Trust-based philanthropy is an approach in philanthropy that emphasizes shifting decision-making power to nonprofit leaders, providing them with the flexibility and resources necessary to address complex and evolving community needs. Core practices include providing unrestricted funding, offering multi-year grants, and minimizing administrative burdens, which allows grantees to allocate resources efficiently and pivot strategies when new challenges or opportunities arise.[1]
Relationship with traditional philanthropy
editThe trust-based model counters traditional philanthropy, which often ties funds to specific projects and imposes rigorous reporting requirements.[1] By contrast, trust-based philanthropy relies on building open, trustful relationships between funders and grantees.[2]
These relationships foster a collaborative environment, enabling funders to gain a deeper understanding of grantees' needs. This approach can be seen as more strategic, as it acknowledges the expertise of nonprofit leaders and provides them with the latitude to make timely decisions in response to shifting conditions.[3]
Use by donors
editWhile it existed before the pandemic began, the trend of trust-based giving has been accelerated by the COVID-19 pandemic.[4] Many funders reduced reporting requirements, converted restricted grants to general support, and streamlined application processes, allowing nonprofits to adapt swiftly and allocate resources where they were most urgently needed.[5]
Examples of organizations which have explicitly embraced the trend include Yield Giving, led by MacKenzie Scott, the Altruist League, led by Miloš Maričić, as well as Sheng-Yen Lu, Durfee, Satterberg, and Stryker Johnston foundations.[5][6]
Challenges
editA challenge in adopting the practice is maintaining meaningful impact measurement while reducing reporting requirements for the grantees. Foundations must balance the need for accountability with a commitment to trust, often by finding alternative methods, such as open conversations or simplified reporting options, to ensure they stay informed without imposing excessive administrative burdens.[7]
A strategy for addressing this challenge has been the deployment of artificial intelligence techniques for discovering suitable grantees and tracking their achievements.[8][4] Some organizations have had success at scale with this approach, combining a network of analysts with machine learning techniques involving web scraping and Natural Language Processing.[9]
References
edit- ^ a b "The Strategic Value of Trust-Based Philanthropy (SSIR)". ssir.org. Retrieved 2024-11-07.
- ^ Miller, Tom (2022-03-16). "Trust-Based Philanthropy: A Primer for Donors". NPTrust. Retrieved 2024-11-07.
- ^ "The Rise of Trust-Based Philanthropy (SSIR)". ssir.org. Retrieved 2024-11-07.
- ^ a b Maričić, Miloš; Chernova, Ekaterina (June 16, 2021). Fixing Philanthropy: Six Principles for Actually Improving the World When Giving Away Money (1st ed.). Geneva: Altruist League. p. 135.
{{cite book}}: CS1 maint: date and year (link) - ^ a b Finchum-Mason, Emily (2022-05-04). "Some funders are embracing 'trust-based philanthropy' by giving money without lots of obligations". The Conversation. Retrieved 2024-11-07.
- ^ "Milos Maricic - Artificial Intelligence & Philanthropy - UNIGE". www.unige.ch. 2023-08-09. Retrieved 2024-12-06.
- ^ Weingartner, Eric (August 7, 2024). "Trust-Based Philanthropy Isn't an Excuse to Ignore Metrics — It's the Opposite". Chronicle of Philanthropy. Retrieved November 7, 2024.
- ^ Ugazio, Giuseppe; Maricic, Milos, eds. (2025). The Routledge handbook of artificial intelligence and philanthropy. Abingdon, Oxon ; New York, NY: Routledge. ISBN 978-1-032-74301-1.
- ^ Altruist League (November 7, 2021). "Altruist League's methodology: a factsheet" (PDF). Altruist League. Retrieved November 7, 2021.