We are living today in a world shaped by conflict. And conflict makes philanthropists uncomfortable. This is not unique to them. In practice, individual aversion to conflict often leads to organizational avoidance of intervention in conflict, whether the organization is a company, a non-profit or a foundation. It is a rare foundation that takes on any effort to mediate conflict directly once it starts.
De-escalation of conflict is for the common good. Therefore, it should be within philanthropy’s mandate. Yet it is rare that funding is directed to specific initiatives to prevent or de-escalate conflict. A 2019 survey found that peace-related global grantmaking comprised less than one percent of all grants.
Why are foundations reluctant to support conflict de-escalation or peacebuilding? Some argue that this kind of grantmaking means taking a political stance. Others say that it is too difficult to do, too hard to measure, beyond their field of expertise. This might be true. But it could also be a definitional issue.
Broadly speaking, if conflict is defined as inter-state violence, or war, there isn’t much that foundations can do to prevent or resolve it directly. Yet before there is war, there are factors that build to war - religious or inter-communal tensions and polarization, inequality, poverty, injustice or social isolation.
Can foundations engage in preventing conflict and build peace through efforts to build social cohesion and strengthen civil society infrastructure so that the chances of outright conflict are decreased? Of course. In this way of looking at engaging with conflict, there are multiple models and resources available to Canadian philanthropy.
Mark Malloch-Brown, former President of the Open Society Foundations, in a thoughtful 2024 speech on philanthropy’s role, argued that “those of us in the philanthropic sector need to concentrate not just on peace-building among elites, but on building the long-term civic and interpersonal foundations for lasting peace…. philanthropists need to be a force against complacency, speaking out against assumptions that unresolved conflicts can be merely contained and in favor of deep investments in their resolution.”
Endowed philanthropy has some important advantages in resolving conflict. As Mark Malloch-Brown puts it, “foundations can move very fast to respond to a crisis or opportunity. But we also have sticking power, the ability to invest in causes whose results are measured not in months but in decades. We can be both patient and urgent.” The capacity for nimbleness coupled with the ability to take the long view give foundations a unique organizational advantage. To deploy that advantage, they need to pick their field of action and their most effective strategies for operating in that field.
Human conflict takes many forms: conflicts of ideas and values, interpersonal conflicts, inter-community conflicts and inter-state conflicts. Strategies for dealing with these conflicts can be direct -mediation, structured dialogues, collaborative problem-solving – or indirect - promoting inclusion and reconciliation, countering misinformation, human rights education, narrative change. These strategies are explicitly framed around defusing or preventing conflict, much of it interpersonal or intercommunal.
Some Canadian foundations have cautiously entered this space. Few foundations will act as mediators or dialogue facilitators directly. But they do fund organizations that engage in this work. Teaching mediation skills, combatting discrimination and racism, supporting public interest media and journalism, promoting human rights education and training are all activities that reduce or prevent conflict, as a direct or indirect outcome.
For example, the Brian Bronfman Family Foundation has committed itself to building harmonious relationships within communities in Canada, working through the Peace Network for Social Harmony and supporting Equitas, the leading Canadian human rights training organization. The Law Foundations in every province and territory of Canada fund community mediation, restorative justice and dispute resolution efforts. The Canadian Race Relations Foundation grants to organizations across the country working towards reconciliation and against racism. In the field of narrative change, the Inspirit Foundation does groundbreaking work to build new narratives to counter Islamophobia. And it has joined with Philanthropic Foundations Canada to promote more philanthropic investment in public interest journalism.
Many more foundations in Canada are willing to work upstream well before conflict develops. Conflict prevention itself is not an explicit goal for these foundations. Whether they take a place-based or community-centred approach, or they focus more broadly on systemic/policy change, they want to support community resilience and cohesion, combat social exclusion and injustice, and reduce the potential for conflict.
