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.