In today's rapidly evolving philanthropic landscape, organizations are increasingly recognizing the power of trust-based approaches to drive meaningful impact. Trust-based philanthropy represents a paradigm shift from traditional models, emphasizing collaboration, transparency and empowerment of grantees and stakeholders. This approach not only enhances the effectiveness of philanthropic efforts but also fosters stronger relationships between funders and recipients.
Understanding trust-based philanthropy
At its core, trust-based philanthropy is a charitable approach that reimagines and rebalances decision-making, rooted in the belief that those closest to the issues are best equipped to develop solutions. This approach encourages funders to relinquish rigid control, instead placing trust in grantees and communities to guide decision-making and resource allocation to drive better outcomes and lasting impact. It involves providing unrestricted multi-year funding, simplifying application and reporting processes, being transparent and responsive, soliciting and acting on feedback and offering support beyond funding.
Key strategies for implementation
There are several trust-based philanthropic strategies corporations can implement to embrace these principles, the result of which is more equitable, effective and sustainable programs.
Empowering stakeholders
The first trust-based philanthropy strategy to recognize is empowering stakeholders. I recently hosted a conversation at bbcon with Mollie Phukan, whose financial services organization has taken significant strides in empowering its stakeholders to guide philanthropic decisions. By increasing trust in employees and local communities, the organization has created a stronger sense of belonging and engagement. This approach extends beyond the U.S., with initiatives implemented worldwide. The key to the success of this strategy is to establish mechanisms for stakeholder input in decision-making processes, such as employee-led giving committees or community advisory boards.
Expanding global reach
The global nature of many organizations today necessitates a philanthropic approach that transcends geographical boundaries. The financial institution we support has successfully deployed this strategy by extending its philanthropic and volunteer efforts internationally, recognizing the diverse needs of its global workforce and the communities they serve. The company’s leaders learned that empowering their local teams to make decisions about giving and volunteering in their communities yields far more impactful results. By trusting their stakeholders on the ground, they can address unique regional needs more effectively and develop flexible programs that can be adapted to local contexts while maintaining core principles of trust-based philanthropy.
Direct grants to individuals
An emerging trend in the philanthropic sector is the provision of direct grants to individuals, an area where trust-based principles are particularly relevant. E4E Relief, the first 9/11-responsive organization awarding emergency financial grants directly to individuals sponsored by their employers has demonstrated the significant impact of this method. During our bbcon presentation, we highlighted how integrating employee relief into a company’s engagement and philanthropic strategy has positively affected company culture and employee engagement. Providing grants to individuals also creates a space for dignity preservation and highlights trust in the grantees’ wisdom to know how best to appropriate the funds.
Measuring Impact and Outcomes
E4E Relief's ImpactStack℠ framework provides valuable insights into the social and business outcomes of relief grants to individuals. The Evolving Total Rewards Landscape further explores how data-driven approaches can enhance employee well-being and business outcomes, offering a roadmap for aligning philanthropic strategies with organizational goals. Chartering a robust monitoring and evaluation strategy that captures the quantitative and qualitative outcomes of philanthropic initiatives allows organizations to better understand the significance of their efforts and make informed decisions.
When the proverbial rubber meets the road, results speak loudest, and we have seen firsthand how a holistic trust-based philanthropic approach can create significant positive effects on company culture and employee well-being. For example, in the last year 93% of surveyed grantees reported experiencing increased financial well-being, 96% reported a desire to continue working there and 86% reported an increase in productivity. These social and business returns on investment can prove invaluable with respect to HR, CSR and ESG reporting.
Trust-based philanthropy represents a powerful shift in how organizations approach giving and community engagement. By embracing strategies that empower stakeholders, expand global reach, incorporate direct grants and leverage data-driven frameworks, organizations can create more impactful and sustainable programs.
Conclusion and Next Steps
For those looking to implement trust-based philanthropy within their organizations, here are five key concepts to consider:
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Offer multi-year unrestricted funds
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Simplify and streamline applications and reporting
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Be transparent and responsive
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Provide support beyond finances
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Communicate, collaborate and co-create
Ultimately, the key lies in fostering a culture of trust, transparency and collaboration. By doing so, you can unlock the full potential of your philanthropic efforts and create lasting positive change in the world.