Many foundations are focused on the conditions which make it easier for communities and individuals to tip into conflict. Philanthropic strategies focused on building social cohesion and democratic or community empowerment have a strong connection to conflict prevention, even if it is not explicit. Examples of this include philanthropic investments in civic infrastructure such as parks, libraries, theaters and community centres. These are essential places where people can gather, learn, exchange, and engage positively with each other.
Other examples of more systemic interventions are structured community dialogues, such as the Collective Impact Project in Montreal, funded by foundations to build community capacity to fight poverty and social exclusion, or the Tamarack Institute which is working on a strategy to build a sense of belonging in communities across Canada as a way to help them thrive.
In the end, one could argue that all philanthropic efforts to build a fairer society with more informed, more empowered and engaged members, will create conditions for the reduction or prevention of conflict. Philanthropy’s advantages of time, patience, and sustainable funding may not directly affect the outcomes of wars. But as Malloch-Brown argued, philanthropy can contribute meaningfully to peace over the longer term, by investing in building skills for human relationship and connection and in efforts to create the conditions for civic engagement and community dialogue. These are peace-building investments we need more than ever to give us hope in a time of conflict.
We hear a lot of noise in philanthropy right now. This is especially true In the United States. It’s the noise of calls for funders to step up, spend more, rescue programs, fill gaps, support legal action and advocacy, help a civil society under siege, “meet the moment”. The U.S. federal government is making noise about threatened investigations of large endowments, calls to dismantle diversity, equity and inclusion initiatives, threats against expression of opinion and the rights of refugees. Sorting through this noisy onslaught, the foundation sector in the U.S. is beginning to respond with commitments to increase funding, to commit to funding advocacy and multi-year grants and to speak out for the freedom to give.
In Canada too, the noise around the slipping economy is increasing. Inevitably, much of the noise focuses on financial fears, as charities in Canada report that donations are declining, costs are rising and reserves are exhausted. The threat to Canada’s economy from U.S. actions will only worsen these real concerns.
The noise around financial vulnerability will keep people focused on the amount and pace of foundation spending. There are calls now which will grow louder, for Canada’s 11,500 foundations to give more than the $16 billion they do spend (according to 2023 CRA). This raises a familiar debate about perpetuity versus spend down. Critics argue for an increase in the mandatory payout from 5% of assets to 7% or even 10%, and time limits on the existence of endowments. Others argue that foundations must maintain their capital to play their best role as needed social investors for the long term, however long that is.
But is there a signal being lost in all the noise about money and whether it is being spent fast enough and in sufficient quantity?
This signal is what foundations need to pay attention to. Underlying the argument about money is an argument about what foundations themselves are for. What is their role in a capitalist economy and liberal democracy? The underlying signal is the questioning of philanthropic legitimacy.
There is fragile public support for the foundation model. While direct attacks on foundations in Canada have been rare, the growing size of philanthropic endowments over the past few years is making them more visible. As stresses over inequality increase, so too will suspicion of wealth, even wealth held for charitable purpose and for public benefit. The lack of transparency by most private foundations in Canada leaves them open to this suspicion. In the U.S. opinion polls show support for regulating higher spend rates of endowments and possibly removing tax incentives provided to foundation donors if they don’t show themselves to be more accountable. While a US opinion poll does not predict or reflect Canadian views, this does not mean that Canadian philanthropy should not take advantage of this opportunity to react.
David Callahan, the editor of Inside Philanthropy in the US, has raised concerns about philanthropy’s vulnerability to public attack, pointing out that “public support for philanthropy’s current practices is weak”. He suggests that foundations pay more attention to the need to demonstrate their value to society. Callahan argues that “philanthropy needs to better understand how deep currents of isolation, loneliness, alienation and anxiety have greatly complicated the work of social change. It’s not enough for institutions to solve problems and demonstrate results. What’s also needed is the articulation of a broader vision of human flourishing and the good life that people can believe in.”
How can/should/must philanthropy respond to this signal? What can foundations do to demonstrate their contribution to a more flourishing society? Focusing on the money is not the only answer. Focusing on what the money is being spent on and how it is spent may be as important. Foundations can help create a more flourishing society by increasing people’s sense of belonging, empowering civic voice, reducing polarization and conflict by listening and by directing their help to those who are working to change systems of inequality. And, in Canada’s current situation, foundations can take the opportunity to demonstrate how their work contributes to a stronger country.
