The conversation about the need for transformation in the practices of philanthropy continues across the philanthropy field. We hear about the what and the how of change. But we don’t hear as much about the reasons why change is so difficult. These often have to do with some of the built-in tensions and need for choices in philanthropic approaches.
In my July blog post, Transforming Philanthropy Step by Step, I highlighted the Philanthropy Transformation Initiative from WINGS, the global philanthropy network. Discussing the need for transformation, a group of experienced funders under the umbrella of WINGS contemplate what they call the “paradoxes” of philanthropy. Is philanthropy a solution to society’s challenges, or is it part of the problem? Does philanthropy, by its very nature, reflect the existing systems and structures that have allowed wealth and power to be created, and therefore stand in the way of transforming those systems?
These paradoxes are framed largely around the question of power. The WINGS funders and others suggest that foundations transform themselves by adopting practices that will shift the power, whether through more transparency, more local funding, more partnerships with others or simply more shared decision-making.
But power and what to do with it is not the only dilemma for funders to consider. Of course, money is power. And so, power may be the most prominent dimension of philanthropy. But there are other dimensions such as time and scale that are on the minds of many funders. In considering how best to achieve impact, thoughtful foundation boards and leaders consider choices such as:
These choices are well described in a recent article in Alliance magazine by Anna Hirsch-Holland of the UK-based The Partnering Initiative. She points out that “the transformation agenda” for foundations is more complex and difficult to navigate than implied by WINGS’s set of transformation principles. Much of this turns on how foundations can transform the power imbalance between themselves and grantees or partners.
WINGS and others have called for more long-term, flexible funding to more locally-led actors, and to more actors representing marginalized communities. Hirsh-Holland notes that this can be in tension with a foundation’s ambition for addressing underlying causes rather than symptoms, for greater impact. This can be translated as seeking systems change. And to truly achieve that, key actors in a system need an aligned approach.
As Hirsh-Holland explains (and I quote her at length for those who don’t subscribe to Alliance), “If funder and grantee alike truly want to work together to enable systems change they need to form a trusted partnership: agreeing on shared objectives, with shared accountability for achieving those by combining and integrating complementary resources. This can be at odds with the implicit (or sometime explicit) idea in trust-based funding practices that the grantee knows what is best, and the funder should leave them alone to get on with it. Instead, it requires finding a way to work together that builds trust.”
“In fact, systems change also needs more than a collaborative approach between funder and grantee. It requires multiple stakeholders to be ready to work with others…combining and aligning their resources in pursuit of transformational change. This is why many funders are also recognising their important role in convening and encouraging collaboration between their grantee partners and other key stakeholders.” But, as Hirsh-Holland points out, “this can be a delicate matter as donor-driven collaboration can be another way in which funders embed an unhealthy power dynamic with and among their grantees.”
She also draws attention to the tension between the “trust-based approach” that calls for minimal reporting requirements and the need for funders and partners to know what progress is being made towards systems change or to collect evidence that an approach is working. She suggests that many foundations are finding ways around this tension by “focussing on learning rather than proof and seeking to make this a collaborative effort with their partners”. But the demand for evidence can prevent funders from achieving their ambition to shift power to community organizations with limited capacity for reporting and evidence collection.
One more tension identified by Hirsh-Holland is that between the drive to partner more locally and the trend towards “big-bet, top down philanthropy”, particularly in the area of climate change work. If foundations are partnering with private investor partners to catalyze more capital for the energy transition, profit can supersede justice goals. To deal with this tension, foundations can be those actors that “build critical bridges between the profit-driven motivations of the private sector, the social goals of governments, and the justice goals of civil society actors.”
Hirsh-Holland provides a nuanced way to think through at least some of the tensions inherent in an attempt to juggle more trust-based or more locally-driven and equitable approaches with the ambition of achieving greater impact over time. She suggests her own questions to apply, along with the tips and ideas from WINGS:
Tension is often associated with stress. But tension is not inherently bad. It simply forces more concentration. Philanthropy with impact is not for the faint-hearted. Nor can it be part-time. It requires much thought and care. Luckily, funders such as the group behind the Philanthropy Transformation Initiative and the Partnering Initiative are sharing the questions and ideas that will help along the path to making good philanthropic choices.
