Seven Insights on Organizational Change for Trust-Based Philanthropy

3/14/2023

By Andrew Spector, Co-Founder and Program Director, Tulsa Changemakers

As co-founder, program director, and lead fundraiser of a nonprofit organization, I became fascinated by the level of trust between nonprofits, foundations, and beneficiaries. Why don’t many nonprofits trust beneficiaries more or at least enough to listen to them? Why don’t many foundations trust nonprofits more, and vice versa? What could all parties do to build and deepen trust with each other? How is this lack of trust limiting philanthropic impact?

These questions led me to earn an M.A. in Philanthropic Studies at Indiana University’s Lilly Family School of Philanthropy where, as my part of my degree, I conducted seven in-depth interviews with staff from foundations across the United States. These foundations were selected because they were identified by me or someone else as a foundation that had successfully worked towards organizational culture, structures, practices, and leadership that achieves higher impact partnerships with grantees. In other words, these foundations had become more trust-based. The primary purpose of the interviews was to reveal “the how” of foundations becoming more trust-based.

What can seven interviews of seven foundations tell us? Surprisingly, seven insights emerged that might be useful in helping your foundation to become more trust-based.

1. Listen actively to drive the change.

Clear structures and pathways for feedback from grantees are invaluable for making changes to grantmaking practices. Structures discussed in the interviews include the Center for Effective Philanthropy’s Grantee Perception Report, foundations’ own anonymous surveys, focus groups (which typically compensate grantees for their time), and one-on-one conversations (informal and formal). Pathways to elevate and incorporate grantee feedback included informal conversations among staff, intentional space at staff meetings, and intentional space at board meetings.

It's important to note that feedback from grantees doesn’t always have to be direct feedback to your organization. This could put your staff or board on the defensive and your grantees might fear complete candor. One foundation Executive Director shared that they surveyed grantees for what they saw as best practices in grantmaking, instead of asking for direct feedback to their foundation. Then, this ED shared direct quotes from the survey with the foundation board.

A unique example of a structure and pathway was one foundation’s sabbatical program for nonprofit directors, which the foundation’s president described as a key moment in their organization’s history. Because staff facilitated the sabbatical program and the board was invited to sessions, the program brought their staff and board into closer proximity and partnership with grantees. The president attributes the launch of other key grant programs to their learnings from the relationships built from this sabbatical program.

2. Be patient and start small, “evolution over revolution.”

Change can and often should take time. Start with small, easy to achieve changes, learn from them, communicate successes and challenges, and move forward.

One foundation Executive Director shared that their foundation experimented with multi-year general operating first with just one funding portfolio. Staff and board found that they loved the outcomes: higher impact on fewer organizations, deeper relationships with grantees, and less to read in preparation for board meetings. That ED reflected:

“I realized that in change management it’s easier to get people to change towards something than to change away from something. So, if I give them [the Board] something to go towards and they taste it and say, ‘you know this, I like it,’ that’s a lot easier of a rationale than ‘don’t do this, do this, trust me’ – they needed to experience it first.”

A foundation president shared their strategy for adding non-family members to their foundation’s board. First, the president researched the value of this and presented it to their board. The board was unconvinced, so the president suggested that they pilot having two non-family members without voting power. After a year, the two non-family members gave the feedback that it was weird not having voting power but being at all the meetings. The president shared this feedback with the board, and the board had been so pleased with the value of the input of the non-family members that they immediately decided to allow them voting power. Today, this foundation has three non-family members on its board with voting power.

A Senior Director at a foundation shared a story of unsuccessful change. An individual was hired with the expectation that they would facilitate change across the organization. This individual complained from the beginning about how slow change was happening. They left after five years with limited success and after having turned over most of their team’s staff.

3. “Hire empathy.”

Jessamyn Shams-Lau, Jane Leu, and Vu Le, authors of Unicorns Unite: How Nonprofits & Foundations Can Build EPIC Partnerships, advise foundations to “hire empathy” as a strategy for increasing trust, respect, and empathy. They write: “If you lack first-hand experience in building and running the types of organizations that your foundation supports, then hire staff that can fill those knowledge gaps for you.”

Interviewees that had previously worked as nonprofit Executive Directors cited this previous work experience as key to their success in designing and implementing trust-based grantmaking practices. One Director reflected:

“Now that I’m on this side of it I’m never going to put someone through or make them have that same harmful experience that I used to have [as a grantseeker].”

Two Black female interviewees described the value of sharing a racial background with grantees or populations served. They both explained that this can help them build relationships and even function as an accountability structure because they are more likely to be in community with people from their racial background.

An interesting trend from the interviews was that two of the seven foundations had a staff member who is also a board member and a family member. This embedded empathy within their organization because this person is proximate to board, staff, and grantee perspectives.

4. Align internal and external changes.

While external grantmaking practices (e.g., give multi-year unrestricted funding, simplify & streamline paperwork) are typically the central focus of trust-based philanthropy, these practices are bolstered by internal culture, structures, and leadership that embody trust (the importance of aligning internal and external changes is already written about in the Trust-Based Philanthropy Project’s “Trust-Based Philanthropy in 4D,” but it’s important to note based on how frequently it showed up in my interviews).

