‘Trust-based philanthropy was the leading theme’ 

Philanthropy Australia was delighted to host a New Gen Study Tour to New York in June 2023. Participants held forums with the Ford Foundation, United Nations Foundation and the Global Impact Investing Network, among other global leaders in the space. In the first of a series of articles reflecting on an unforgettable four days, Rachel Findlay, Director, Impact and Engagement for NSW and ACT, outlines the top take-aways for funders. 

Bella Conyngham and myself are grateful to have shared this incredible experience with 13 participants working in the for-purpose space, both funders and individuals working in not-for-profits (NFPs). The following reflections are the top trends we saw in relation to funding.

1. Trust-based philanthropy 

Undoubtedly the leading theme throughout our trip was the move towards trust-based philanthropy, where funders aim to remove the power dynamic between themselves and their partners. Trust-based philanthropy seeks to share and hand over power traditionally held by funders through having open, honest and valuable relationships with their fundees. 

A few examples of how trust-based philanthropy has been implemented are: 

• Unrestricted, multi-year funding: Longer-term support is critical as it enables organisations to have breathing space and removes the pressure to keep finding funding. It also enables deeper relationships leading to more honest conversations. Feedback from the organisations we met that provide unrestricted funding was that they find this very rewarding as they are not just funding a programme, they are funding a whole organisation to not only survive but thrive. 

• Easing reporting requirements: Funders can reduce the reporting burden on partners by, for example, asking organisations for the best report they have produced in the last six months or for a phone-call report where a transcript can be saved. Alternatively, focus on asking only three key questions:  

• What have you have learned? 

• What are the outcomes you are pursuing? 
• How do you know you are getting them? 

“The true value of reports lie not in their volume or complexity, but in the level of trust and relationships they help to build between partners. By asking for concise and meaningful information through just key questions or existing reports, funders can understand and support the work of their non-profit partners more deeply.”  

– Antony Bugg-Levine, Head of Regulatory and Government Partnerships at Lafayette Square 

• Grant agreements: Encourage a move away from complicated legal documents and move instead towards loosening grant restrictions. Often funders are in compliance mode when developing grant agreements because it is initially lawyers drafting grant agreements. This is not necessary and creates an additional burden for the fundee in understanding complex legal documents.  

2. Participatory grantmaking 

Participatory grantmaking is another example of trust-based philanthropy. Participatory grantmaking is the practice of ceding grantmaking power to affected community members and constituencies and engaging them in decisions about where their grants go. Examples of this include youth advisory committees that screen and review applications or grants committee made up of the communities the funders seek to support.  

Philanthropy Australia recently held a webinar with the Centre for Evidence and Implementation on participatory grantmaking – which you can view here. 

3. Diversity, Equity and Inclusion 

Diversity equity and inclusion (DEI) was a huge theme of the tour. Developing strategy around this is done by examining who and what foundations support and the composition of teams and boards to ensure greater diversity of race, age and gender. Some foundations have used DEI consultants to help review their processes to ensure they are equitable. Foundations staff are spending more time getting out into their communities to speak to leaders to increase their understanding of the needs in communities. Operational changes include opening up grant application processes so that new audiences can apply, rather than not accepting unsolicited applications. Foundation staff members have also started helping organisations to fill in grant application forms to enable greater support for organisations applying for the first time. Increasing work is being done in the US to track demographic data on NFPs.  

“Demographic data collection – when done in a trust-based, values-aligned way – can be a helpful factor in spotlighting gaps and opportunities in grantmaking”.  

Supriya Kumar, Global Partnerships Research Manager, Candid 

4. Impact Investing 

In common with many Australian foundations, there is a move towards foundations using their corpus for good, with the aim of a 100% of the corpus being impact invested. Increasingly, foundations are finding that their financial returns are maintained when making investments for social good.  

Philanthropy Australia and leading foundations have recently launched a peer network on impact investing.  

5. Capacity building 

Many of the foundations we met provide support beyond funding. Some examples include: 

• Grantee knowledge-sharing sessions enabling grantees to help each other and group problem-solve common challenges. Grantees can also share challenges and how they overcame them. Grantees are also encouraged to share who else is funding them at these sessions. 
• Training sessions for grantees, or access to external facilitators and experts who can provide advice when needed.  
• “Pizza and beer money”: Often innovation is unplanned – you have to have the right people in the room and the right space for trust and respect to foster new ideas. One funder provides “pizza and beer money” to bring people together socially so they can build their networks to activate their community beyond their existing relationships and structures.  

6. Transparency 

One of the perceptions of American philanthropy is the more open culture of talking about giving, and this was reflected on the study tour.  Candid a have a Foundation Directory that details the funding of all foundations and the grants they have made (this date is collected from the Internal Revenue Service). This enables people to see who else is funding in the same space so that they can learn and collaborate. Many US foundations’ websites detail their grantmaking strategies and grants. There is an opportunity for Australian foundations to open their books and share more about what they are doing. 
 
Network event

The trip left us with lots of inspiring ideas about global philanthropic best practice, so we’re excited to share these insights with the broader community in Australia. 

New Gen Network members are invited to join us for an event focused on lessons in progressive philanthropy and impact investing from the study tour, where we will hear from New York City-based expert Antony Bugg-Levine.  

New Gen Network: Global Lessons in Progressive Philanthropy and Impact Investing 

Thursday 10 August, 10.30am 

Hybrid: Sydney and Zoom 

Register