Trust-based philanthropy: charities need to be more honest, say funders


Claudia Cahalane


Civil society organisations need to be more honest and open with funders, suggested panellists at AVPN’s global conference session Decoding the Meaning of Trust-Based Philanthropy.

At AVPN’s event last month in Abu Dhabi, philanthropic organisations spoke of instances where they felt grantees should have been more open or honest with them in a session dedicated to flipping the conversation on trust-based philanthropy.

One panellist, Pamela Alexander, managing director and head of corporate citizenship, KKR & Co Ltd, commented: ‘We had a strong partnership with an organisation and had been evolving a new programme together. As soon as they received funding, they merged with another organisation and the programme ceased to exist. They were kind of surprised {that it affected us} and didn’t think it would matter.’ 

The AVPN panel discussion was designed to provide a counter viewpoint in the conversation on trust-based philanthropy: a viewpoint which says civil society organisations could do more to earn trust from funders.

Stories came after panel host Caroline McLaughlin, founder of Heriot Row Advisors, asked funders about when their trust was let down by grantees. The aim being to provide counter points in the discussion around trust-based philanthropy, which normally focuses on grantees wanting more flexibility from funders.

Lack of transparency when engaging with funders

Another panellist spoke of lack of transparency when the CEO of an organisation it was funding was sacked without the funder knowing. Another, said the CEO of a funded organisation was working at a different organisation at the same time as the one being funded, and hadn’t told them.

Separately, Panellist Yibin Chu, head of community programs at Citi, said that one of the organisations his company had been funding had problems ‘bubbling away’ for a long time, but didn’t tell Citi. The next thing they heard on the matter was when the grantee organisation had to close down because of the troubles. He said his team might’ve been able to help had they been more informed of internal problems.

Neera Nundy, partner and co founder of DASRA, also on the panel, said it was more helpful for charities if they shared what was going on internally with their funders. She urged charities in the room: ‘Have the courage to share; funders want you to succeed.’

Trust-based philanthropy is generally understood as referring to the practice of funders allowing more freedom to those they fund, or unrestricted funding, trusting that civil society organisations, often deeply planted in communities, know how best to allocate resources.

Shifting power to communities through trust-based philathropy

The aim of the trust-based philanthropy movement is to shift power from rich organisations lacking in diversity, to diverse visionaries in the social impact space who need more resources. The Stanford Social Innovation Review dedicated its spring 2024 edition to trust-based philanthropy, featuring multiple voices from the civil society calling for more freedom from funders.

The AVPN panel discussion was designed to provide a counter viewpoint in the conversation on trust-based philanthropy: a viewpoint which says civil society organisations could do more to earn trust from funders.

While the panel were broadly in agreement with the common notion of trust-based philanthropy, most said they felt trust should go both ways, believing that charities could also build trust through revealing internal difficulties or important changes and challenges and coming to them with problems or issues.

Why regular reporting to funders is still important

The panel also said that regular reporting from grantees of the results of funding remains important to gain trust from funding teams, even though they know grantees find this burdensome and restrictive. The call of the trust-based philanthropy movement is to move away from onerous reporting.

Several on the panel said that while they don’t want to overburden grantees, their companies want to know where money goes, and want proof that it’s being used in the best way possible.

Sarah Jeffrey, head of health at Vitol Foundation explained: ‘We have an approval panel. We want buy in; want them to see projects moving forward and not to have money pushed back when there’s talk about budgets at board meetings.’

The session Decoding Trust-Based Philanthropy was voted by Alliance readers as the session they most wanted covered at the AVPN Global Conference in Abu Dhabi last month. The session was well attended by around 150 people delegates.

Claudia Cahalane is the investments editor at Alliance

Tagged in: #AVPN2024 Trust-based philanthropy

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