First, interviewees shared that internal changes will likely follow external ones. Remember, be patient and start small. There’s value to seeing the results of a trust-based lens externally before taking the time to adjust things internally.

External changes are about how staff and board relate to grantees and community. Internal changes are about staff-staff relations, ED-staff, board-ED, and board-staff.

One example of aligning internal and external changes came from a foundation director who had previous experience as a nonprofit ED and was hired to develop trust-based grantmaking practices and oversee grantmaking. They shared that early on in their role their presentations and recommendations were met with a criticality from the board that reflected a lack of trust and didn’t honor the hours of due diligence they had devoted for each potential grantee. This director noticed this lack of alignment between their foundation’s external trust-based practices and their internal practices, spoke about it at the next board meeting, and hasn’t had an issue with it since.

The same Director spoke about staff-staff relations and ED-staff relations at their foundation. Their ED communicates trust in staff by focusing their time on legal matters and leaving grantmaking to the grantmaking staff. The staff builds trust with each other through a non-hierarchical structure that includes collective decision-making.

One Executive Director shared a powerful reflection question they asked a fellow staff member that would be valuable for any staff or board to use as they work on trust internally: Who do you trust most in your life and why? Do you spot any themes across any identity categories?

5. Organize and advocate.

If you’re at a foundation that is more hesitant to consider trust-based changes, but you’re all in, get strategic. Four strategies that emerged from the interviews were 1) learn about and leverage the history of your organization, 2) listen deeply to the values, motivations, and pain points of the board and staff, 3) power map, and 4) influence from all angles.

First, the history of your organization might reveal a tradition that is aligned with innovation or relationships. Speak to that history in your advocacy. Your history might also reveal a founding in exploitation and a tradition of discrimination. Today is an opportunity to right those wrongs.

Second, it’s possible that trust-based changes are aligned with the values of board and staff, and they just need to be framed that way. Or, perhaps, pain points for staff and board include reading long applications and feeling guilty for not reading reports, so shifts to these processes is something they would welcome. If your board or staff aren’t yet clear on their values, identify and define them. Then, ask yourselves, are we living up to these values? One ED did this with their board and described the process this way:

“How do we operationalize how we want to see ourselves? How do we be more aligned with how we want to be? I’m just strengthening how they [the board] want to see themselves.”

Third, find allies at your organization, strategize with them, identify whose power and influence is needed to achieve which objectives, figure out how to influence them, and make moves. Leverage your deep listening of values, motivations, and pain points. One Executive Director gave the example of working to replace their Board Chair, knowing the Board Chair wouldn’t give up their power easily. Through deep listening and empathy, they realized that the Board Chair would be willing to give up their power if they truly trusted the replacement and their qualifications. This ED reflected: “It was like organizing. I need to organize this woman out of this role but if I antagonize her and treat her like a target she’ll clutch and hoard power.”

Fourth, change can come from all levels of the organization. Find your allies at each level of the organization and seek influence from many sources. Some ideas are to bring in outside speakers for staff and board, read books together, have staff and board discussions, go to conferences, bring in consultants, have one-on-one conversations, and put together proposals for superiors. Specifically, if you’re an ED or board member, especially at a large organization, set clear expectations and create systems, structures, and incentives.

6. Consider tracking indicators of trust.

If you value it, measure it. Do your grantees trust you? Do they think you trust them? You can find out through the Center for Effective Philanthropy’s Grantee Perception Report, your own survey, focus groups, or qualitative reflections from one-on-one conversations with grantees. How well are you building relationships? Two interviewees shared that their organization tracks trust by using Salesforce to track their interactions with any nonprofit professional. This gives them a clearer picture of their networks and insight into how well they’re nurturing relationships.

7. Stay positive and focus on the long-term.

Efforts to become more trust-based will not be effective if you approach change purely from a moral perspective. Although you might perceive new practices as right and current structures as wrong, a moralistic approach will prevent you from engaging intellectually with the process of implementing changes. The Director from the foundation who shared the story about the employee who left after five years because change wasn’t happening fast enough admonished that it was critical to understand that these changes likely make someone else’s job harder, at least in the short term. Sometimes negative reactions to trust-based ideas are more a fear of change and uncertainty about how to make the change than a rejection of the ideas themselves.

Multiple interviewees talked about a “mourning” following trust-based changes. Changes can lead to a sunsetting of grants, which can be hard for the people at your organization, especially if there’s a deep relationship there. Moreover, this can be hard for the grantees. If you’re going to sunset their grant, do it in a way that deepens trust. Explain why, give them warning time, and consider more than a year’s notice.

The easy part of becoming more trust-based is describing what it means to be trust-based. The hard part is effectively getting there. Every organization is unique and operates in a unique context, and to achieve long-lasting change it can require a high degree of listening, collaboration, and thoughtfulness. The reward, however, is worth it. By constructing high-trust partnerships between foundations and nonprofits, the philanthropic sector can drive even more impact.

Andrew Spector is co-founder and program director of Tulsa Changemakers, a program of Leadership Tulsa that builds capacity in youth, adults, and systems to support youth in driving positive impact in Tulsa right now and into the future.