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

Imagine this: A nonprofit organization dedicated to promoting sustainable agriculture in low-income areas has just secured a major grant from a foundation (aka, impact funder).

While the relationship starts strong and mutually beneficial, it degrades over time. The dynamic changes from passionately collaborating on a shared mission to meeting compliance benchmarks and monitoring progress. The exchange feels impersonal, rigid, and paperwork-focused rather than a collaborative effort to boost the nonprofit's long-term success.

The result? The two organizations don’t click. They part ways at the end of the grant term, neither achieving the fulfilling impact that they expected.

This situation is why many organizations are seeking a shift toward trust-based philanthropy, a framework that allows them to embrace collaborative, relational connections rather than transactional ones. In this guide, we'll walk through everything you need to know about trust-based philanthropy:

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

Making positive changes to the power dynamics between impact funders, nonprofits, and the communities is worth the collaborative effort. Read on to learn how you can do your part to champion trust-based philanthropy! 

FAQs About Trust-Based Philanthropy

What is trust-based philanthropy?

Trust-based philanthropy is an approach in which impact funders and nonprofits work to overcome the normal power imbalances in philanthropy to build long-term, healthy, equitable relationships with each other and their broader communities.

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

Who are the major players in trust-based philanthropy?

To set the foundation, let’s highlight the major players in conversations about trust-based philanthropy:

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:

• Shift power dynamics. Trust-based philanthropy intentionally puts funders and nonprofits on equal footing, acknowledging the expertise of nonprofit leaders and transferring decision-making power to those closest to the issues.
• Reduce administrative burden. Simplifying applications, reporting, and granting processes (like moving to multi-year, trust-based unrestricted funding) allows nonprofits to spend less time on bureaucracy and more time on their mission.
• 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.
• Build stronger, more authentic relationships. Transparency, mutual accountability, and honest communication between funder and grantee lead to deeper partnership and better outcomes.
• Promote equity. Trust-based philanthropy is inherently focused on equity by supporting grassroots organizations, those led by and serving marginalized communities, and those working on systemic change.

You can think of funder/nonprofit relationships and trust-based philanthropy in this framework:

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 all of its 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.

What trust-based philanthropy principles should we follow?

At UpMetrics, we're committed to promoting trust-based philanthropy as we help both impact funders and nonprofits measure and report their impact.

We align ourselves with the principles 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:

• Give multi-year, unrestricted funding. This gives nonprofits the flexibility to access funds when they need them most, allows for immediate action and innovation, and encourages sustainability.

• Do the homework. Funders should take on the responsibility of getting to know the nonprofits seeking their support.

• 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.

• Be transparent and responsive. Prioritize open, honest, vulnerable, and transparent conversations to build trust and mutual accountability in your funder-nonprofit relationships.

• Solicit and act on feedback. Empower nonprofits and their communities to provide feedback and be clear on the next steps you plan to take.

• Offer support beyond the check. Impact funders should offer additional non-monetary support to help nonprofits boost organizational leadership and capacity.

How do data and technology support trust-based philanthropy?

Whether you're an impact funder or nonprofits, measuring your impact is one of the best ways to embrace trust-based philanthropy and lay the groundwork for relationships founded on transparency, dialogue, collaboration, and learning.

Sharing data is essential for trust-based philanthropy. Agreed-upon goals and metrics create a shared language between funders and nonprofits that encourages open, honest, and non-judgmental conversations, followed by collaborative action to improve long-term outcomes. Here's a snapshot of the steps to take to measure and manage impact successfully:

• Create an Impact Framework. An Impact Framework is a tool that helps organizations think about impact as something they can measure. At UpMetrics, we recommend building your Impact Framework by considering your organization's long-term mission in terms of dimensions of impact, then setting clear objectives under those dimensions and defining the metrics you'll use to measure your progress toward your objectives.

• Consider the data you'll need. Use both quantitative and qualitative data to measure progress toward your organization's impact objectives. Plan out how you'll use both types of data to tell your organization's impact story.

• Collect data. Identify where your current data lives and collect additional data as needed. This may involve sending surveys to beneficiaries to collect impact stories or using the reporting and analytics features in a marketing platform to gather more conversion rate data.

• 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. This is much easier to do with a dedicated impact reporting platform.

• 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.

Technology plays a key role in successfully measuring your organization’s impact. In particular, a dedicated impact reporting platform like UpMetrics allows you to:

• Easily create an Impact Framework using customizable templates.
• Create 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 its needs.

Best Practices for Championing Trust-Based Philanthropy

For trust-based philanthropy to work, everyone in the philanthropic relationship—impact funders, nonprofits, and their broader communities—must be actively involved in creating more equitable relationships. Here are the best practices for each party involved:

Impact Funders

• Offer unrestricted, flexible, multi-year grants. According to the Trust-Based Philanthropy Project, multi-year grants usually range from 2-10 years, with most falling in the 3-5 year range. You can shift your grantmaking practices over time, gradually increasing grant timelines. You can also offer one-year grants for new grantees to build a relationship before extending more funding.
• Focus on building long-term, supportive relationships with impact creators. One of the best ways to demonstrate your long-term investment in the organizations you support is to offer capacity-building support. This might involve providing training, technical assistance, or strategic growth guidance to help an organization improve its infrastructure and effectiveness.
• Prioritize open communication. Move beyond quarterly emails and reports to engaging in regular check-ins and discussions with the nonprofits you support. Learn about their strengths and challenges, and celebrate milestones together. Regular discussions are also a great opportunity to co-create solutions to challenges.

Nonprofits

• 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 transparent and communicative from the get-go. Let them know about your long-term vision for your 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 the impact of funders' dollars and strategic guidance. Working off of 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! Ask investors or grantmakers to attend events, volunteer, or participate in key meetings.

The Broader Community

• Share impact stories with nonprofits. Success stories paint a fuller picture than metrics do alone. Embrace opportunities to share how a nonprofit's services or a for-profit organization's impact initiatives have made a difference in your life or the community you live in. These insights will be invaluable as nonprofits demonstrate their effectiveness to impact funders.
• Stay engaged in nonprofits' work. Funding increases an organization's capacity to achieve its impact goals, but organizations still need on-the-ground support to make their goals a reality. Continue attending events, volunteering, or buying products or services from these organizations.
• Provide nonprofits with honest feedback. Be candid with the organizations in your community about how they're doing, highlighting bright spots and areas for improvement. This allows nonprofits to stay accountable and increase their effectiveness over time.

Examples of Trust-Based Philanthropy in Action

It's easy to talk about adopting a trust-based philanthropy mindset in practice. But what does it look like for impact funders and nonprofits to transition from transactional to collaborative relationships in real life?

Let's explore some examples of trust-based philanthropy in practice by exploring the UpMetrics Cohort program! This initiative allows funders and nonprofits 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 nonprofits
• 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

Top-down, imbalanced relationships between impact funders and nonprofits have long been the norm in philanthropy. But there is a better way forward: trust-based philanthropy. Use this guide to begin adopting trust-based philanthropy principles at your organization, and remember that measuring and communicating impact is key to creating more equitable and productive long-term relationships.

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

• The Ultimate Beginner's Guide to Nonprofit Storytelling
• The Impact Investing Guide That Every Investor Needs
• How to Measure Social Impact Like a Pro: A Full Guide
• Social Returns on Investment (SROI): A Guide to Measurement