A seismic shift is underway in the world of high-stakes giving, quietly championed by some of the world’s wealthiest individuals like MacKenzie Scott. This movement, known as “trust-based philanthropy,” is dismantling decades-old charitable practices by providing massive, unrestricted grants to non-profits with minimal strings attached. Accelerated by the global pandemic and a renewed focus on social equity, this approach challenges the traditional power dynamic between donors and recipients, aiming to empower community-led organizations by trusting them to know how best to use the funds to achieve their missions.
What is Trust-Based Philanthropy?
At its core, trust-based philanthropy is a model built on partnership rather than oversight. It fundamentally rethinks the relationship between those who have capital and those who are on the front lines of social change. This approach stands in stark contrast to the traditional, more prescriptive form of giving that has dominated the sector for generations.
Traditional philanthropy often involves a burdensome process for non-profits. Organizations spend countless hours completing lengthy grant applications for specific, narrowly defined projects. If successful, they receive funding tied to rigid budgets and are required to submit exhaustive reports detailing their progress against a predetermined set of metrics, a model often called “strategic philanthropy.”
Trust-based philanthropy flips this script. Its practitioners believe that the non-profit leaders closest to the issues are the true experts. Therefore, the goal is to get out of their way and provide the resources they need to succeed, innovate, and thrive over the long term.
The Core Principles
While approaches vary, the movement generally coalesces around several key practices designed to redistribute power and reduce the burden on grantees.
Provide Multi-Year, Unrestricted Funding: This is the cornerstone of the model. Instead of funding a specific program for one year, donors provide general operating support over multiple years. This allows a non-profit to cover essential but often underfunded costs like salaries, rent, technology upgrades, and professional development, providing the stability needed to plan for the future.
Simplify the Paperwork: The lengthy, time-consuming grant applications and reports of traditional philanthropy are replaced with streamlined processes. Donors might accept existing proposals written for other foundations or rely on simple conversations to gather the information they need. The focus shifts from bureaucratic compliance to authentic relationship-building.
Commit to Transparency and Feedback: Trust-based funders aim to be open about their processes and decision-making. Crucially, they actively solicit and act on feedback from their grantee partners, seeking to understand how they can be a better, more supportive funder.
The Forces Driving the Shift
The rise of this new philanthropic model isn’t happening in a vacuum. It is a direct response to growing critiques of traditional giving and has been supercharged by recent global events that laid bare the inefficiencies of the old way of doing business.
The MacKenzie Scott Effect
No single individual has done more to popularize trust-based philanthropy than novelist and philanthropist MacKenzie Scott. Following her 2019 divorce from Amazon founder Jeff Bezos, she has given away more than $16 billion to over 1,900 organizations with unprecedented speed and trust. Her team conducts quiet research to identify high-impact non-profits and then surprises them with large, unrestricted gifts, announced publicly in blog posts.
Scott’s approach—giving away vast sums without requiring applications or detailed reports—sent shockwaves through the philanthropic world. It proved that giving on a massive scale could be done without a large, bureaucratic foundation and demonstrated a profound level of trust in the recipient organizations, setting a powerful new example for other billionaires.
A Reckoning on Social Justice
The global protests following the murder of George Floyd in 2020 cast a harsh light on systemic inequities, including those within the philanthropic sector itself. Studies have consistently shown that organizations led by people of color, particularly Black and Latino leaders, are disproportionately underfunded compared to their white-led counterparts.
Critics argued that traditional philanthropy, with its complex processes and insular networks, often perpetuated these biases. The call grew louder for funders to cede control and directly resource the community-based organizations that were most impacted by racial and social injustice. Trust-based philanthropy offered a direct answer to this call, providing a framework for more equitable distribution of resources.
The COVID-19 Crisis
When the pandemic hit, non-profits were faced with soaring demand for their services while simultaneously grappling with economic uncertainty. The slow, cumbersome nature of traditional grantmaking was suddenly untenable. Organizations needed flexible cash, and they needed it immediately.
In response, hundreds of foundations, including giants like the Ford Foundation, temporarily suspended their usual restrictions and reporting requirements to get money out the door faster. This forced experiment demonstrated the effectiveness of a more trusting, flexible approach. Many funders realized that non-profits not only survived but thrived with this newfound freedom, leading them to adopt these practices permanently.
The Benefits and the Criticisms
While the movement is gaining momentum, it is not without its skeptics. The debate centers on the fundamental question of accountability and the proper role of a donor.
A Lifeline for Non-Profits
For non-profits, the benefits are transformative. Unrestricted, multi-year funding allows them to invest in their infrastructure, retain talented staff, and pivot quickly to meet emerging needs without seeking permission from a funder. It frees up enormous amounts of time previously spent on fundraising and reporting, allowing them to focus entirely on their mission.
As one non-profit leader described it, receiving a trust-based grant felt like “permission to breathe.” It provides the psychological and financial stability necessary for long-term strategic thinking and innovation, rather than forcing a constant, precarious scramble for short-term project funding.
Challenges and Pushback
The primary criticism leveled against trust-based philanthropy revolves around accountability. How can a donor be sure their money is creating a positive impact without rigorous metrics and reporting? Some argue that this approach abdicates the donor’s responsibility to conduct due diligence and measure results, potentially opening the door to inefficiency or misuse of funds.
Proponents counter that traditional reporting is often a performative exercise that doesn’t truly capture an organization’s impact. They argue that trust isn’t blind; it is earned through careful vetting of an organization’s leadership, track record, and financial health upfront. The “accountability” shifts from paperwork to an ongoing relationship, where progress and challenges are discussed openly in candid conversations.
Another challenge is the donor’s own ego. Traditional philanthropy often allows donors to attach their name to a specific building, program, or initiative. Trust-based giving requires a shift in mindset, where the donor finds satisfaction in empowering an organization’s overall mission rather than claiming credit for a slice of it.
Conclusion
Trust-based philanthropy is more than a fleeting trend; it is a fundamental re-evaluation of power, equity, and effectiveness in the social sector. Driven by influential mega-donors and a widespread recognition that the old models are no longer sufficient, it represents a powerful move toward treating non-profit leaders as the experts they are. While debates about accountability will continue, the momentum is undeniable. By placing trust at the center of the equation, this growing movement aims to unlock a higher level of impact, fostering a more resilient, innovative, and equitable non-profit ecosystem capable of tackling society’s most complex challenges.
