How Trust-Based Philanthropy Removes Barriers Around Grant Applications

The relationship between nonprofits and funders is historically steeped in inequity and power imbalance. Perhaps that’s an inevitable outcome when one party controls the purse strings, and the other depends on charitable donations. 

This imbalance leads to funder-grantee relationships that feel more transactional than collaborative. In exchange for grant dollars, nonprofits are often compelled to align their work with a funder’s theory of change, logic model, preferred metrics and reporting standards. Oftentimes, grant dollars are given prescriptively with specific allocations for programs, operations and quantifiable outcomes.

Complicating matters, traditional grantmaking practices are burdensome and filled with steps that require nonprofits to provide extensive documentation and evidence that they are a safe bet. Grantmakers attempt to reduce risk through lengthy online forms, data collection and onerous progress reports.

In short, the playing field is tilted to support funders.

But recently, things have begun to change. The COVID-19 crisis ushered in a newfound sense of urgency to distribute grant awards quickly and with fewer strings attached. And a growing consciousness for racial and social equity has many grantmakers examining the fairness of their relationships and work processes.

Trust-based philanthropy burst onto the scene as an ethos that many grantmakers have begun to embrace. A set of guidelines and principles, the trust-based movement aims to rebalance power through stronger relationships, collaboration and mutual accountability.

In this people-centered approach to greater equity, software and data can play a critical role in helping funders adopt trust-based philanthropy. Technology is not a panacea, but it provides a mechanism for funders to reflect important changes in their journey toward building a trust-based approach.

Starting With Intention

Change must start internally, with a broad and intentional examination of practices, policies and relationships. Technology can be a vital tool in helping an organization take a more empathic approach toward understanding how grantmaking practices stand in the way of trust.

John Brothers, president of the T. Rowe Price Foundation, often visits social services offices to watch service delivery. On one occasion, he completed an application for emergency assistance — 28 pages long and filled with demeaning questions about the applicant’s flaws and needs. The application contained no questions seeking to learn the applicant’s strengths or values.

“The process made me feel small, and I know it makes someone filling out that application for social services feel small,” Brothers said.

The simple act of walking a mile in an applicant’s shoes is powerful.

As Brothers discovered, grant applications are often excessively long and filled with questions that focus on collecting data in ways that are insensitive or demeaning, exacerbating the power dynamic. 

Shaady Salehi, executive director of the Trust Based Philanthropy Project, further emphasized how intentionality can lead to a better overall experience for nonprofits, especially for those that have less experience navigating conventional structures of fundraising and philanthropy. 

“Being intentional means putting yourself in the shoes of those who are going through the grantmaking experience,” Salehi said. “Technology can be a really useful tool for building trust and making grantmaking more equitable and accessible for users with different backgrounds, for example by including language accessibility options or accepting video testimonials in lieu of written responses.” 

Perhaps the most important role of technology in adopting trust-based philanthropy is its ability to capture data about the user experience to identify areas that may perpetuate grantee burden, inequity and power imbalance. For example, there may be certain sections of an application that require a disproportionate amount of time to complete, or sections that are consistently left blank. This can be an opportunity to get curious about why these patterns occur and how they may be streamlined to better support the user experience.

Simplify and Streamline

For many foundations working to reduce inequities, simplifying and streamlining paperwork is a common starting point for trust-based grantmaking. Salehi cautioned against assuming that streamlining will automatically make a foundation trust-based, though she believes it can be a highly effective step to address inequities, especially for smaller nonprofits and those led by people of color.

“Streamlining is a key part of trust-based philanthropy because there are a tremendous number of hurdles that burdensome applications and reporting create for nonprofits,” Salehi said. “From an equity standpoint, it disproportionately affects organizations that may not have the staff or experience required to fulfill lengthy proposal and reporting requirements."

Salehi pointed out that some leaders may be more effective articulating their vision verbally rather than in written form. Others may be working on issues so urgent that they simply don't have enough time in their week to fill out long applications — especially when the funding isn't guaranteed.

