Trust-Based Philanthropy: A 2023 Perspective

A couple years ago, I wrote a blog for Philanthropy Roundtable explaining how trust-based philanthropy has become a “‘must-have’ topic for conference sessions, webinars, podcasts and articles in popular philanthropy journals.” While there is value in many of the grantmaking practices recommended by advocates of trust-based philanthropy, its proponents claim these practices are insufficient, especially “‘if funders aren’t simultaneously applying a racial equity lens to their work.’”   

Now, in the wake of the recent U.S. Supreme Court ruling prohibiting race-based preferences in college admissions, the Race and Equity in Philanthropy Group has again called for trust-based philanthropy and participatory grantmaking in an open letter to other foundations, warning that without power-sharing practices, “philanthropy will continue to perpetuate systems of injustice.”  

Asked by The Chronicle of Philanthropy to comment on this initiative, I repeated our earlier advice that foundations should certainly develop respectful relationships with grantees and should also utilize helpful practices like streamlining applications to collect only that information they need to make mindful decisions. I was clear, however, that foundation boards have legal and fiduciary responsibilities that cannot—and should not—be fully shared with others.  

Ironically, the new call for increased power-sharing in philanthropy comes at a time when many funders have, in fact, adopted those very practices. The Center for Effective Philanthropy (CEP) recently reported on its early 2023 survey of nonprofit organizations about the state of their relationships with both foundation and individual donors. Of the more than 500 groups invited to participate, 284 organizations responded, and the data indicated “continued positive change in relationships between funders and nonprofits.” Over half of nonprofit leaders “perceived an increase in trust during the past year from their funders” and reported easier application processes as well as reduced reporting requirements. Forty percent experienced increased offers of multi-year financial support and nearly 50% saw reduced or removed restrictions on grants received. 

The proponents of trust-based philanthropy would do well to celebrate this change and build on it in ways that encourage more donors to seek new charitable organizations and new nonprofit leaders regardless of race and communities served. As I remarked to The Chronicle of Philanthropy, “The rhetoric that’s been in play around trust-based philanthropy and now participatory grantmaking is intentionally provocative about redistributing power and racial equity when the reality is these are just sound grantmaking practices that we’ve talked about for a long, long time.”  

Read more on this topic from the Roundtable’s Joanne Florino at: “Trust-Based Philanthropy: What Donors Need to Know.” 

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