This will mean reviewing assumptions, practices and roles as well as adjusting or renewing strategies. Michele Fugiel Gartner of Philanthropic Foundations Canada offers some valuable suggestions for Canadian foundations that are pondering their internal and external actions in this moment. Based on her reflections and those of others, here is my list of ways in which foundations might respond to the legitimacy signal. These can be considered independently of each other but are also mutually reinforcing.
Civil society is under attack in the United States. How does this affect Canadian funders? The calls for support are multiplying. Some of the work that Canadian funders support, whether it is international aid or scientific research, is being demolished. But funders here may feel that they or their partners in Canada won’t come under direct fire. Should they anticipate any differently?
In a prescient article from May 2024, the Carnegie Endowment for International Peace suggested that U.S. civil society organizations will face legal and political intimidation tactics that are similar to those used to harass and silence civil society in Hungary, India and other authoritarian democracies. In anticipation, the Carnegie Endowment put together some notes to guide U.S. civil society groups and foundations in defending against present and future attacks. Carnegie was ringing an alarm well before the election of the current Trump administration, saying that it was important to take measures to strengthen and enable civil society to survive and fight back. And it put the onus on funders to do more to support civil society defense, whether through rapid response grants to counter targeted legal attacks or more broadly to support sector network voices and narratives.
While we in Canada don’t expect direct attacks from an authoritarian government, is it a good idea for Canadian funders to remain oblivious? Authoritarian attacks outside of our borders can influence our own political discourse and intimidate civil society even if there no signs of government antipathy. This suggests that philanthropic funders might take time now to consider the impact of possible restrictions on civic space in Canada. It’s true that we have seen over the last decade some positive developments in federal rules governing public policy dialogue and development by charities. Yet there is a continuing reluctance on the part of charities to engage in such activity, mostly for lack of resources but also because of lingering worry that charities are not permitted to “advocate” for policy change. A July 2024 report from the Carleton Charities Insights Canada Project documents this clearly. Many charities rely on their umbrella or intermediary organizations to do the advocacy work for them. But these organizations are perennially short of funding. There is no guarantee that a change in government will not return us to more constraints on the ability of charities and nonprofits to speak out. Is the charitable sector limiting its own freedom of expression even before such explicit restrictions might be re-imposed?
The Carnegie Endowment notes that “restrictions on civil society and individuals’ right to organize and advocate freely have been defining features of the global democratic recession that has engulfed all regions of the world over the past two decades.” So, what can be learned from the responses of civil society organizations and their funders in other parts of the world? Carnegie lists some valuable lessons:
What can funders do beyond supporting these strategies through funding toolkits, trainings and other information? Carnegie underlines the importance of greater collaboration and standing together for threatened civil society organizations. The role of network organizations in coordinating these efforts cannot be underestimated. Carnegie suggests that funders “support greater coordination and knowledge-sharing by resourcing cross-issue working groups, convenings, and resource platforms focused on threats to civic space.” Organizations in Canada such as Philanthropic Foundations Canada, Community Foundations of Canada, Imagine Canada, Environment Funders Canada and regional networks such as the Ontario Nonprofit Network and the Alberta Nonprofit Network serve this important function of coordinating positions, monitoring legislation and law, and building positive narratives for the sector. There is much for Canadian funders to do that will strengthen nonprofits and their networks in confronting current or future pressures on their right to speak and act freely on issues where they have expertise. A diversity of voices will always be critical to a healthy democracy in a strong and independent country.
Canada is under extreme pressure in the era of Trump. Our independence is being called into question in a way that has not happened for many decades, if not centuries. Our political and economic stability is being turned upside down. And Canadians are rising to the challenge of the moment with declarations of patriotism and defiance. As many are saying, this is a moment when we need to consider defending our nation through nation-building actions. This means investing smartly and rapidly in our hard and soft assets: our resources, our built infrastructure, our brains and skills, our media, our cultural identity.
