Trust-Based Philanthropy: A Guide for Impact-Minded Orgs

Supporting charitable causes is an inherently collaborative process. However, past philanthropic structures have favored funders (foundations and impact investors) over recipients (nonprofits and social good companies), resulting in worthy causes missing out on funding.

Trust-based philanthropy’s role is to balance power dynamics and provide a more equitable experience for everyone involved. This framework allows both funders and social good organizations to embrace collaborative, relational connections rather than transactional ones.

Making positive changes to the power dynamics between impact funders, social good organizations, and the communities is worth the collaborative effort. In this guide, we'll walk through everything you need to know about trust-based philanthropy:

• Trust-Based Philanthropy FAQs
• Best Practices for Championing Trust-Based Philanthropy
• Examples of Trust-Based Philanthropy in Action 

Trust-Based Philanthropy FAQs

What is trust-based philanthropy?

Trust-based philanthropy is an approach in which social impact organizations work to overcome the typical power imbalances in philanthropy, building long-term, healthy, and equitable relationships with one another and their broader communities. Generally, these types of organizations are the major players in conversations about trust-based philanthropy:

• Impact funders are socially-minded impact investors and grantmakers who shift power toward frontline organizations by donating to or investing capital into their missions.
• Social good organizations (e.g., nonprofits and portfolio companies) use trust-based funding to scale impact.
• The wider community comprises the individuals and local populations directly served by these missions, whose lived experiences and insights help guide equitable decision-making and ensure lasting, authentic community change.

We’ll dive deeper into the aspects of trust-based philanthropy later, but at its core, trust-based philanthropy requires:

• Acknowledging existing power imbalances
• Addressing deep-seated inequities at their roots
• Evolving the structures, cultures, and norms within the philanthropic space
• Prioritizing trust, collaboration, and transparency

Why is trust-based philanthropy important?

Trust-based philanthropy is a crucial approach for creating more equitable and effective ways to drive social good. In particular, trust-based philanthropy can:

• Foster innovation and risk-taking. Unrestricted funding gives organizations the flexibility to experiment, adapt to changing needs, and invest in internal capacity, which is essential for long-term effectiveness.
• Reduce administrative burden. Simplifying applications, reporting, and grantmaking processes (such as moving to multi-year, trust-based unrestricted funding) allows nonprofits and portfolio companies to spend less time on administrative, bureaucratic tasks and more time on their mission.
• Shift power dynamics. While some traditional philanthropic partnership structures gave funders more power, trust-based philanthropy intentionally puts funders and social good organizations on equal footing, acknowledging the expertise and transferring decision-making power to those closest to the issues.
• Build stronger, more authentic relationships. Transparency, mutual accountability, and honest communication between funders, recipients, and the community lead to deeper partnerships and better outcomes.
• Promote widespread social change. Trust-based philanthropy is inherently focused on equity by supporting grassroots organizations, those led by and serving marginalized communities, and those working to address systemic change.

When did trust-based philanthropy start? 

Trust-based philanthropy as a formal concept emerged from a San Francisco-based foundation called the Whitman Institute. The goal was to move away from transactional funding models to a more relationship-focused approach to grantmaking.

In 2011, the Whitman Institute decided to adopt a “spend-down” model, meaning that the foundation would spend its entire endowment and close. This novel approach allowed the foundation to move away from an overseer role to a collaborative position, focusing more on funding urgent needs and less on bureaucracy.

Throughout this evolution, the organization adopted six key principles of trust-based philanthropy (more on that later), spent its entire endowment, and closed in 2022.

Now, trust-based philanthropy is a widespread ideology that informs many aspects of the grantmaker/grantee relationship. Several unprecedented social disruptions have amplified the need for trust-based philanthropy, such as the COVID-19 pandemic, the social justice movements, and widespread political polarization.

How does impact measurement support trust-based philanthropy?

Impact measurement is an essential part of trust-based philanthropy that enables social good organizations and funders to communicate effectively. Working with agreed-upon goals and metrics creates a shared language for the relationship, encouraging open, honest, and non-judgmental conversations. Only once you have this foundation can you collaboratively improve long-term outcomes and practice trust-based philanthropy.

Here’s what an impact reporting process that’s aligned with trust-based philanthropy might look like:

• Create an Impact Framework. An Impact Framework is a tool that helps organizations measure their impact more intentionally. At UpMetrics, we recommend building your Impact Framework by considering your organization's long-term mission through the lens of impact dimensions, then setting clear objectives under those dimensions and defining the metrics you'll use to measure progress toward those objectives.
• Consider the data you'll need. Use both quantitative (e.g., numerical outcomes) and qualitative data (e.g., testimonials) to measure progress toward your organization's goals. Combining both of these types of data speaks to your tangible progress while appealing to the emotional side of your cause.
• Collect data. Audit your current data lives and collect additional information as needed. This may involve sending surveys to beneficiaries to collect impact stories or identifying outdated contact information.
• Analyze the data. Look for trends, patterns, and changes in your data that can guide your organization in strengthening its current strategy or making adjustments to be more effective. Pro-tip: This is much easier to do with a dedicated impact reporting platform—more on that later.
• Act on your insights. Using the insights you've gathered, put your strategy changes into play. Once you've taken action, you'll continue the iterative impact measurement and management (IMM) process to monitor impact continually and make further improvements.

What technology do we need for trust-based philanthropy?

Technology plays a key role in successfully measuring your organization’s impact and establishing a strong, trust-based fundraising collaboration. In particular, a dedicated impact reporting platform like UpMetrics allows you to:

• Easily create an Impact Framework using customizable templates.
• Set up mobile-friendly data requests, import data from existing sources, connect with your existing tools, and collect impact narratives to gather all impact data in one place.
• Analyze your impact data in dynamic dashboards and visualize progress over time. Benchmark progress against regional data, industry standards, or past performance and gather useful insights.
• Streamline transparent reporting and decision-making with a two-way portal that allows both impact funders and nonprofits to better understand an organization's effectiveness and needs.

