How foundations are trying to build trust with nonprofits

Gripes about tedious grant applications and lack of general operating support are aplenty in the nonprofit world. Shaady Salehi was no stranger to those troubles when she took on her first executive director role at a San Francisco-based nonprofit. Left stressed and frustrated in her interactions with funders, Salehi said she found relief in one foundation: The Whitman Institute. It also happened to be the only funder providing her organization with general operating support.

“The type of relationship I had with the leadership of the Whitman Institute was one where I could talk to them about anything,” she told NYN Media. “I could talk to them about the stresses and pressures of being an executive director.”

Salehi now serves as the director of the Trust-Based Philanthropy Project, a five-year initiative launched last month by funders who embody the set of principles initially embraced by The Whitman Institute. Its goal is a culture shift to encourage peers to cede control and give more flexibility to their grantees. 

The concept of trust-based philanthropy boils down to several components, including providing multi-year, unrestricted funding to organizations as well as reducing their administrative burdens. For funders, that means taking on more responsibility to research grant applicants and even accepting proposals originally written for other foundations. Foundations are also encouraged to become more communicative and transparent with their grantees.

“I think we’re trying to figure out how we can actually be good partners in supporting (grantees) and their work as opposed to always looking to evaluate and assess them, and see if they’re worthy,” said Philip Li, president and CEO of the Robert Sterling Clark Foundation, which serves on the steering committee for the project. The nonprofits it works with have become more open about difficulties or experiences they have in their work as a result of adopting trust-based philanthropy, he said. 

Susan Stamler, who leads United Neighborhood Houses, said that the Robert Sterling Clark Foundation’s general operating support and streamlined application process was refreshing.

“You’re allowed to create a relationship that you know that is likely multi-year, and that the whole process respects the fact that you’re probably preparing proposals for all these other foundations,” she said.

Many of the practices behind trust-based philanthropy aren’t entirely new or unique. Paying overhead for nonprofits, for example, has been an increasingly prominent discussion in philanthropy. Last year, five top foundations pledged to do more to cover those indirect costs. But proponents of trust-based philanthropy have hailed the term as a convenient way to discuss these different practices as a whole package.

The initiative currently has about $1.7 million in funding, which will be used to develop resources for foundations and to create a centralized space for funders aligned with the principles of trust-based philanthropy. So far, dozens of organizations have reached out, primarily to build a community with fellow trust-based funders or to seek advice on how to make progress on adopting more aspects of trust-based philanthropy.

Challenges lie ahead in helping foundations to take it up, however. For Salehi, one of the biggest questions people have is to figure out how its principles could be scaled up for larger foundations. Changing the structure of private foundations versus community foundations also presents different obstacles, said Jennifer Ching, executive director of the North Star Fund and a supporter of the project, as community foundations may be beholden to donors who have specific intentions with money.

“The conversation I want to have with folks, and the conversation I do have on a daily basis, is what is this control rooted in?” she said. “And we need to really reframe how we view power within philanthropy.”

When Li spearheaded the Robert Sterling Clark Foundation’s shift toward adopting more flexible grantmaking approaches, some of biggest challenges actually came from grantees themselves. 

“Some folks have said we’ve made it harder for them, interestingly,” he said. “I think a couple of our grantee partners have said that – because we use this particular approach and we’re in the distinct minority of the folks who fund them – they have to code switch, if you will, in terms of being potentially more open or thinking of this in a different way from some of the other relationships that they have.”