How to Turn Trust-Based Philanthropy from an Idea into a Viable Approach

Sponsored by SmartSimple

Fundamentally, trust-based philanthropy is about knocking down barriers and bringing balance to the inequities built into funder-nonprofit relationships. If we’re talking about adjusting existing structures, trust is about minimizing administrative burdens for grantseekers

For many grantmakers, a trust-based approach involves streamlining requirements around everything from application intake to the post-award grantor/grantee relationship. Many don’t have the structures or processes in place to support this.

Fortunately, there are tactics that are supported by technology that can be implemented to help ease the transition to a trust-based approach.

Tracking grantee engagements outside of the standard grant

Taking a holistic process to building relationships with grantees is a critical element to any trust-based strategy. There are aspects lost through a standardized grant application process that can be fundamental to building a full trusting partnership with a grantee. That’s why an effective trust-based strategy will track grantee engagements outside of the standard grant application.

Flexible grants management platforms have the functionality to track activities that may lie outside of the pre-defined grant application process. This can include consultations, training and community engagement. At the far end of the flexibility spectrum lies SmartSimple Cloud, a platform that can track any type of engagement through its Relationship Manager.

Supporting multiyear operating grants

Multiyear operating grants can be one of the most impactful parts of a trust-based giving strategy. Fundamentally, they are an investment in a grantee’s mission, and signifies a commitment to partnership, rather than one-off funding arrangements.

Logistically, multiyear operating grants also help get grantees off the perpetual hamster wheel of applying for new funding annually. The time and resource savings from this can be substantial.

But for grantmakers, multiyear operating grants can present a unique challenge. Grantmakers need robust reporting that can be tailored to the unique relationship the grantee has with their funder.

If supported by a flexible, configuration-based grants management system, grantmakers have more options to work collaboratively with grantees to determine reasonable reporting obligations that work for both sides.

What’s more, they’re also able to capture data from a variety of nontraditional formats. Flexible grants management platforms have the functionality to collect data from multiple reporting formats.

Shifting to a trust-based approach is about simplification

Data collection is often the source of administrative bloat, and repetition that can burden grantees. The same question may be asked multiple times over because various stakeholders involved in the grant process have different access to data sources.

Thankfully, configuration-based grants management platforms can provide grantmakers with the flexibility to streamline data collection, simplifying key steps in the grants application process.

Reduce applicant burden from the outset. Working with a grants management platform that has the flexibility to manage different intake form types enables you to tailor how you’ll initially collect the data you need to do high-level screening.

This is an important, initial step that can help determine whether the potential grant applicant should spend their time and valuable resources going through the application process.

A flexible grants management platform will give you the ability to tailor your intake forms to your exact requirement thereby eliminating erroneous steps and questions that may increase administration time for the grant applicant.

Leverage third-party verification services. In practice, the idea of trust-based philanthropy isn’t to lower due diligence standards. Rather, it’s more about shifting the power imbalance to center by placing the responsibility of due diligence on the grantmaker, not the grantee. Trust is, after all, a two-way street.

Practically speaking, doing so also alleviates the burden placed on the shoulders of the grant applicant. Preparing, collecting and submitting mountains of background documents is time consuming and a heavy administrative lift.

Having a grants management platform that integrates with third-party vetting services like Candid Guidestar can significantly cut down administrative burden for both grantmakers and grantseekers. Data can be pulled directly into the grants management system, prepopulating fields and eliminating the extra work of keying in data manually.

Most nonprofits will have updated profiles complete with their full history and background in many of these vetting databases. This means grantmakers may also get a more complete picture of the grantseeker, eliminating the need to ask additional background questions in the application.

Simplify application forms. Simplifying the grant application form itself can greatly reduce the amount of effort and administration needed for both grantmakers and grant applicants.

An easy, practical solution would be to hide certain fields and sections to pare down the volume of questions grantseekers need to answer. Another would be to leverage branching logic, which would allow grantseekers to skip certain questions and change the line of questioning based on their responses in previous questions.

But form design can be complex, especially if your grants management platform isn’t flexible enough to allow for deeper levels of personalization.

Configuration-based grants management platforms eliminate the need to hand-code from the back-end of your system. Hand-coding is a messy, technical process that doesn’t easily allow you to make changes nor scale your forms down the road.

Configuration-based grants management platforms, on the other hand, enable you to make any changes you need directly in the native system settings, eliminating any back end work needed that may have to be done by your technical staff.

Taking your first steps toward implementing a trust-based strategy

Trust-based philanthropy is a journey. For many, a productive step forward will be to reevaluate the nature of their relationship with grantseekers. That may require  looking at how processes need to change and whether your grants management system is flexible enough to support it.