One of the big debates swirling around in philanthropy today is the debate about trust. Can trust really exist between funders and the organizations they fund, given the power imbalances, the different communities that funders and grantees come from, the different operating models of grantmakers and operating charities? This matters a good deal to funders who are considering trust-based philanthropy as a strategy. There are mixed views on what constitutes trust-based philanthropy. For funders, does it mean giving funds unconditionally and standing back from organizations because funders trust them to know how best to deploy them? For organizations, does it mean simplified funding application and accountability practices that build trust in the funder with whom they are in relationship? Does trust imply standing back or getting closer?
Charles Keidan, the editor of Alliance the global philanthropy magazine, wrote a recent column on trust-based philanthropy and its critics. He evaluates the arguments for practicing trust-based philanthropy and the arguments of funders who are uneasy about this approach. One of the worries of funders in a trust-based approach is how to retain accountability for using their funds responsibly and effectively. But as Keidan and others have pointed out, the underlying question is more about power and privilege than it is about trust. Keidan makes an important suggestion: “A good question to ask of critics of trust-based philanthropy is how willing they are to invite scrutiny of their own power – how their wealth was made, who sits on the boards, how they invest their assets and yes, how well they respect, partner and trust their grantees.” How are their own practices engendering trust?
We need to think more about what trust feels like in practice. Who has to trust who? And on what is trust based? The German philanthropy think tank Maecenata Foundation has been thinking about trust for a while. Through their Philanthropy.Insight project, they have developed a framework that helps a funder with some penetrating questions about what constitutes trust. They have called it the Philanthropy.Insight Assessment Tool (PIAT). This tool is conceptually based on two elements of trust: trust in intention and trust in competence. It’s an interesting distinction. Both elements of trust matter if funders and recipients of funds are to trust each other. And both funder and recipient can demonstrate these elements.
The PIAT identifies five separate principles that must be considered together to establish or to assess “trustworthiness”. To develop trust in intention, there must be evidence of Commitment, Public Purpose and Relevance (which represent the emotional side of trust). To develop trust in commitment, there must be evidence of Performance and Accountability (the more practical side of trust). The PIAT has created a list of diagnostic questions for funders to ask themselves in each one of these five areas to assess trustworthiness. These questions are ones that funders can use to think about the levels of trust within their organizations (intra-organization), among their funder peers (inter-organization) and across sectors (inter-sectoral) in relations with grantees, governments and other players in a philanthropic system.
If we use this framework to think about trust, we realize that it is much more complicated than the notion that earning trust or giving trust is simply a matter of shifting where power lies. It is more a matter of shifting practice. The developers of the PIAT, Dr Rolf Alter, Rupert Graf Strachwitz and Timo Unger, suggest that it offers an “invitation to philanthropic funders to apply the trust lens to their current strategies and programs so that they can ultimately become better at what they are doing.” In thinking deeply about their practice and being prepared to ask questions and to change, they will begin to earn the trust of staff and board members, partners and collaborators. Whether institutional philanthropy is ready for this or not in Canada is a relevant question. There is evidence of interest and of changing practice. As an example, the Lucie et Andre Chagnon Foundation in Quebec has been working on rebuilding trust with the community sector over the last five years and has been asking itself many of the questions outlined in the Philanthropy.Insight method. Other Canadian foundations are working on different aspects of the trust pentagon described by Maecenata. But it is challenging work. In Europe, Maecenata has ruefully paused its project because it was not able to rally enough participants and supporters among funders to test its approach and create a peer exchange platform. However, it has shared publicly all its analysis and thinking about trust-based philanthropy in an effort to keep the conversation going. Perhaps this is a basis for more Canadian philanthropic peer exchange and hard thinking about what trust means in philanthropy today?