Sylvain A. Lefèvre: "Should we trust 'trust-based philanthropy'?"

Sylvain A. Lefèvre, professor at the University of Quebec in Montréal, examines this philanthropic model, which places trust and collaboration at the heart of relationships between foundations and the organisations they support.

MacKenzie Scott, the ex-wife of Amazon founder Jeff Bezos, has said that by 2024 she will have donated $2 billion to nearly 200 organisations, mainly working to combat poverty and promote access to housing. Beyond the staggering total of her donations – nearly $19 billion (half her fortune) over the last five years – the defining feature of her philanthropy is its unrestricted nature, with no earmarking for specific projects. She funds the general operations of organisations, emphasising that their teams are best positioned to decide how to allocate the funds to fulfil their missions. Even more strikingly, most of the organisations that received funding were completely surprised, as they had not even applied for these sometimes multi-million-dollar grants.

This stands in stark contrast to "strategic philanthropy", where donors are expected to carefully select funded organisations, put them in competition through project calls, steer desired change based on evidence and precisely evaluate the results. The key terms? Leverage effect, theory of change, accountability, impact measurement and scaling up. Even the proponents of this approach now paint a rather bleak picture of its outcomes and are calling for a rethink^[1]. 

MacKenzie Scott's approach is part of the renewal of philanthropy in North America, still marginal in terms of actual practices but quite profound in terms of its foundations. This movement is known as "trust-based philanthropy", which is based on six key principles^[2]:

• Offer multi-year, unrestricted donations to provide funded organisations with the stability and flexibility they need to carry out their mission effectively and innovate.
• Do your homework. Rather than burdening organisations with the task of responding to project calls – which consumes time and money at the expense of their mission – the donor should allocate resources to carefully determine who to give to, stepping outside their usual circles.
• Reduce paperwork. Replace the time-consuming and jargon-filled written activity reports required from funded organisations with direct conversations and shared learning.
• Be transparent and responsive. Open, transparent and honest communication is the foundation of a mutual trust-based relationship. This means that foundations should clearly explain their own operations, criteria and even share their doubts. This type of communication reduces misunderstandings, unmet expectations and, most importantly, fosters more robust and balanced partnerships.
• Listen and act. Gathering and integrating the perspectives of beneficiaries and funded organisations enriches the donor's vision. It's also a way to recognise their value. If your consultants are paid, why not also give monetary recognition to the donors you engage to inform your thinking?
• Offer more than a cheque. Providing access to networks, mentorship, recommendations and non-financial support all enhance organisational capacities, especially for organisations that lack the necessary connections and visibility.

Some foundations have long followed these principles, such as the foundations in the Funding Exchange network in the United States, established in the 1970s by rebellious heirs^[3]. However, two events shook the American philanthropic sector in the early 2020s, prompting major foundations, such as the Ford Foundation, to rediscover and promote these previously marginal practices. The first event was the Covid-19 pandemic, which led foundations to significantly relax their funding constraints (project definitions, accountability) in order to enable grassroots organisations to respond to the emergency, adapt and innovate in a rapidly changing context. Many of these foundations also increased their funding to help very fragile organisations strengthen themselves (or even just to survive). The second event is related to the Black Lives Matter movement, which began in 2013 but gained significant momentum following the death of George Floyd on 25 May 2020. Questions surrounding racial inequalities resurfaced, including within the philanthropic sector, where investigations revealed how historically – and still today – racial minorities have been poorly supported by foundations, particularly when the organisations are led by people of colour^[4]. The strong social and racial homogeneity of the philanthropic world has also been highlighted^[5]. Beyond the issue of unequal distribution of funds, it is the power dynamics at play in philanthropy – between donor elites and excluded minorities – that has prompted self-reflection within several major foundations and a revision of their procedures.

Trust-based philanthropy is therefore not just a guide to best practices. More fundamentally, it is an attempt to rebuild the legitimacy and effectiveness of philanthropic actions by learning from two types of deadlock. Firstly, the deadlock of strategic philanthropy: this approach risks favouring organisations capable of speaking the complex language of project calls, to the detriment of more vulnerable organisations, and its accountability requirements, often cumbersome and irrelevant, stifle the creativity of organisations. Secondly, the deadlock of philanthropy that claims to fight social injustices but structurally reproduces them through its foundations and practices^[6].

However, is trust-based philanthropy a panacea? First, it is important to note that we are talking more about a programme and experimental practices than about an observation of massively transformed practices. Secondly, there are criticisms of the blind spots in this "new orthodoxy" of philanthropy^[7]. The processes governing MacKenzie Scott's choice of funded organisations are said to be opaque and could reinforce the donor's arbitrariness. The size of her donations could destabilise organisations (especially if they haven't solicited them!). The production of evidence, which was presented as an important contribution of strategic philanthropy, may be sidelined, and the donor's expertise minimised.

But the deployment of these critiques within philanthropic sector journals highlights the centrality of the questions and challenges that this movement poses to the entire field. In this regard, although the emergence of trust-based philanthropy is partly linked to North American specificities, it resonates with the democratic challenges faced by French foundations^[8] and can offer them stimulating avenues for reflection and action.