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By Anna Hirsch-Holland, Programme Director for Funder Impact

Trust-based philanthropy has been critiqued for emphasizing unrestricted funding to the detriment of ‘criteria- and data-driven’ (thereby ‘unbiased’) funding[1]. Its defenders argue that it is about much more than unrestricted funding, highlighting also the streamlined paperwork, mutual learning, and transparency between funders and non-profits. They also emphasize the need to actively cultivate trust and accountability with grantees, using a wider lens than that defined by ‘financial data, quantifiable impact, and academic achievement’ – more typical of traditional funding practices[2].

Ultimately, trust-based philanthropy is an approach that pushes funders to ‘authentically partner with grantees’ to build equity in philanthropy[3]. However, the term ‘partner’ is bandied about a lot in this sector, and most philanthropists – traditional, trust-based, or otherwise – will refer to their grantees as ‘partners’. What does it mean in practice to partner with grantees? Do the six practices of trust-based philanthropy necessarily entail meaningful trusted partnership?

Here, I set out four ways in which becoming a trusted partner to grantees departs from ‘traditional’ philanthropy and builds on some of the central tenets of trust-based philanthropy. While it might not always be the right approach to take, trusted partnership has the potential to create fertile conditions for transformational change.

1. Co-creating something new with combined resources, rather than funding what already exists

In traditional philanthropy the funder sets the parameters of what to fund, and grantees will explain how their work fits these parameters. In trust-based philanthropy, grantees have the freedom to decide their programmes through provision of multi-year, unrestricted funding. In both cases, the approach essentially involves one party (the funder) ‘purchasing’ the services of the other (the grantee) and tends to encourage grantees to keep doing what they’re already doing – maybe getting better at it or scaling it, but essentially supporting the status quo.

By contrast, in a trusted partnership, funder(s) and grantee(s) may also come together to co-create initiatives based on joint knowledge and experience, bringing together their complementary resources – including those, such as social capital, which may not be ‘for sale’. This kind of co-creative process and combining of resources – especially when leveraging the diverse expertise and resources of multiple parties – can drive more transformational change by addressing a complexity of issues that no single actor can resolve alone.

2. Aligning around shared goals and outcomes, rather than fixing or distancing from them

Traditional philanthropy revolves around project-based funding, the linchpin of which is a set of time-bound activities, deliverables, and KPIs linked to a fixed grant amount – agreed at the outset of a grant and codified in a legal contract. This is perhaps where trust-based philanthropy departs most significantly from its traditional counterpart, where multi-year unrestricted funding allows grantees to adapt activities according to emerging needs; it is the most attractive form of support for non-profits, and I’ve heard anecdotes of grantees favouring smaller unrestricted funding over significantly larger project-based grants.

The shift to unrestricted funding is undoubtedly important, but it implies a level of distance from expected outcomes that is at odds with a trusted partnership approach. In a partnership, parties align their interests around a shared vision and agree on (at least some) shared intended outcomes – while retaining flexibility on how and even when those are reached. This flexibility also extends the relationship beyond the boundaries of a formal legal contract, allowing engagement and mutual exchange of resources between partners to adapt and evolve over time.

3. Mutual innovation and improvement, beyond funder-led capacity building

Typically, traditional grant-makers expect their grantees to have pre-existing capacity to deliver ‘proven’ solutions; indeed, funding will be contingent on this. In trust-based philanthropy, by contrast, ‘non-monetary support bolsters leadership, capacity, and organizational health’ of grantees. This support can be an important element of a trusted partnership between funder and grantee, but what is less clear is how the trust-based philanthropy approach allows funders and grantees alike to encourage each other to innovate, improve, and transform.

In a trusted partnership, funders can and should influence the practice of their grantees – and vice versa – as this cross-fertilization is what drives improvement and innovation. For example, rigorous data-driven assessments of results supported by the funder can help grantees to identify what solutions are more effective – and it shouldn’t be assumed that this isn’t something that grantees will value. Indeed, I’ve heard many grantees talk about how much they appreciated the expertise and financial support given by their funders to set up more robust M&E systems. At the same time, grantees may have established their own contextualized approaches to M&E, and funders could learn a lot from these to support their own impact measurement processes.

4. Recognizing diverse sources of power as a key step in mitigating power imbalances

The transactional relationship between funder and grantee that characterizes traditional philanthropy implicitly accepts (or even exacerbates) the inherent power imbalance of the relationship. By contrast, trust-based philanthropy explicitly aims to address power imbalances, making important demands of funders in terms of listening and responding to local needs and expertise. However, it is ultimately still the funder’s prerogative to decide what/who to fund, and the power imbalance thereby remains – especially when it is highly prized unrestricted funding at stake.

Another step in mitigating power imbalance is to recognise and analyse the diverse sources of power that exist – i.e. beyond the money.  This is an essential part of building a trusted partnership: undertaking a power analysis that enables all parties to identify their sources of power. Yes, philanthropists have the monetary power, but without the non-monetary power of their grantees (e.g. expertise and experience, social networks and influence, local contextual knowledge) they would not be able to fulfil their philanthropic mission. This recognition is a thread running throughout the trust-based philanthropy approach, but in a trusted partnership it comes to the fore.

Conclusion: trusted partnerships as one approach in the philanthropy toolbox

The recent debates around trust-based philanthropy have implied that there are ‘right’ and ‘wrong’ ways to practice philanthropy, but the answer surely depends on what kind of philanthropic institution you are, what kind of grantees you work with, and ultimately what you are trying to achieve. Becoming a trusted partner to your grantees is just one approach – it won’t always be the right way to go, and it’s certainly not easy; but it does have the potential to create not only more equitable but also more effective and transformational philanthropy.

Anna Hirsch-Holland is TPI’s Programme Director for Funder Impact 

The views expressed here are those of the author and do not represent the Partnering Initiative. 

This blog was originally published by Alliance Magazine


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TPI Global

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