As funders move with intentionality toward trust-based and equitable funding practices, grant management software is a critical tool for simplifying and streamlining applications, progress reports and other hurdles that create administrative burden for applicants.

Grant software is the lifeblood of foundations. It’s a centralized home to grant forms, workflow processes, CRM data, grantee reports and essential information about an organization’s grants, funding and impact. The Trust Based Philanthropy Project’s "2023 Grantmaker Survey Report" states that of all actions taken to adopt trust-based practices, 90% of respondents have streamlined applications and/or reporting processes.

But streamlining and simplification is more than just rewriting applications to be shorter in length. 

1. Accessibility

A modern grant management system can promote trust-based philanthropy by starting with an applicant-first user experience that accommodates people with a range of abilities, disabilities and experiences. Such systems promote transparency about their accessibility conformance through the use of a voluntary product accessibility template. 

2. Applicant-Friendly Design

Additionally, they are constructed with a human-centered design approach emphasizing the needs of applicants. GrantAdvisor’s grassroots #fixtheform movement articulates grant management system expectations, such as the ability to see a complete grant form without hidden questions and the option of saving progress throughout the application process. 

3. Data Input Reduction

Regardless of form size, a grant management system can minimize the amount of data an applicant must provide, especially when that data already exists somewhere else. Automated connections to data repositories, such as Candid or Impala can populate forms with commonly requested data like a nonprofit’s mission, operating budget, staff and board of directors, demographic profiles, contacts and more.

Other data can be incorporated directly from a nonprofit’s website, an IRS Form 990 or the IRS master file. Eliminating the work of data re-entry is a crucial step toward minimizing administrative burden for grantseekers.

Trust-based grantmakers may extend this concept by agreeing to accept applications and data that have already been produced for another funder, or are otherwise not in their preferred format. Grant systems should allow applicants to submit data, forms and applications in any format in which it already exists. 

4. Video Responses

As new trends like video-based applications and verbal progress reporting emerge, grantmakers can eliminate written forms altogether in place of recorded videos, Zoom files or Gong recordings.

5. Digital Payment Options

Another key facet of streamlining is finding ways to distribute grant dollars more quickly and efficiently. Throughout the pandemic, grantmakers increased their adoption of paperless payments (opens as a pdf) to help expedite access to capital. Many funders made the shift to eliminate paper checks in support of digital payments and funds distribution. Some grant systems now support digital grant payments either through their own payment rails or by partnering with organizations like Paypal and Stripe.

Doing the Homework

A vital practice of trust-based philanthropy is doing the homework, or taking on some of the work that is typically asked of nonprofits.

Grantmakers often put the onus on nonprofits to provide data on their work, mission and impact during the getting-to-know-you phase of the relationship. In essence, they’re asking nonprofits to provide the information used to do the vetting and assessing of a potential new partner.

This trust-based practice aims to share power with the grantee by “reducing the burdens and stress on nonprofits, while also demonstrating respect for their time.” Software and data can play a central role in enabling funders to do this homework and minimize the administrative burden on nonprofits.

Grant software can compile information from multiple sources to aid in this homework. Often called an organizational profile, a modern grant platform can aggregate some of the essential data about practically any nonprofit using its IRS Form 990, information from charity profilers, and data that is already publicly available on their website. And with the emergence of artificial intelligence tools, researching potential grantees is becoming increasingly simpler and faster.

Making the Shift With (and Without) Technology

Becoming a trust-based grantmaker is a journey that can benefit from, but is not driven by, technology. It’s an important distinction to make, given that trust and power-sharing are the outcomes of relationships, not software. However, software and data can play a significant role in advancing those relationships.

Ultimately, the goal is to deliver funding to people and organizations in a way that promotes systemic equity, redistributes power and centers relationships. Grant management software intersects with several trust-based grantmaking practices, like simplifying, streamlining, doing the homework, soliciting and acting on feedback, and being transparent and responsive.

But this work takes thoughtful consideration, and starts with intentionality to center people and relationships first. Reducing questions in an online application may be an easy place to start, but in reality it is a better place to end.

The preceding post was provided by an individual unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of NonProfit PRO.