Does philanthropy have a role in nation-building? Or is it best for philanthropy to focus its resources on “bailing out” organizations most hurt by the upheavals we anticipate? Private philanthropy in the U.S. is feeling both pressure and expectation to step in when government funding of social justice or climate or international development work is cut. This may well be felt to a lesser extent in Canada. There is urgency. The cuts mean real harm to people in the short term. And the response of philanthropy during the pandemic provides a precedent for stepping up and helping. But can philanthropy fill the gap? Is this the best use of scarce philanthropic dollars (and they are scarce compared to public dollars)?
Vinod Rajasekeran at Future of Good has argued that bailout philanthropy, as he describes it, should not simply be about rescuing organizations but also seizing the opportunity for future building. I agree. He suggests that philanthropic dollars, if deployed for rescue, should aim not to maintain a status quo but to make it better. Again, I agree. Private funders can use this opportunity to strengthen the operations of key partner organizations.
Funders can also accelerate their long-term investments in Canada’s future. Many in Canadian philanthropy has made this their strategy for decades. Here are some examples:
And I haven’t touched on many other philanthropic investments being made to strengthen our country. What this tells us is that philanthropy is already playing a strategic role in helping to build some of Canada’s most important hard and soft assets.
Are there still gaps in our nation-strengthening efforts? Yes. Could philanthropy do more and faster? Yes. This is a moment for private philanthropy to think even harder about the necessary long-term investments in creating a stronger Canada. Perhaps foundations will need to talk about aligning their efforts more systematically, since nation-building requires coordination and concentration. The relatively scarce resources of foundations will go farther when applied together. And this is not a matter simply of higher disbursements. The current 5% disbursement quota is a floor not a ceiling. Foundations can and do exceed it. Calling for more disbursements isn’t a strategy without a systematic approach to building stronger organizations and investing in a stronger country. Future-building is well within philanthropy’s mission. I predict we will see more of it in response to today’s Trumpian geopolitics.
Here we are…beginning 2025. Still getting over 2024. And I thought that 2023 was a roller coaster year with more downs than ups! In January 2024, I was apprehensive but hopeful about what might happen to foundations and philanthropy in Canada. At the beginning of 2025 I am feeling perhaps more apprehension than hope.
Am I seeing the same things that others are seeing? I have looked around for predictions and guesses about what 2025 will bring (although I am not commenting on the political and economic front, important as that will be in Canada this coming year). I have listened to a few keen observers on philanthropic trends in the US and UK. Here are the most often mentioned and most worrying trends and concerns they express across borders:
On the more hopeful side:
As in 2024, I won’t make predictions for philanthropy (who can?) but I will suggest some wishes and worries without rating their likelihood of coming true.
In 2025, I wish that…funders will respond creatively to the pressures on civil society
I worry that…some of the risks I saw in early 2024 will become even greater
In what will be a turbulent year, let’s hope that foundations will be anchors of steadiness for many civil society organizations and leaders. Something we can all hold on to!
In 2021, Eric St-Pierre, the Executive Director of the Trottier Family Foundation of Montreal, made a simple but striking statement to me as I was interviewing him for my book on Canadian foundations, From Charity To Change: “If we don’t figure out climate, nothing else matters”.
A major recent announcement from the Foundation demonstrates how seriously it takes this idea.
“We are at a pivotal moment in the fight against climate change, with only a limited window to mobilize the capital necessary to meet this generational challenge. In response, we are increasing our grant allocations and partially spending down our endowment to support the charities and initiatives working to advance net-zero pathways in Canada.”
The Trottier Foundation made this announcement in collaboration with eight other private foundations and donors who are committing $405 million as Climate Champions, “the largest philanthropic contribution to climate solutions in Canadian history”. These foundations and donors are hoping to catalyze commitments by other donors to action on climate, in the face of a low funding commitment by the philanthropic community so far. The effort to galvanize climate philanthropy is coordinated through a platform, the Clean Economy Fund, a pooled fund established some years ago by the Ivey Foundation, a long-time philanthropic donor to climate action, which has made its own galvanizing commitment to spend all of its endowment by 2027.
