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Have you noticed funders talking differently about their grants lately? Terms like “unrestricted giving,” “holistic support,” and “eliminating administrative burdens” are popping up in grant guidelines.

What does it all mean?

As a nonprofit professional, you know that the current funding landscape is uncertain, the way you describe your work is crucial, and connecting with potential funders is more important than ever. In the midst of this challenging moment, many funders are fundamentally shifting their strategy from rigid, top-down grantmaking to something more collaborative: trust-based philanthropy.

So, what is trust-based philanthropy? We’ll take a deeper dive in a moment, but a good working definition to begin is a grantmaking approach that prioritizes equity, collaboration, transparency, and reduced power imbalances through unrestricted, multi-year grants and fewer administrative hurdles.

Trust-based philanthropy is more than just a buzzword—it’s reshaping how nonprofits and funders work together. Let’s unpack what this means for nonprofits, and how you can leverage it to strengthen your mission and deepen your impact.

Trust is Trending

Although the concept of trust-based philanthropy has been around for some time, recent years (and challenges) have seen a rise in its adoption. The COVID-19 pandemic revealed how urgently nonprofits need flexibility and control in their funding so they can act in ways that are intuitive, effective, and truly impactful. Equity and justice movements have also pushed funders to recognize and work to correct power imbalances in traditional philanthropy.

Across the sector, administrative burdens are a growing concern, as nonprofits are increasingly spending disproportionate amounts of time on compliance instead of service delivery. These shifts in understanding have led to a rise in trust-based practices. A 2024 survey of over 500 grantmakers by the Trust-Based Philanthropy Project found that almost two-thirds had shifted their evaluation methods to be more streamlined and trust-based.

Some key features of trust-based philanthropy include:

• Multi-year, unrestricted grants that allow nonprofits to be nimble and reallocate resources as needed.
• Streamlined applications and reporting that free up staff to focus on mission rather than paperwork.
• Putting the onus of responsibility on funders to vet nonprofit organizations.
• Open communication and genuine relationship-building.
• Holistic support beyond grant dollars, like networking, mentorships, advocacy, or capacity-building opportunities.

A few recent examples of this approach in action include Starbucks’ multi-year, flexible funding partnership with The Global FoodBanking Network and MacKenzie Scott’s unrestricted funding through Yield Giving.

The model is designed to reduce barriers, strengthen organizations, and ultimately deliver deeper community impact. At its core, trust-based philanthropy is about sharing power between funders and nonprofits.

Benefits (and Critique) of the Trust-Based Approach

Proponents of trust-based philanthropy present a compelling vision of flexibility, stability, and true collaboration. When nonprofits have the stability of multi-year, unrestricted funding, they can pivot quickly in a crisis or when new information indicates a priority shift. They’re not locked into rigid deliverables and have the freedom to innovate and adapt their plan as needed.

“Unrestricted support for organizations is strategic because the need to pivot is the norm rather than the exception. Our world is dynamic, and nonprofits don’t have a crystal ball. Unrestricted funding acknowledges the reality that organizations also need to be dynamic and empowers leaders to make decisions that drive impact.”

– Stacey Faella and Ryan Roberson, Stanford Social Innovation Review

Multi-year funding also improves long-term planning and financial stability. When they’re not constantly chasing funding, nonprofits can focus on their mission and long-term planning. This opens the door for deeper, more authentic and collaborative funder relationships. When there’s a foundation of trust in a nonprofit’s work, it can create an honest space for discussion and problem-solving over challenges, rather than pressuring nonprofits to only share successes.

While trust-based philanthropy offers nonprofits greater flexibility and less oversight, it’s not without criticism. Skeptics argue that loosening reporting requirements can reduce accountability and make it harder to measure impact, while relying heavily on trust and relationships may unintentionally reinforce bias and favoritism or perpetuate underperforming organizations. Some funders also worry that unrestricted funding could be misused, spent inefficiently, or fail to align with a donor’s mission and priorities.

Another argument is that trust-based philanthropy isn’t suitable for every nonprofit or funder. For example, organizations that are new, unproven, or in high-risk contexts may require more structured oversight. And in a funder landscape that is constantly shifting, the rise of trust-based philanthropy may force nonprofits to spend precious time retooling their language to fit yet another set of expectations.

“Can trust really be built within the parameters of a time-bound grant that restricts grantee work and creates the potential for a funding cliff when the dollars stop coming?”

– Clare Gibson Nangle and Marianne Møllmann, The Chronicle of Philanthropy

Even MacKenzie Scott’s unrestricted, flexible grants were not without some criticism. While the funding met some requirements of trust-based philanthropy, it ultimately fell short in establishing long-term funder-grantee collaboration.

In short, the criticisms of trust-based philanthropy focus on accountability, equitable funding, and funder comfort with risk. Meanwhile, supporters of trust-based philanthropy argue that nonprofits should be able to spend less time proving their worth to funders and more time on their mission. And many funders are embracing the idea that trust and accountability need not be incompatible.

Grant Writing Tips for Nonprofits

Whether or not your nonprofit is actively seeking out funders that employ a Trust-Based approach, the movement is gaining momentum. Is your grant language ready? Here are a few tips for adapting your grant writing to fit a trust-based philanthropy lens:

• Embrace transparency. Trust is built on honesty. By sharing both successes and challenges, you’ll show funders that your organization can learn and adapt.
• Highlight community voice. Showing how your work is shaped by the people you serve and centering their perspective is key. Trust-based philanthropy emphasizes sharing power, and funders want to see nonprofits doing the work in their own organizations.
• Focus on long-term impact and vision. Instead of rigid project deliverables, elaborate on how your mission, values, and strategic goals will lead to greater impact.
• Tell a story of collaboration and trust. Show funders you’re a true partner by indicating your openness to their feedback and your willingness to adapt.
• Keep it simple and human centered. Use narratives, stories, and human examples that demonstrate your real-life impact alongside any data.

Trust-based philanthropy represents a shift away from rigid, compliance-driven writing and focuses instead on authentic, community-centered language that reflects the movement’s core values.

Trust is Here to Stay

Trust-based philanthropy is reshaping how resources flow into communities.

While it may not be the right fit for every nonprofit or funder, trust-based philanthropy offers a compelling alternative to compliance-driven funding. For nonprofits willing to adapt, this shift represents an opportunity to rethink grant writing, embrace authentic storytelling, and consider what a truly collaborative funder-grantee partnership could look like.

The constantly changing funder landscape can be daunting. But by centering on honesty, community voice, and long-term impact, nonprofits have a real opportunity to embrace these changes with creativity, resilience, and purpose.

Ready for the next step?

If you’re curious about working with Trust-Based funders but don’t know where to begin, Three Notch’d Nonprofit Solutions would love to partner with you. We can help you identify funders utilizing Trust-Based practices, shift reporting and impact narratives to new expectations, and provide coaching on relationship-based fundraising strategies.

You have a story to tell. Let’s position your mission for the greatest impact so you can focus on what really matters—your mission.