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.
January rolls around once more and we try to make sense of the year behind and the year ahead. Last year, I avoided predictions, as did others, given the turbulence of our world. Instead, I listed some hopes and fears for 2023. It turned out to be a roller coaster year, with more downs than ups. Both the hopes and the fears were relevant and relatively accurate. As we move into 2024, which I expect to be no less of a roller coaster, I would like to venture some hopes but also reiterate some fears for foundations and philanthropy.
Before I get to that, I want to frame my thinking, as I did last year, around the nature of effective foundation philanthropy, which I see as an act of relationship. Not just a handover but an exchange. Not all about control but about combining resources. In this frame, both funder and “doer” (a description I like better than grantee or fund recipient) bring their value (and values) to each other in an ongoing relationship. The challenge of this is that it takes communication skills and accountability responsibilities.
In late 2022, Phil Buchanan of the Centre for Effective Philanthropy (CEP) expressed this view of philanthropy as relationship in a long public essay about big changes and big questions for philanthropy which is still very much worth reading. Commenting on what he and I and others see as the false binary of strategic versus trust-based philanthropy, he noted that “thoughtful donors and foundations reject the notion that there need be a dichotomy between strategy, assessment, evidence, and learning on the one hand and trust, listening and flexible support on the other. They recognize that trust develops over time. They embrace mutual accountability. They realize that, while the knowledge and expertise of those closest to issues should be respected, foundation staff and donors do often possess useful knowledge, too.”
Buchanan was addressing the debate that is very much on in the foundation world around the pressure to shift to “trust-based” philanthropy, or flexible giving, or unconditional funding, such as that practiced most famously by the American philanthropist MacKenzie Scott. She has been giving unsolicited and unconditional large gifts to nonprofits for several years, in an ultimate act of trust. Buchanan’s organization is studying the impact of Scott’s giving, which has up to now resulted in over US$ 16.5 Billion given to more than 1,900 nonprofit organizations. CEP’s research indicates that “Scott’s unconventional approach, unusual both for the size and unrestricted nature of the gifts, is resulting in dramatically positive effects for both recipient organizations and the work they’re doing.” While convincing on the merits of trusting recipients, this is not a model of relationship philanthropy. Scott herself and her team do not seek ongoing relationships. Her team identify recipient organizations in a quiet and anonymous process, and surprise them with offers of large and unconditional gifts. Her approach requires expertise, evidence and evaluation on the part of her team, but there is no dialogue. It’s not likely to be replicated widely, no matter how positive the outcomes for the recipients.
What is clear is that flexible or unconditional giving still needs to be based on some understanding and support for the goals, leaders and work of the organizations receiving the funds. And this to me suggests that funders, if they want to be effective, must move into closer relationships with partners, cede some control and develop the trust needed to work together. So, why are many funders and recipients resistant? Many reasons are suggested: lack of staff, time or data, desire for discretion, wish to maintain control (on both sides). But if you are interested in making social change, in having an impact on the problems you choose to focus on, you surely also want to be in dialogue, to learn, to share and to develop through greater proximity. And that means talking to the organizations you might count on to implement the strategies you believe will lead to change.
What does it take to become more comfortable in relationship? No easy answer. It takes time, attention, perseverance and yes, trust. If funders want to commit themselves to building relationships in 2024, they could start with some of the questions that Kathy Reich of the Ford Foundation posed in her recent blog Funders and NonProfit Leaders: Can We Talk? Here are some of them:
Some useful questions to begin your board discussions in 2024!
Turning now to this coming year, I hope that…
I fear that…
Let 2024 be a more hopeful than fearful year for everyone.
Since 2020, there has been no hotter topic in institutional philanthropy than the need for change to the traditional or standard model of grantmaking. Across the spectrum, from those who focus on equity and power shifting to those simply interested in greater impact, we hear talk about transforming practices and culture within foundations.
Much talk – but what action? There has certainly been movement in the foundation community towards public commitments to change. Many funders since 2020 have signed pledges to change their practices and to move towards more flexible funding, more support for operating costs, more multi-year grants and fewer reports and evaluations. These changes are advocated most prominently by the movement towards “trust-based philanthropy”. But such changes in practice don’t necessarily lead to the internal deep cultural change that is transformational. The underlying dynamic of funders, to maintain control as a matter of accountability and often as a matter of donor preference, limits more fundamental change.
This is not easy, to say the least. Changing granting practices to respond to a sense of urgency and crisis does not lead to deeper change without committed leadership, an investment of time, and a willingness to examine internal assumptions.
More funders in the United States and Europe are following the external changes in their relationships with grantees with internal changes in their culture, with significant encouragement and learning from their peers. Since 2020, the development of peer networks in philanthropy has created space for exchange and learning on the difficult work of internal change. They are supporting the growth of philanthropic “learning” organizations.
In the United Kingdom, the Open and Trusting Grantmakers community of practice was set up in 2021. It is made up of over 100 funders who have committed to a set of principles and practices aimed at shifting relationships onto a more trusting footing.
In Germany, Trust Creates Impact, a peer network of more than 30 German-speaking foundations form Germany and Switzerland, has been active for over four years.
In the United States, the Trust Based Philanthropy Project was launched in 2020 as a five-year peer-to-peer funder learning initiative. In 2022, the Center for Effective Philanthropy created a 9 month Trust Based Philanthropy Learning Cohort which has already sold out.
Recognizing this trend, Alliance Magazine, the global magazine for philanthropy, devoted part of its March 2023 issue to the theme of Transformation on the Agenda. Introducing this issue, Alliance’s editor, Charles Keidan, notes that “for change to be truly enduring, it’s said that it needs to start from within….Transformation requires a more thoroughgoing shakeup of what we do and how we do it, reconsidering not only how we relate to the rest of society but how we behave and see ourselves.”
These are all indications of the interest that institutional funders are demonstrating in learning about how to drive change from within foundations, with the aim of becoming more effective and more equitable.
In Canada, we have been slower to create a peer learning network for institutional funders although a community of practice focused on philanthropy and equity was started in 2021 by two non-profit fundaisers, Tanya Rumble and Nicole McVan. Some webinars and research publications have been organized by the organized philanthropy networks such as Philanthropic Foundations Canada, specifically on the changes suggested by trust-based philanthropy. But there is less evidence in the funder community of a commitment to a more systematic and internal commitment to learning. One of the lessons of the past three years is that learning is a key to funder internal transformation and to more effective funder strategies. The new peer networks in other parts of the world are focused on learning collectively, overcoming barriers and sharing examples of what works with each other as they move forward.
What do these networks have to share about the key factors in becoming a learning organization?
The peer networks are generous in sharing their resources. Here are links to recent YouTube webinar conversations about transformation and learning in foundations that are worth listening to:
There are also some excellent tools available now that could help to kickstart conversations about internal changes within foundations who want to increase their strategic impact. In my 2022 blog Thinking Hard About Trust I link to the provocative and searching questions for foundation boards and staff provided by the German Maecenata Institute. The Institute for Voluntary Action Research (IVAR) in the United Kingdom has an excellent paper Giving Learning a Seat at the Board Table. The Trust Based Philanthropy Project shares a very good webinar on a trust-based framework for learning and evaluation in philanthropy.
Some Canadian public and private funders are already moving down this path of internal change and learning: Trillium, Vancouver, Chagnon, McConnell, Hallman, United Way/Centraide, some of the arts councils. Perhaps 2023 will see the emergence of a dedicated Canadian funder peer learning network that embraces the idea of internal transformation in philanthropy and puts actions to words about change.
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?