The funds being committed are important. Indeed, they triple the amount of philanthropic dollars committed to climate philanthropy according to the Clean Economy Fund. But how will they be deployed? The CEF identifies five areas where philanthropic dollars can have the most impact: clean energy and electrification; industry and economy; cities; policy and finance; and people and democracy. Each of the donors who have collectively committed $405 million will fund climate action across one or more of these areas.
If you look deeper into the five areas, the money is being spread across them based on the distribution of the limited dollars committed so far. But how much is going to funding for “people and democracy”, described by Climate Champions as “support for the populations who are at disproportionate risk or face more costs because of climate change”? This includes Indigenous communities, rural communities and low-income urban communities. It’s not clear how much is going to this area. And this takes us to the question of Canadian philanthropy’s role in climate justice.
Does philanthropy have a special role and obligation to work on the consequences of climate change through climate justice? A new publication (in French) from the Fondation de France focuses on the challenges faced by philanthropy in supporting a just transition. As the Fondation de France argues, the climate crisis has multiple dimensions: socioeconomic, democratic, geopolitical. To be effective, philanthropy must take a systemic view of how many factors are playing into ever-increasing carbon emissions and ever more catastrophic climate impacts. This seems daunting. One answer for systemic philanthropic action is to work more closely with people on the ground, in communities, who are trying to change their own circumstances and environments.
What does this mean in practice? Philea, the European philanthropy network, underlining the existential urgencies and the growing public distrust in how established institutions are dealing with the social, economic and environmental crisis, puts it this way: “This means working in partnership with other sectors to bring marginalised and vulnerable groups into decision-making processes about land use and environmental policy. It means taking steps to fundamentally shift the priorities within the capitalist system, positioning sustainability as a primary and non-negotiable objective, rather than continuing the unrestrained exploitation of natural resources for profit. And as part of these efforts, it means fostering a balanced dialogue that acknowledges past injustices, including the dispossession of Indigenous lands, and seeks to respect both communities and the environment moving forward.”
How to do this in Canada? One way is through collaborative work to extend philanthropic dollars. Another is to work more closely with intermediaries who direct the funds into grassroots and community-led climate action. An example of this in the United States is The Solutions Project, created in 2013 with the contributions of many funders and now largely funding women of colour-led frontline organizations working on climate justice. In Canada, we have the opportunity to fund many organizations working with Indigenous communities directly on climate solutions, such as Nature United, MakeWay, and the NWT Project Finance for Permanence. Philanthropy can fund research and policy on the development of natural climate solutions, in many cases stewarded by Indigenous and rural communities across Canada. We also have funder platforms working on climate solutions at the grassroots such as Small Change Fund, and funders supporting young environmental activists through The Starfish Canada, and AquaAction. Environment Funders Canada is supporting the Building Power for Climate and Nature Collaborative for funders interested in prioritizing equitable engagement, empowering grassroots, and strategic grant-making.
These are just some ways in which Canadian funders are beginning to come together to support “people and democracy” in the effort to act on the climate crisis. The Climate Champions are telling us that even more is needed. Philanthropists must ask themselves the searching question of how to apply those dollars? What is Canadian philanthropy’s best role and use in this crisis? The answer may be to weigh even more heavily the funds towards actions that empower people and communities.
I often get insights from the blogs written by the ever-thoughtful Phil Buchanan of the Center for Effective Philanthropy (CEP). Phil’s most recent blog reflects on two difficult questions for philanthropy in these polarized times. How to defend and nurture democracy? How to bridge differences of opinion? He swiftly notes that he doesn’t have answers. But he has thoughts, which sparked some of my own.