Best Practices for Championing Trust-Based Philanthropy

For trust-based philanthropy to work, everyone in the philanthropic relationship—including impact funders, nonprofits, portfolio companies, and their broader communities—must be actively involved in creating more equitable relationships.

Many social good organizations and impact funders follow the parameters set by the Trust-Based Philanthropy Project, an advocacy initiative focused on making equitable grantmaking and community accountability the standard in philanthropic work. These six core principles are:

1. Give multi-year, unrestricted funding. This gives nonprofits the flexibility to access funds when they need them most, enables immediate action and innovation, and encourages sustainability.
2. Do the homework. Funders should take responsibility for getting to know the issues and nonprofits impacting their communities.
3. Simplify and streamline paperwork. Spending time on applications and reports can distract nonprofits from their important work, so making the process easier allows them to get back to what really matters.
4. Be transparent and responsive. Prioritize open, honest, vulnerable, and transparent conversations to build trust and mutual accountability in your funder-nonprofit relationships.
5. Solicit and act on feedback. Empower nonprofits and their communities to provide feedback and be clear on the next steps you plan to take.
6. Offer support beyond the check. Impact funders should offer additional non-monetary support to help nonprofits boost organizational leadership and capacity.

Other Best Practices

For Funders

• Focus on building long-term, supportive relationships. Trust takes time to develop, so impact funders should be ready to invest in long-term collaborations. For instance, in addition to financial support for a specific initiative, funders might help their organizations’ internal infrastructure by providing training, assisting with operations, or offering strategic growth guidance.
• Prioritize regular communication. Funders need to be in the loop for their fund recipients so they can support them as they change over time. Schedule regular check-ins with the nonprofits and portfolio companies you support. That way, you can learn about their strengths and challenges, and celebrate milestones together.

For Nonprofits and Portfolio Companies

• Express your needs, challenges, and successes transparently. Instead of viewing funders as merely a source of capital, open the door for deeper relationships by being communicative from the start. Let them know about your long-term vision for the organization, the areas in which you need support, and what is going well. This allows funders to support you in more ways than simply writing checks.
• Demonstrate each investment’s impact. Working from goals and metrics you've defined with your funders, track the impact of their financial support and strategic guidance using a robust impact measurement and management (IMM) process. To share this information with funders, create engaging impact reports that include both quantitative and qualitative insights into your organization's progress and accomplishments.
• Engage funders in non-financial ways. You want your funders to be passionate about and involved in your important work. There's no better way to do this than to invite them to get hands-on experience! For instance, you could invite investors and grantmakers to attend events and volunteer.

Examples of Trust-Based Philanthropy in Action

Let's explore some examples of trust-based philanthropy in practice by learning about the UpMetrics Cohort program. This initiative allows funders and social good organizations to leverage the technology and community they need to do more good in their thematic impact areas.

Through the program, foundations or investors (or groups of these funders) create or join a Cohort by sponsoring five or more nonprofit organizations. The UpMetrics team then provides:

• Access to UpMetrics' advanced impact reporting suite for both funders and social good organizations
• Professional setup services to assist participants in creating Impact Frameworks, collecting data, building dashboards, and more
• UpAcademy sessions where participants learn impact reporting best practices
• Quarterly Community Insight Sessions facilitated by the UpMetrics team, where funders and nonprofits discuss impact and progress toward shared goals

Since its creation, our Cohort program has been activated in more than 10 communities across the U.S., serving over 500,000 community members. As of 2025, we have three active Cohorts in Chicago, the San Francisco Bay Area, and Southeast Michigan. Let’s look closer at our Bay Area cohort:

The Bay Area Cohort

This cohort operates in UpMetrics' home base, the San Francisco Bay Area, and all organizations involved are committed to serving children and families in the local community.

Cohort Funders:

• Quest Foundation
• Walther Family Foundation
• O'Brien Family Foundation
• Morgan Family Foundation
• Payne Family Foundation

Grantees:

• The Arc San Francisco
• FACES
• Holy Family Day Home
• R.O.C.K.
• Peer Health Exchange

The Bay Area Cohort participants are focused on the following IMM initiatives:

• Strengthening relationships between nonprofits and funders
• Collaborating and exchanging ideas with fellow changemakers
• Building long-term capacity around data collection and management
• Improving reporting across multiple stakeholder groups
• Defining and communicating stories of impact

Wrapping Up

True trust in philanthropy is anchored in shared metrics, transparent two-way communication, and a mutual commitment to real community outcomes. To turn these principles into standard operating procedure, start by aligning on a co-created Impact Framework, centralizing your reporting data, and ensuring your tech infrastructure has the impact measurement tools you need.

Want to keep reading about impact reporting? Check out these additional resources:

• The Ultimate Beginner's Guide to Nonprofit Storytelling. Discover how to center authentic community voices and replace rigid reporting with compelling narratives that build deeper, trust-based funder relationships.
• The Impact Investing Guide That Every Investor Needs. Impact investing also requires a strong, trust-based foundation to succeed. Learn how modern impact investors are shifting traditional power dynamics to invest in companies that truly empower frontline organizations.
• How to Measure Social Impact Like a Pro: A Full Guide. You can only ensure trust-based philanthropy with effective social impact metrics. Explore how to co-create metrics with your grantees so you can replace top-down compliance audits with shared learning and transparent data.
• Social Returns on Investment (SROI): A Guide to Measurement. Understand how to accurately quantify the holistic, long-term community value generated by unrestricted, trust-based funding.