What is your trust appetite?

Grant giving is not just a transfer of funds or a process, but an expression of trust. This week I had the gratifying task of notifying successful applicants that they had been awarded a grant. One response that came back included the phrase: “thank you for trusting in us”. Awarding a grant is trusting that the organisation supported will do what they said they would with the money and will do their best to achieve what they are setting out to do.

Donors are not naïve when it comes to allocating precious resources. They too want to achieve their social purpose and may well be accountable to regulators, or their family or the community (depending on their structure). They take steps to make sure the organisations they invest in are operating safely and are likely to be effective. They consider the risks: is the organisation stable? what if the project fails? And they put in place monitoring and reporting to see if all is going to plan.

Whilst it is right to pay attention to the risks and to measure impact, I find that very little attention is paid to the other side of the coin: trust. There are risk registers and impact frameworks and benchmarking exercises but the appetite for trust is rarely discussed or made explicit.

Trust matters at a practice level. In a recent training session I delivered, we looked at which documents foundations requested as part of the due diligence checks. This exercise is a balance of the risks and your level of trust. When is it OK to ask if the organisation has a particular policy? When do you want to see a copy? When do you take steps to determine how the policy is applied in practice? In designing this step in the grant making process, how far do you go in interrogating the information provided and how much can you take what the applicant says on trust?

Trust also matters at the strategic level. In their recent blog for GrantCraft, the Durfee Foundation gives an example of their ‘what if?’ approach where they placed trust “in community leaders to find their own solutions” rather than prescribing particular outcomes. Philanthropist Ise Bosch puts it really well in her article for Alliance magazine: “it seems to me we have gone overboard in overemphasising impact measurement. We’ve neglected the force of trust. We now have some quantitative data from ten years of working on the basis of trust as opposed to control. We’ve seen how it adds value to the money we’re giving … Of course I want impact, but that impact grows by being less controlling.”

Trust already underpins the relationship between the funder and funded and so will shape every aspect of your approach. It is time to make it explicit. So next time you are reviewing your giving strategy, why not make it clear where you stand on trust and ensure your practice matches your values.