The two questions are related. And while we are not going through a heated federal election campaign in Canada as is happening in the US, some of the same concerns may arise when we do. As Phil points out, democracy is not simply about having a safe and accessible voting experience, it is about feeling empowered as a well-informed citizen to have a voice and to be free to express a view. In a democracy, citizens should be able to engage in debate with others who don’t share the same views. At the same time, people need to believe that debate will not be overtaken by extremist viewpoints, or that productive discussion will become impossible because it is not based on agreed facts or premises.
Phil believes that donors or funders should care about protecting the space within which democratic debate can take place. He isn’t prescribing how that might happen. But he raises an interesting choice for funders around “when to bridge or when to fight”. By this he means when to try to understand or perhaps persuade, and when to oppose or forcefully counter what is simply wrong. He notes “on the one hand, we won’t make any progress if we just engage with those with whom we already agree — as so many do. But, on the other hand, we don’t want to normalize extremism by platforming or legitimating it. So how do we get it right?”
It's an important question, and not an easy choice. But it assumes that funders are considering it in the first place. And that funders are willing to act as, or to fund, bridgers and battlers. For many Canadian charitable funders, the response to this is to “stay out of it”. This means not just staying out of public debate but not even convening or holding space for debate, let alone funding the capacity of others to engage in debate. Only a small number of Canadian foundations make public statements about policy questions; fund policy advocacy work by charities; convene public discussions on policy issues; fund public interest journalism, or policy movements/coalitions/networks advocating on behalf of an issue or group of charities.
Why the reticence, at this moment when it seems so important to counter the negative statements and untruths of social media, and to encourage active and positive citizen participation?
There could be several reasons. Are Canadian charities and foundations still inhibited by government regulation that discourages what used to be described as “political” activities? Is policy work not part of a philanthropic mission? Is it not credible or too risky for foundations to fund advocacy efforts or to support democratic infrastructure such as public interest media? Do foundations lack resources or expertise or tools to convene or contribute opinions? Foundations have suggested all or any of the above.
On the question of whether government rules inhibit charities from engaging in public policy related activities, we know that the rules were made significantly less constraining in 2018 when the federal government changed the Income Tax Act, removed a reference to “political” activities and replaced it with the term “public policy dialogue and development” activities which can be counted as activities in pursuit of a charitable purpose. Yet it seems that this has not changed the behaviour of many charities. The Charity Insights Canada Project at Carleton University has surveyed charity leaders to understand how they are adapting to the new rules. As summarized by Prof Susan Phillips and Dr. Kim Nguyen in a recent article reporting on the results of the survey, “most Canadian charities do not engage in advocacy and there has been little change in the five years since the regulations were relaxed.”
According to the survey, many charities (and their funders) do not think that policy dialogue and advocacy are relevant to their missions. Many don’t have the time or expertise to engage directly. The rule change has not been sufficient to stimulate more engagement. Phillips and Nguyen conclude that “the organizational, funding and sector environments in which charities operate implicitly shape strategic decisions to avoid policy participation… For all the talk about trust-based philanthropy, funders, including governments, foundations and individual donors, spark fears that being activist will result in lost support. The lack of coordination and collaboration by the sector itself further inhibits policy engagement. The charitable sector could help itself by sharing information about charities’ policy concerns and facilitating stronger networks and coalitions.” Here is a real opportunity surely for foundations to have an impact on more effective citizen participation in democratic dialogues. It would be empowering and powerful to fund networks and coalitions to engage in evidence-based dialogues, to represent communities in discussions with policy makers and to engage with the public through media of all kinds. Bridging, and sometimes battling, as Phil Buchanan has put it, could be important philanthropic contributions to increase the vibrancy of democracy in Canada. And charitable funders could lead the way in de-risking and modeling these activities for other charities. Worth a conversation at the next board meeting, regardless of the electoral calendar or outcomes!
As the calendar turns to September, we inevitably think more about learning, whether we are long past formal education or still engaged with it. We are prompted to it at this time of year by media commentary on school access, new tech for learning and the challenges of keeping student attention in the digital age. Much of this is about individual learning. But what about organizational learning?
