processes
At its core, trust-based philanthropy recognizes that nonprofits know their communities’ needs best. Providing them with the autonomy and unrestricted funding needed to plan, grow, and innovate in response to real-time crises and inequities they see in the field supports their beneficiaries and the larger sector.
How Trust-Based Philanthropy Can Revive Nonprofits’ Impact
Trust-based philanthropy champions direct and accountable relationships between philanthropists and community partners. Central to this approach is the emphasis on creating solutions, ensuring the active involvement of funders and nonprofit organizations.
Meet the Honnold Foundation
The Honnold Foundation is a registered 501(c)(3) nonprofit organization and intermediary funder implementing trust-based philanthropy in partnership with marginalized communities worldwide. This organization works to expand equitable solar energy access, resourcing frontline leaders and organizations to ensure their crucial participation in the global transition to renewable energy.
Over the last three years, the Honnold Foundation has collaborated with more than 60 grantee partners in 27 countries, territories, and U.S. tribal lands, using a trust-based philanthropy approach to grant funding, capacity-building, and storytelling.
Founded in 2012 by professional rock climber Alex Honnold, widely recognized for the documentary Free Solo, the organization safeguards and promotes the sustainability of communities most impacted by climate change in the United States and around the world. The Honnold Foundation was launched when Alex committed a third of his income toward solar energy projects, activating a network of donors and funders.
The Impact of Trust-Based Philanthropy on Grantmaking
The impact of the Honnold Foundation’s work is a testament to the impact of trust-based philanthropy, which includes:
- Building solar infrastructure in 245 communities, impacting more than 180,000 people
- Enabling solar-powered conservation of over 580,000 acres of rainforest
- Improving health care and education access and quality for over 75,000 people
- Developing multiple award-winning community-centered short films
- Supporting grantee-led advocacy and movement building to advance renewable energy access in the U.S., Latin America, and Island Nations
In climbing, you build a relationship, and then you trust a partner with your life. Why should philanthropy be any different?
The Honnold Foundation offers unrestricted, project-specific funding, multiyear grant opportunities for returning grantee partners, a streamlined application process, minimal reporting structures, optional site visits, and wraparound capacity-building support.
By removing the red tape, being open to quantitative and qualitative reports, and valuing their partners’ time as much as their own, the Honnold Foundation can maximize the shared impact.
The Honnold Foundation seeks additional funding to continue expanding its impact. In the past four years, the organization has received nearly 3,000 applications for solar energy projects worldwide and developed a pipeline of more than $50 million in fundable projects.
Trust-Based Philanthropy Value Propositions to Consider
Now that you see the potential value of trust-based philanthropy, here are three ways to communicate the impact of this approach when raising the topic with new and existing grantmakers.
1. Trust-Based Partnerships Fuel Major Impact Potential
Trust-based philanthropy is a compelling driver for meaningful change by fostering deep, reciprocal relationships between nonprofits and grantmakers.
In this approach, trust becomes the cornerstone, enabling a dynamic exchange of ideas and fostering mutual learning. Unlike the traditional model, where grantmakers maintain tight control, trust-based philanthropy values transparency, collaboration, and open communication.
This shift allows nonprofits to navigate challenges more effectively, leveraging the collective wisdom of both parties. By embracing a relationship based on trust, grantmakers empower nonprofits to take more innovative and impactful approaches to their missions, leading to a more sustainable and meaningful transformation in their communities.
2. Mutual Research Leads to Stronger Grantmaker-Grantee Alignment
A trust-based approach encourages grantmakers to take the initiative in understanding prospective grantees. This proactive stance not only streamlines the vetting process but also saves valuable time for nonprofits.
Nonprofits should also diligently research grantmakers who reach out to them, ensuring compatibility. This dual approach, where nonprofits actively engage in market research and assess the fit with potential grantmakers, enhances the effectiveness of trust-based philanthropy in fostering mutually beneficial relationships and leads to a more streamlined decision-making process.
3. The Expectation for and Implementation of Trust-Based Philanthropy Is Growing
The Center for Effective Philanthropy recently released insights from its early 2023 survey, examining the interactions between nonprofit organizations, foundations, and individual donors.
Of the 284 organizations that responded, there was a consistent positive shift in the relationships between funders and nonprofits. In fact, over half of nonprofit leaders reported increased trust from their funders in the past year.
Respondents also highlighted more streamlined application processes and reduced reporting requirements. Regarding financial support, 40% of organizations noted an increase in offers for multiyear support, and nearly 50% observed a decrease or complete removal of restrictions on the grants they received.
While this survey doesn’t offer a comprehensive view of the sector, it provides insight into the widespread appreciation for and understanding of the impact trust-based philanthropy can have.
Bring Trust-Based Philanthropy into the Fold at Your Nonprofit
Educating nonprofit grantmakers on the principles and benefits of trust-based philanthropy is crucial to fostering a more effective and sustainable approach to giving. It involves doing away with conventional models, embracing transparency, and recognizing that the most significant impact often stems from a relationship grounded in mutual respect, as exemplified by the Honnold Foundation.
How the Honnold Foundation Models Trust-Based Practices
For the Honnold Foundation, trust-based philanthropy means supporting and uplifting grantee partners, empowering them as experts in their community. Shifting their focus from an extractive lens (“You owe us this because we funded your organization”), and instead starting first with “How can we help?” they prepare grantee organizations and their communities to thrive in the face of climate destabilization and systemic marginalization.
Unlike many funders, the Honnold Foundation’s capital isn’t derived from an endowment. Instead, the organization’s funding comes from a growing community of individual donors, corporate partners, and institutional grantmakers.
Funds raised each year become programmatic spending the following year to resource the organization’s $50 million pipeline of project proposals.
The Honnold Foundation welcomes the opportunity to partner with mission-aligned funders exploring a trust-based philanthropic approach to combat the climate crisis. Donors, funders, and organizations interested in partnering with and learning from the Honnold Foundation’s approach can reach out directly to Peter Walle, Development and Communications Manager.
How will trust-based philanthropy help fuel your nonprofit’s short and long-term goals? We’re excited to find out.
Copy Editor: Ayanna Julien
How to Write an Effective Nonprofit Grant Proposal
Subscribe to the Classy Blog
Get the latest fundraising tips, trends, and ideas in your inbox.
Thank you for subscribing
You signed up for emails from Classy