Martin Segal smiles at the camera from the front row of the 2023 Annual Meeting

In Trust We Trust

| June 3, 2024
by Martin Segal, Board Chair

As the world of philanthropy looks to better its ways and broaden its impact, trust-based philanthropy has become a hot topic. Going by this opinion piece published in the January 2024 issue of the Chronicle of Philanthropy, however, the approach is still grossly misunderstood. The author of said piece implies that trust-based means no accountability, an assertion that couldn’t be more incorrect. While I can only speak for Segal Family Foundation (trust is one of our values), here is what trust-based grantmaking is not: it is most certainly not about blindly throwing funding at an organization without regard for their actual performance. The way we do it, an organization’s good reputation may precede them but trust must still be earned—and maintained.

Segal Family Foundation’s grantmaking process relies primarily on referrals from sources with whom we already have an established relationship, but as a funder we still do our own due diligence before making a decision. We do require financial statements, and work with the grantee partner to establish milestones at the onset of the grant. Thereafter we ask for only one report per grant period, but there are multiple other touchpoints in between. It is worth pointing out that what makes it possible for us to be diligent without being burdensome is the presence of an entirely local grantmaking team. In each of Segal Family Foundation’s hubs of operation, we have program officers who are deeply familiar with the societal context and maintain high-touch relationships with our grantee partners. Locally-embedded operations are not the norm in the philanthropy world yet ought to be a ubiquitous industry best practice. This structure is crucial to Segal Family Foundation’s success – and allows us to confidently make flexible multi-year grants, which have proven catalytic for our partner organizations. Where the author of the earlier-mentioned article asserts that funding should be given piecemeal as grantees prove their worth annually, we counter that once a baseline level of trust has been cemented, donors would do well to take a leap of faith (which we’ve found is not so much a leap as much as a stride in the right direction). Longer funding periods give organizations more runway to make more meaningful strides.

Admittedly, there is an element of risk to trust-based funding as we do it. Sure, a grantee partner could up and make off with funds, or not use them the way they claimed they would. But guess what? Misappropriation still happens even with tedious reports and shorter grant periods. It would seem, however, that some funders think it impossible to be thorough without micromanaging—especially in the African context, and the Global South as a whole. This is where conversations with peer funders prove useful: last year, we hosted a Donor Salon to get together with our philanthropic fellows. We talked freely about our fears, triumphs, pitfalls, and practices; it helps to trade notes with those on the same side of the field. After all, as Kevin Starr of Mulago Foundation posits, we are only human.

At Segal Family Foundation we require excellence of our grantee partners—and we see it daily, in our African Visionary Fellows and the other organizations in our portfolio. Not only because they are, but also because we choose to believe in their work truly and deeply. It is understandable for a funder to want to protect themselves against fraud; we care about that too. But let us not allow that to limit what we could do for organizations by actively supporting their growth while setting reasonable parameters within which to go big. Consider this an invitation to rethink “trust”: peruse our playbook and let’s talk about it.