In the philanthropy world, learning doesn’t have a September start. It should be year-round. In my experience, most learning activity by foundation people (board and staff) remains informal. This isn’t a criticism. It’s true that and important that learning happens in various ways beyond the formal – personal conversations with colleagues, conversations with community partners, attendance at conferences, collective discussions with experts of one kind or another. However, in a philanthropic organization, formal learning is often associated or directly coupled with evaluation. And that is mostly done at arms-length. Surveys are prepared, reports are requested, data is supplied to funders by the organizations receiving their funds. All this input serves the purposes of accountability and governance. It is necessary. But it may or may not translate into learning. It answers the question: what did we do? But not always the question: what can we do better?
The British consulting and research organization IVAR puts learning at the heart of its work with foundations, suggesting that learning is a driving force for foundation strategy and practice. As IVAR notes, “learning is not an add-on – it’s integral and essential… Making good grants and investing in learning are not alternatives. They go hand in hand.”
If this is true, why do so many foundations seem reluctant to be more structured in their approach to learning? Part of the reason may be that they don’t see it as a practice that needs to be formalized in the same way as grants management, budgeting and board governance. Part of it may have to do with not having enough resources (people or time). Part of it may simply be that it is difficult to do.
But foundation board members and staff are uniquely primed to want to explore the question: how can we do better? Not just how can we become more efficient…but how can we become more effective, have more impact on the social issues and problems that we care about? It may be difficult at the beginning. Learning does take time. But it can be consciously shaped. It’s a conversation that can be built into every board agenda, and every staff discussion. It’s not something to do only once a year but as often as the opportunity can be created. IVAR has helpfully supplied tips for foundations on building a learning agenda.
Learning can also become a crucial element in building relationships between funders and community partners. This ties into the increasing interest among foundations in engaging in “trust-based granting”. Many of the changes in funding practice that funders have made since 2020 – streamlining applications, reducing reporting requirements, covering more operating costs, extending grants over more than one year – have been designed to help organizations supported by foundations to do their work more effectively. If they are more effective, foundations are more effective. Learning as a practice can help both funders and their partners in this regard. But how do you engage in trust-based learning, without adding burden on both sides?
British philanthropic funders have some advice to offer us. IVAR has been running a funder roundtable on evaluation for some time. Members of this group and the broader group of funders working with IVAR have been particularly interested in practicing what they call open and trusting grantmaking. Since learning is a key strategic practice, several of these funders are collectively discussing what it would look like to practice trust-based learning. In a 2023 report, IVAR researchers defined trust-based learning as “a learning process that sees charities and funders as equal partners in building collective wisdom for more effective and equitable social change.”
Sharing insights in a blog post in January this year, IVAR researcher Houda Davis suggested four actions that funders could take to bring trust-based learning to life:
The IVAR funders have many helpful comments and tips to share based on their experience. They don’t minimize the obstacles. But they suggest that thinking hard and being willing to commit to equitable learning practices does offer real value by adding to the capacity and effectiveness of the organizations on the ground as well as the funders themselves. “Rather than learning practices that serve the needs of individual funders – often at the expense (literally) of grant recipients – trust-based learning aims to reposition charities and funders as partners who learn alongside each other in service of achieving shared goals.”
With this encouragement, September can be a return to learning for philanthropy too.
One of the stranger (to me) developments in philanthropy circles in 2024 has been the fierce debate about trust versus strategy, applied to funder approaches. Perhaps for the sake of argument, trust has been described as an alternative to strategy, as if the two were quite separate. This is a distinction made in a much-discussed recent article by Mark Kramer and Steve Phillips with the eye-catching title Where Strategic Philanthropy Went Wrong. But I don’t actually think the article is about weighing the merits of trust versus strategy.
In my recent blog I reflected on the suggestion made by Kramer and Phillips that the best role for philanthropy is to stay away from grand strategy and focus more on trusting and empowering people and communities to solve their own challenges. This is valid advice. But does it mean that trust-based philanthropy is therefore “better than” strategic philanthropy? The proponents of a trust-based approach feel strongly about the importance of removing conditions and restrictions. The proponents of a strategic approach believe that it is important to set goals and to measure progress. Both can be true and important. I think Kramer and Phillips would not disagree with that. But the contrasts between these approaches have been exaggerated for effect both in this article and in other public debates about the role of philanthropy.
