Trust-Based Philanthropy: A Nonprofit Leader’s Guide to Asking and Reporting

A multi-step grant application takes 10 to 20 hours of a nonprofit’s time, according to the Trust-Based Philanthropy Project’s guide 5 Myths of Conventional Philanthropy. Simpler applications are one of the changes trust-based philanthropy asks of funders, and the Project’s own FAQ says its effort is “predominantly focused on engaging and activating funders.” This guide is for the other side of the table: the executive director whose program officer has started saying “trust-based” and who wants to know what changes on their side.

What Is Trust-Based Philanthropy?

Trust-based philanthropy is a set of values and grantmaking practices published by the Trust-Based Philanthropy Project, which has offered tools to grantmakers since 2020. On a practical level, the Project’s 2022 guide says, it means multiyear unrestricted giving, simpler applications and reporting, and relationships built on transparency, dialogue and mutual learning.

The Project traces its own start to people in your seat. “When nonprofit leaders said, ‘share power and trust us,’” it writes, “we responded by founding the Trust-Based Philanthropy Project.”

The practices are only part of it. The Project’s overview of trust-based philanthropy describes four dimensions of a funder’s work (culture, structures, leadership and practices) and says trust “is not the end goal.” Its stated north star is funders and nonprofits working with a shared sense of accountability to the communities they serve.

What Are the Six Trust-Based Principles?

The six principles of trust-based philanthropy, which the Project calls grantmaking practices, are: give multiyear unrestricted funding, do the homework, simplify and streamline paperwork, be transparent and responsive, solicit and act on feedback, and offer support beyond the check. Each one changes something concrete about how you apply, report and talk to a funder.

The middle column summarizes the Project’s six grantmaking practices page and its 2022 six practices guide. The right-hand column is our suggestion for each practice.

Read the right-hand column as questions you can ask. A funder that has adopted a practice should be able to say how it works there.

How Do You Ask for General Operating Support?

Ask for the whole organization. Describe what the money keeps running, from staff and rent to systems and the executive director’s time, and what you expect to change over the grant term. Then ask how long the funder can commit. The Project’s guide says multiyear grants run 2 to 10 years, most often 3 to 5.

The Project’s 5 Myths guide says restricted grants keep organizations from using the money for “everyday operating costs, such as office rent or non-project-related staff.” With a funder that claims the practice, make the organization-wide case: what the money keeps running and what it lets you change.

The six practices guide adds that some funders begin a new relationship with a one-year unrestricted grant. If that is the offer, ask what a renewal would depend on.

• The full cost of the work. Include the people and systems behind your programs. Our guide to what capacity building looks like in practice covers the areas a request often leaves out.
• The term. Name the number of years and why.
• What you will report and how. Propose the format before the grant agreement fixes it.

Some foundations also offer capacity building grants for nonprofits, which fund an organization’s own infrastructure. Each sets its own eligible uses, so read the guidelines first.

How Should You Report to a Trust-Based Funder?

Report in the format the funder has agreed to, and help it ask less. The Project’s comparison with conventional grantmaking trades extensive reports, often several a year, for simpler and alternative reporting options, and trades funder-defined metrics for nonprofit-defined indicators of success. Often the report is a conversation.

The six practices guide tells funders to ask only questions they cannot answer themselves and need to know, to drop jargon such as “theory of change” and “scalability,” and to use meetings, phone calls or video “in lieu of applications and reports.” If your funder offers a call in place of a written report, take it, and prepare the way you would for a board meeting:

• What changed since you last spoke, in the measures you chose.
• What you learned, including what did not work.
• What got harder, whether staffing, demand or cash flow.
• What would help, in money or in support beyond the check.

The 5 Myths guide also states that the IRS requires “virtually no documentation for grant recipients” and that “for general operating support, there is no legal requirement for financial reports.” That is the Project’s reading, offered here as background and not as legal advice. Your funder’s own policies still apply, so ask what it requires and why.

How Do You Ask for Leadership Support?

Ask for it by name, as support beyond the check. The Project’s Support Beyond the Check guide tells funders to “provide coaching, mentorship, or professional development opportunities” and to offer “paid access to opt-in trainings and leadership development.” It also says any such support should be optional and should not affect funding.

CNPC does not track how clients pay for coaching, but our application forms show a pattern: leaders mention an employer budget, a board decision or, at small organizations, their own money. Grant funding has not come up in the applications we have reviewed.

Framing matters. Coaching for an executive director is often treated as a fix for a problem, a reading that keeps capable leaders from asking. The Project’s wording works better: support that bolsters leadership, capacity and organizational health. For the stakes, see the burnout statistics for executive directors.

The professional development line is the most accessible source, because most nonprofits already have one, and a professional development budget can name leadership coaching outright. Capacity-building grants come next, and some funders offer grants that cover staff professional development. Our guide to leadership development grants covers sources and proposal language. The six practices guide also lists access to professional services, the kind of technical assistance for grantees some funders arrange.

CNPC’s volunteer coaches donate their time, which is why six sessions of executive coaching cost $300, $400 or $600 depending on operating budget, 85%+ below market rate. The scope is bounded. Over six sessions a leader works on patterns, such as how they delegate and how they communicate with the board, while staffing gaps and budget shortfalls need other help.

What If a Funder Only Uses the Label?

Ask which of the six practices it has adopted and how each one works there. The Project’s FAQ says being trust-based depends on how a funder embodies values such as humility, transparency and collaboration, more than on a count of practices. It also asks nonprofit leaders to report funders who are “trustwashing.”

The Project is not a grantmaker and says it cannot introduce nonprofits to funders. Its suggestion for nonprofit leaders: ask your funders whether they have heard of trust-based philanthropy and point them to its website.

Invitation-only funding is harder for organizations outside a funder’s network. The six practices guide says there is no consensus on open versus invitation-only processes, and asks funders that do not accept unsolicited proposals to explain how they find grantees. If you are outside the circle, that explanation is your opening question.

Trust-based is a claim a funder makes about itself. The six practices are how you check it.

Where Does Your Board Fit In?

A trust-based funder may work with your board as well as with you. The Project’s support guide lists help with grantees’ board development, such as working through board priorities and introducing prospective board members. Its comparison with conventional grantmaking also calls for mutual accountability, and on your side the board holds final accountability for the organization.

Start with the chair. Our guide to the board chair’s role with the executive director covers how the two work together. Board development covers recruiting and growing members, and the governance practices boards can adopt show funders how decisions get made. A board self-assessment shows where to begin. When the board changes, tell your funders: board announcement templates, welcoming a new board member and telling funders about a new executive director cover the common cases.

Boards often decide whether leadership support gets funded. When coaching for the executive director is framed as a personal benefit, boards tend to treat it as discretionary. Framed as continuity for the organization, it becomes a governance question. CNPC reads the board’s duty of care to include making sure the executive director has the resources to succeed.

What Should You Do Before a Funder Meeting?

Write three sentences before your next funder call: what the money will keep running, how you would like to report, and what support beyond the check would help most. Then ask the funder which of the six practices it uses. The answers show how much of the relationship you can shape.

If leadership support is on your list, CNPC coaches leaders of 501(c)(3) nonprofits, government agencies and analogous non-U.S. entities, and only nonprofit leaders. When you are ready, apply for coaching. Funders who want to underwrite coaching for nonprofit leaders can give through our donation page.

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