Grant Makers Push for More Trust in Relationships With Nonprofits

A group of grant makers will fan out across the country over the next five years spreading the gospel of trust, in which foundations abandon their traditional role as gatekeepers and begin to see nonprofits as true partners.

Seven foundations have dedicated a total of $1.5 million to the Trust Based Philanthropy Project. The group encourages practices like providing multiyear grants for general operations, streamlining the grant-application process, doing “homework” about grantees instead of requiring a lengthy due-diligence process, and soliciting and acting on suggestions from grantees.

They’ll take their message to the Midwest next week at a meeting of the Iowa Council of Foundations and will follow up at conferences planned by grant-making associations in the months ahead in California, Ohio, Maryland, and North Carolina. Members of the group will share how they have attempted to address what they see as an unhealthy power dynamic between wealthy philanthropies and nonprofits forced to act as supplicants.

Half of the support comes from the Whitman Institute, a San Francisco philanthropy that plans to spend down by 2022. As it prepares to close shop, most of its work will be focused on spreading the word about its trust-based approach. The other participants that have made financial commitments are the Durfee, General Service, Headwaters, Robert Sterling Clark, and Satterberg foundations. Thousand Currents, which supports global grassroots movements, is also involved as an advisory partner.

Each of the project’s members has had a different experience with trust-based philanthropy, says Pia Infante, Whitman’s co-executive director, who describes the approach as a set of values rather than a prescriptive approach to grant making.

Infante hopes the group won’t only be able to spread the word to other grant makers. She also wants to collect information about the experiences other grant makers have had and share them on the project’s website. She said the group expects to have “concrete stories” about how larger foundations have moved toward a trust-based approach by the end of the year. But the group doesn’t have a goal to bring a specific number of foundations into the fold.

“We don’t want to be overambitious because we are talking about a sector that can be highly resistant even to changes that have been talked about for a long time,” she says. “There’s been many proclamations about why unrestricted support is so much better, for instance, and yet we don’t see a sea change.”

That said, Infante is confident that as the group serves as a matchmaker to connect foundations with their peers, the idea will become more popular.

Long term, she’s got her sights set high.

Says Infante: “We want this to be standard fare for the sector.”

The trust-based approach is one of several efforts underway to even the power imbalance between foundations with cash and the nonprofits lining up for grants. Some groups, like the Justice Funders, are working with foundations to align practices with social-justice values.

The National Committee for Responsive Philanthropy has designed an assessment tool that foundations can use to determine whether they are wielding their power in a way that hurts grantees.

Others are pushing for the spread of “participatory grant making” in which foundations cede power over their grant-making budget to people in the communities they serve. And other groups taking part in the #disruptphilanthropy campaign have encouraged grantees that have felt mistreated by foundations to share their stories publicly.

Headwaters Fund

Nonprofits Struggle

During her nearly 20 years as a program officer at several California health foundations, Brenda Solórzano became increasingly disillusioned. She’d watch in dismay as grantees “twisted themselves into pretzels” to serve the whims of the organizations that supported them.

In one case, a group of grantees scrambled to change the focus of their work at the request of a supporter from access to care to running programs that focus on the quality of care. Three years later, the foundation changed course, dropping the program altogether, and the grantees were sent scrambling again.

Solórzano also saw nonprofits struggle to fill out paperwork to get a grant when she was certain, through the relationship she’d built with the groups, they had already made the grade.

“I pretty much knew that if I hopped through all the hoops I needed to hop through, and they hopped through all the hoops they needed to hop through, that we would be able to give them money,” she says. “That’s a lot of hopping, and I’m not sure what the value add was to all the hopping we did on both sides.”

Solórzano was ready to leave philanthropy. She saw foundation professionals attend the same conferences, get the same advice, and replicate all the errors they’d previously committed.

“I was at my own personal crisis moment,” she says. “I wasn’t making the world a better place. In fact, it felt like we were going backward.”

An opportunity to design a philanthropy from the ground up kept Solórzano in the mix. The Headwaters Foundation in Missoula, Mont., was created in 2016 with more than $100 million in assets set aside from a hospital acquisition and was looking for a leader and open to new approaches.