Some have talked about this difference as being essentially about power: keeping it or shifting it. Adopters of trust-based funding are said to want to share the power that money gives them. So-called strategic philanthropists are assumed to want to keep the power to make decisions about how and to whom they allocate their money. Kramer and Phillips introduce power (and who holds it) as an element of their suggested “new” approach to philanthropy by describing it as “empowerment” philanthropy. In their view, “philanthropists need not come up with the answers to other people’s problems but should merely help empower people to improve their own lives as they choose.” They think that this way of thinking is “at odds with many of our current philanthropic and nonprofit practices”, implying that we must discard these practices if we as philanthropists want to truly make a difference in people’s lives. But while many foundations are indeed rethinking practices such as onerous written grant applications, single year funding and restricted program dollars, I am not persuaded by Kramer and Phillips’s insinuation that donors must throw out their own interest in setting goals or thinking strategically.
Phil Buchanan of the Center for Effective Philanthropy reacted with some exasperation in his recent blog to the tendency of commentators such as Kramer and Phillips to “invent” new roles and approaches for funders. Buchanan says bluntly that “there are no silver bullets when it comes to the practice of philanthropy. It’s complicated and goal- and context-dependent. It requires humility. That’s why I find simplistic takes on philanthropy that suggest that there is one, new, superior way so unhelpful.” He suggests, as do others, that Kramer and Phillips are setting up strategic philanthropy as a “straw man” so that they can contrast it with their proposed empowerment philanthropy. I agree. This is what many in the debate between strategic and trust-based approaches do. They maintain that the foundation world is privileged and without the lived experience necessary to solve social problems or to come up with innovative solutions. But this should not mean that strategy gets thrown out with the bathwater. As Buchanan concludes, and I strongly concur, “I’d agree with the article that empowering those closest to issues and problems to chart solutions can be an effective approach to making progress toward certain goals, and probably isn’t common enough... But these observations shouldn’t be positioned in opposition to strategy; recognition of these realities can be, in fact, essential elements of a good strategy”.
Rhodri Davies, the UK-based philanthropy commentator, has weighed in at length on the trust versus strategy debate with his article Why Isn’t All Philanthropy Trust-based Philanthropy?. For those interested in a historical perspective, Davies describes how so-called strategic philanthropy evolved as an effort to rationalize and formalize the informally generous practice of philanthropy as charity. I think it is important to remember, as Davies reminds us, that the push to become more strategic has been an effort to increase the impact and effectiveness of philanthropy without losing the individual impulse to generosity that is at its heart. He acknowledges the push back on strategic philanthropy that has become most obvious since 2020 with the actions of major donors such as Mackenzie Scott and Melinda French Gates, as well as a newer generation of wealth inheritors who are publicly espousing a philanthropy that is much less donor-directed and much more trust or participation-based. Their commitment to social justice and equity is an important driver of this shift.
The value of Davies’s article is that he is much more nuanced than Kramer and Phillips in assessing the opportunities and challenges of a more trust-based approach. It can’t be a one-sized fits all way of thinking, as Buchanan also notes. It is dependent on context and the goals of both philanthropic and community partners. I think one of the key points made by Davies and others is that philanthropic strategies are highly dependent on relationships. Trust is an aspect and outcome of relationship. Effective strategy also arises from strong working relationships. It is difficult to divorce either element from relations between and among funders and partners. So, to my mind the “trust versus strategy” dispute is a bit of a provocative red herring. The better question for a foundation to ask itself, I think, is how can we deepen our relationships with our partners, to gain their trust and to build better strategies that will help us achieve our mutual goals?
Note: I wrote a blog in 2022 on the challenges of practising trust-based philanthropy which offers some useful tools to funders.