In 2020, grant makers swore up and down that they had changed. Instead of attaching restrictions and rules to the funds they provided, many foundations said they would loosen their controlling grip. But despite the talk, a wide swath of foundations never adopted new approaches, and it isn’t clear whether those that did during the pandemic and racial reckoning will revert to their old ways of doing business.
The effects a less top-down relationship with nonprofits aren’t yet known.
Nonetheless, a new movement — what some called trust-based philanthropy — succeeded in getting grant makers long resistant to change to rethink how they wield power over the nonprofits they support.
A group of foundation leaders, including Pia Infante, then at the Whitman Institute, formed the Trust-Based Philanthropy Project shortly before the pandemic in 2020.
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Infante and her peers urged grant makers and donors to provide general support so grantees could use the money as they saw fit instead of the foundations supporting specific programs and requiring nonprofits to meet goals dictated by foundation staff. And they pressed foundations to replace the painstaking process of making nonprofits apply for funds each year with offering grants over several years and making applications easy to complete.
Doing so, they argued, would free nonprofit leaders from some of the hassle of endless fundraising and allow them to have more power over how to put grant money to use.
The approach is meant to correct decades of top-down grant making that exacerbated racial inequities and led to underfunding of BIPOC-led nonprofits, Infante says. Foundations’ traditional grant-making approaches, she says, have eroded trust from nonprofits with which they should be collaborating on common problems.
“There isn’t some kind of national standard for how to conduct philanthropy,” Infante says. “A lot of it is just habit.”
In addition to promoting multiyear, general operating support grants, the project urged foundations to be more responsive to nonprofits’ queries, to solicit and act on feedback from grantees, and to provide nonprofits with help beyond a grant, such as by making introductions to other funders and providing leadership training.
The Trust-Based Philanthropy Project was instrumental in getting 806 foundations to sign a pledge at the dawn of the pandemic to adopt parts of the trust-based formula. In the years since, more than 1,000 funders have joined an information-sharing platform run by the Trust-Based Philanthropy Project to learn about the approach. Aspects of what the project is after are probably most clearly embodied by the gifts of MacKenzie Scott, who in 2020 began giving away billions of dollars in general support.
The number of grant makers that began to step away from a command-and-control approach has been significant, especially in a field long resistant to change, says Phil Buchanan, president of the Center for Effective Philanthropy. The way foundations make grants has changed more in the past three years than it has in decades, he says.
That said, less than half of the nearly 300 nonprofits surveyed by the center in 2023 reported more multiyear grants with fewer restrictions than in the previous year.
“Calling it a sea change would be an overstatement,” Buchanan says.
A larger share of nonprofits reported that foundations have made it easier to apply for grants. Those changes may stick, Buchanan says, but he says that a backlash against social-justice groups focused on racial equity and other factors, such as the economy, make it hard to predict whether foundations will increase multiyear commitments.
One grant maker, the Walter and Elise Haas Fund, is taking the long view seriously.
We’re seeking to demonstrate more and more that trust-based philanthropy is an effective and strategic philanthropy, not just a ‘nice guy’ philanthropy.
In April, it gave a select group of nonprofits something almost unheard of in the foundation world: annual grants of $500,000 each for a whopping seven years through a new program called the Endeavor Fund. Not only was the duration of the grant a rarity in philanthropy circles, but the seven recipients can decide how to put the money to use in closing the racial and gender wealth gap in the San Francisco Bay Area.
Changes at Haas aren’t limited to its new Endeavor Fund, says Jamie Allison, Haas’s executive director. Over the past three years, the foundation has allowed all of its grantees to decide whether they want grants to cover their general operations or if they want project-specific grants. (Most choose grants with no restrictions.) The foundation also has made its grant application and reporting process much simpler.
It’s a big change for Haas, which for nearly eight decades mostly offered grants of less than $50,000 for up to two years.
The changes reflect a different mind-set for the fund: Instead of thinking of themselves as funders of nonprofits, staff members at Haas began to view themselves as partners of nonprofits who should do whatever it takes to help them succeed, Allison says.
“It doesn’t mean that the work we’ve done to date hasn’t had merit, but at 78 years old, should we evolve?” she asks. “Should we make sure we’re as relevant as possible?”
Nonprofits were stretched thin during the pandemic, and their role as essential providers of services was made clear to grant makers, says Akilah Massey, vice president of programs at Grantmakers for Effective Organizations. Foundations realized that it didn’t make sense to have money tied up in restricted grants as the nonprofits they support struggled to respond to an unexpected global health crisis.
The reason multiyear support and general operating grants haven’t become standard, Massey says, is that it is difficult for foundation leaders to change mind-sets and let grantees have more sway in the decisions about where to put philanthropic resources.
“That’s a hard shift to make,” she says.
To establish a lasting shift in grant making, foundations need to rethink the role of program officers, who often deal with the nuts and bolts of grant compliance and measuring impact.
The big challenge is to find ways to demonstrate the positive effects of things like multiyear support and unrestricted grants, says Infante, at the Trust-Based Philanthropy Project.
According to the project’s internal polling this year, more than two-thirds of members have increased or introduced general operating support grants. But only about one-third provide both multiyear and unrestricted grants in the majority of their funding. That’s a low number, Infante says, for a group of grant makers that have already committed to making changes.
Anecdotally, Infante says, she’s hearing from more members that they are having to go back to their board members to rally for the cause.
A big selling point over the next year, she says, would be to show that the approach works.
“We’re seeking to demonstrate more and more that trust-based philanthropy is an effective and strategic philanthropy, not just a ‘nice guy’ philanthropy.”