Since arriving in Montana, Solórzano has tried to infuse a sense of trust in the grant maker’s work.

Getting a grant should be no more difficult than applying for a credit card, she says. That’s the thinking behind Headwaters’ GO! grants. Nonprofits that fill out a form with some basic information are promised a decision within 24 hours, and a $5,000 check within two weeks. All they have to do is be a legitimate nonprofit located in western Montana and serve Headwaters’ mission of supporting food security, health, education, and environmental programs.

The grants are for general operations — hence, “GO.”

Solórzano tells recipients: “We’re going to trust you. That’s going to be the starting point for us to have a relationship with you, and we’ll go from there.”

A strong relationship with a grant maker is essential, says Jessy Lee, executive director of the North Valley Food Bank, one of the 73 GO! grant recipients. But Lee is one-half of a two-person, part-time administrative staff. Going through the rigmarole of applying for foundation support is beyond the small staff’s reach, especially if the odds are against getting the grant.

“I just don’t have time,” she says. “This is a way to get your foot in the door.”

Coffee Shop Assessments

The foundation is currently designing ways to measure the impact of the grants. It is doing so not by forcing grantees to pen detailed reports but by holding conversations in a Missoula coffee house, Solórzano says.

So far, the trust-based approach has taken some getting used to, she says. Some larger nonprofits weighed against the scattershot approach; the money would be better used, they said, building on programs the foundation had already invested in. And other foundations have expressed concern that Headwaters would be excoriated in its financial audit because it wasn’t using its resources responsibly (Solórzano says the audit went fine).

For the approach to work, trust must flow in many directions, Solórzano says. Her board must trust her. She must trust her staff. The foundation must trust the nonprofits it works with, which, in turn, must trust Headwaters.

Bob Phillips, the chairman of the Headwaters board, says there has been “pushback” on some aspects of the approach. In particular, some board members want more certainty that the grant money is well spent.

“We do need to be responsible and not abrogate our fiduciary duty over the funds,” he says. “That’s a good conversation to have. But we go into that conversation after our grantees provide us information about what the measurement might be. They’ve demonstrated a commitment to their work, and their knowledge and familiarity with it needs to be appreciated and understood.”

Entrenched Power Dynamic

Phillips thinks it helped that Solórzano came in with a clean slate. He and the other board members had never run a foundation and were open to new ideas, he says. But it remains to be seen how broad an appeal the trust-based approach will have with larger grant makers with extensive bureaucracies, or a history and culture that place power in grant making squarely in the hands of foundations.

The power dynamic is so ingrained, says Philip Li, president of the Robert Sterling Clark Foundation, that grantees sometimes have a difficult time adjusting. To save time completing paperwork, the Clark Foundation allows nonprofits to submit any application they’ve previously submitted to another grant-making organization. And it uses something called a Check-in Analysis Tool, or CHAT, to conduct a large part of its impact assessment. The tool is literally a chat: a conversation with a grantee that allows Clark to understand how the nonprofit is doing.

The casual talks can be difficult, Li says, because grantees are sometimes used to being held at arm’s length from the foundations that support them. In the talks, Li says, grantees will “code-switch,” going from a defensive posture because oversharing may have had negative repercussions in the past, to an open dialogue with an equal partner.

Li isn’t sure how the approach will look for larger foundations. That’s a question, he says, that the project hopes to answer in the next few years. But grant makers are curious. Last week Li hosted a breakfast in New York where he and Infante made a case for trust-based philanthropy to people from more than a dozen grant makers, including the Ford, Open Society, Robin Hood, Surdna, and Brooklyn Community foundations.

One reason Li and the other project members are hopeful is that the increasing focus on equity among grant makers is making them more aware of the power imbalance between foundations with rich endowments and nonprofits struggling to make payroll.

Another reason for hope, Li says, is that grant makers across the country have been practicing bits and pieces of the approach for years. As grant making has evolved, those practices have accumulated, and proponents of trust-based philanthropy have simply tied it all together and given it a name.

“It’s not that all these people are becoming adopters all that quickly,” he says. “It’s that people who’ve already been doing it for many, many years now have something they can call it.”