Recently, Simon Sommer of the Jacobs Foundation in Switzerland wrote a critique of the practice of trust-based philanthropy (TBP), a framework for giving that’s gained popular acclaim within our sector over the past several years.
We at Phīla Engaged Giving welcomed this earnest critique of TBP. Questioning any popular wisdom in these divided times takes courage, and it’s vitally important that philanthropy remains a sector where this kind of thoughtful discourse is encouraged. Regularly questioning our assumptions and challenging each other is what’s going to make all of us better at this work.
Sommer raises several criticisms of TBP but admits he doesn’t have much experience practising it. We do. As philanthropic advisors serving ultra high-net wealth families and individuals, we actively encourage our clients to practice TBP in their giving strategies to challenge traditional philanthropic norms that show up within the culture of the organization, its structures, practices, and leadership. Understanding why it’s so important requires some context.
For generations, philanthropy has supported certain groups and excluded others. According to the Trust-Based Philanthropy Project, a five-year, peer-to-peer funder initiative to address the inherent power imbalances between foundations and nonprofits, ‘the sector has contributed to systemic inequities both in the ways wealth is accumulated and in the ways its dissemination is controlled.’
It’s human nature to trust those who look, think, and behave like us. It makes sense that philanthropists would choose to give to people and organizations that serve the interests of people they can identify with. That is why large universities, hospitals and religious institutions dominate when it comes to where ‘Big’ philanthropy has traditionally been funnelled.
The problem with this kind of philanthropy is that it overlooks huge segments of the population that just don’t look like traditional grantees. In the U.S, for example, Black, Indigenous and Persons of Colour (BIPOC)-led organizations to receive dramatically less funding than White-led groups. How much less?
- Only 0.23 per cent of philanthropic dollars are awarded to Latinx communities in the US.
- For every $100 awarded by foundations for work in the United States, only 20 cents of that is designed for Asian American communities.
- Just 2 per cent of all American cultural institutions receive 60 per cent of all donations.
Most of our clients come to us with some level of interest in social justice philanthropy. Many are concerned with the yawning racial wealth gap in this country. Others express a deep desire to uncover the roots of institutionalized racism in the US and use their wealth, power and privilege to heal wounds and set our country on a more equitable path. Practising Trust-Based Philanthropy can help, because the framework calls on funders to examine the structural and relational conditions necessary for a trust-based giving to flourish, including:
- centring equity, humility, and transparency;
- recognizing the power imbalance between funders and grantees, and working to actively rebalance it;
- and deeply valuing the quality of relationships, and honouring the treatment of others on the path to winning on issues, as much as the act of winning itself.
Here’s an example. We recently served a family client whose wealth came from what they suspected were exploitative practices carried out five generations ago. Some members of the family had a deep desire to use their philanthropy to connect with communities they hadn’t been exposed to.
It took time, but we were able to help this multi-generational family come together and create a shared vision for their philanthropic giving that centred on small, BIPOC-run organizations. The family committed to doing their homework. They learned as much as they could about potential grantees so that the burden of determining whether the organization was a good fit for funding rested on the family–not the nonprofit. And then they initiated conversations with those they wished to fund, asking them what would be most helpful and committing to multi-year, unrestricted funding and other support that put power in the hands of those doing the work.
This is what Trust-Based Philanthropy looks like for us. It is not an arbitrary approach to giving where the funder blindly supports a grantee no matter what. Instead, it’s one based on real data showing that small, BIPOC-led organizations have been historically overlooked by funders, to the detriment of society. Practising TBP is a way for funders to examine their relationships with grantees, hopefully opening a door to new dialogues and more dramatic, lasting, and inclusive change.
Lauren Janus and Janell Johnson work at Phīla Engaged Giving.