Scroll through your LinkedIn feed or read any number of articles on this site, and two words will inevitably make an appearance: trust and power — and their place in the practice of philanthropy. Such conversations are essential to improving grant making and disrupting the inequitable power dynamics in the field.
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But there’s another side to the story, one that may be obscuring deep problems in the sector.
Most discussions about trust-based philanthropy narrowly focus on whether the funder trusts the grantee, and what that means for grant making. General operating support is seen as more trust-based than project support. Flexibility in reporting requirements is considered a better demonstration of trust than sticking to a one-size-fits-all template.
But trust goes in both directions. And too often, the buzz created by one trust-based funding approach overshadows the reality that many bad practices persist.
Can trust really be built within the parameters of a time-bound grant that restricts grantee work and creates the potential for a funding cliff when the dollars stop coming? Do those enormous one-off grants known as big bets foster a sense of solidarity? Can an influx of reactive funding to address a highly visible problem, such as racial justice work following George Floyd’s murder, have a destabilizing effect on organizations when attention wanes and the grants aren’t renewed?
Such donor decisions can produce an outsize impact on grantees, especially front-line social change and human rights workers, who must already adapt to near constant change, including climate crises that are harming their communities, ongoing wars and conflicts, and rapidly changing laws that affect nonprofit funding in place such as the former Soviet states of Georgia and Kyrgyzstan.
Harmful Donor Pivots
In such difficult environments, rapid pivots, major transitions, and sudden plans to wind down grant making, create major — and sometimes insurmountable — challenges for grantees. Yet many of the same donors who are touted for their commitment to trust-based practices contribute to this uncertainty.
The most recent example is Wellspring Philanthropic Fund, which announced last month that it will completely cease operations by 2028. For those of us working in the human rights and social change arena, where Wellspring is a critical funder, this was another piece of devastating news in a growing list of such developments. The foundation’s leaders have assured grantees directly that they are committed to ethical exits that won’t leave them in the lurch. Yet those of us who depend on Wellspring’s funding are left wondering how to fill the gap. Roughly 10 percent of the annual budget for our organization — the Fund for Global Human Rights — comes from Wellspring.
Wellspring is only the most recent example of a funder undergoing a seismic shift in its practices. Last year, Open Society Foundations announced that it planned to overhaul its funding strategy and operations, which included laying off 40 percent of its staff. As the top funder of movements to advance human rights and democracy across the globe, this transition has left many nonprofits in limbo. A year later, the details of OSF’s plan remain unclear, but its move to consolidate and narrow its focus seems likely to result in less support for the human rights work it has backed for decades.
Even MacKenzie Scott’s much-lauded approach to philanthropy, including a welcome shift toward more funder flexibility and accountability, may contribute to uncertainty for organizations that are navigating other donors’ changing priorities. Our organization was grateful to receive one of Scott’s no-strings-attached gifts — invaluable support at a time when unrestricted funding is increasingly difficult to come by. At the same time, we don’t know if there will be a second gift and worry about the prospect of a funding cliff, particularly as constantly evolving philanthropic priorities make gifts like Scott’s ever more critical.
Because Scott’s funding comes in the form of a one-time gift, it also leaves no opportunity to build a relationship with her or her team. The Trust-Based Philanthropy Project points out that this kind of giving does not allow funders and grantees to share power and risk, or learn together in a collaborative manner that builds long-term trust.
This lack of funding continuity is particularly challenging for groups that exist in large part to disrupt power imbalances, whether combating racial injustice or operating in war-torn and anti-democratic environments. Grantees need to trust that a donor will be there when authorities unilaterally close their bank accounts. They need to know that a foundation will step up with emergency funding when a grantee’s leaders are arrested or brutalized for speaking out for basic rights.
The Fund for Global Human Rights — like so many other intermediary grant making institutions — aspires to provide stability and a safe harbor for the movements we support. But we rely on consistent funding to do that.
Some suggest that social change organizations should work toward becoming self-reliant, or at least diversify their funding to adapt to market forces. But we are not corporations. As nonprofits operating in an economic system that prioritizes profit-making, we do not intend to adopt the very structures we seek to dismantle.
Power Imbalance
In our view, this argument skirts the issue of power differentials at the heart of the philanthropic sector. Social change organizations are not set up to churn a profit but rather to generate, well, social change. That means moving away from a scarcity mindset that pits groups against each other in a competition for limited resources. Instead, philanthropy needs to embrace the view that sustainable social change happens when nonprofits, funders, community-based groups, and other stakeholders work together to address challenges.
Large funders are not neutral players in this collaborative ecosystem — they are active participants, just like grantees. When they shift their entire focus from, say, racism to climate, they ignore the interrelated nature of the world’s problems, essentially robbing Peter to pay Paul. They should instead take an intersectional approach to funding, recognizing that sometimes the most effective climate action is, for instance, supporting gender justice, or that in some places tackling poverty requires first tackling racism.
Instead of jumping ship when results feel elusive, funders should work with grantees to better understand how to effectively measure their impact. They should build long-term relationships with grantees based on what Leah Hunt-Hendrix calls “philanthropy-in-solidarity,” rather than giving time-bound grants that precipitate funding cliffs or one-off investments that come without deeper partnership. And both donors and grantees should pursue a two-way approach to trust that openly recognizes the power imbalances inherent in philanthropy.
Certainly, many grant makers pivot because they believe it will help them achieve better results and want to pursue their visions for change. They can, of course, do as they please with their money. But any funder who wants to deploy its resources toward justice and equality must be aware that continuity is key. The opposite of a pivot is not to stay static — rather, it is to learn from our collective experiences and adapt together to create the world we want to see.