Why trust-based giving makes grants more successful
Our article this month focuses on the story of Kansfonds, a grantmaking foundation based in the Netherlands. It is a translation of an interview published originally in Dutch in which Eline Crins, head of programs at the foundation, discusses why the foundation decided to make more unrestricted grants. For any subscribers who have also read our book, ‘Modern Grantmaking’, you may remember that one of our grantmaking ‘no-brainers’ was that more funders should offer more unrestricted funding.
Why Kansfords went unrestricted
About 90 percent of all grants mainly support individual projects. For a long time, Kansfonds resembled many other funders in terms of awarding grants. Every year, hundreds of applications were received for projects. These were then compared with funding criteria for assessment. Until Kansfords developed a theory of change that helped to map the impact of its grants. 'It turned out that there were many project applications in our portfolio that came back every year. Especially drop-in centres for homeless people. In all kinds of ways, the drop-in centres tried to fit their daily work into a project application to cover their costs. For example, they submitted applications for cooking projects to provide their target group with meals. But it was clear that this was not how they really wanted to finance their basic offer.'
These project applications from drop-in centres did not obviously fit in with the funder’s typical assessment criteria. Kansfonds could therefore have decided to stop supporting drop-in centres. Yet that did not happen. On the contrary. 'It really wasn't an option. Their work fits in perfectly with our mission. Moreover, the need is high and finding money is not easy. A lot of funding is linked to achieving quick and measurable results, such as the number of people you get into work. But such funding does not fit in with drop-in centres. Their goal is to offer people in vulnerable situations a place where they are unconditionally welcome.'
More meaningful and fun
Kansfonds made a key decision: it adjusted its grantmaking strategy. 'First we started to delve into the world of the drop-in centres. We discovered that behind the financial distress there are all kinds of other problems. Such as unstable boards. A decreasing number of volunteers. Increasing problems of visitors, which increases the pressure on drop-in centres even more.' This led to the decision to fund the operating costs. But not only that. The fund also immediately set up a capacity-building program with the drop-in centres to work on the underlying problems. All this takes place under the name Franciscus Fund, to this day.
'What we see is that you help these organisations with peace and space. This allows them to do their work better, which in turn contributes to our mission. In addition, it also makes our work more meaningful and fun. The application and reporting pressure is a lot less, leaving you with more time. You can invest this in your relationship with the organisations. The great thing is: because trust is the basis, they dare to speak out more about what is going on, what is needed and what can be improved.'
Insufficient match
How is it possible that despite all these advantages, funders often still hold on to only funding projects? Crins: 'Giving grants to projects gives you a sense of control. It's just nice that you can say something about the output of a project. But that doesn't tell you anything about the underlying or longer-term difference you make. As a fund, you are working on major issues in society. These cannot always be captured in projects. So there is actually insufficient match between your larger goal and your grantmaking strategy. Moreover, with project funding, we unintentionally keep organisations small. Because they only receive money for activities aimed at their target group, they never get the peace and time to strengthen their organisation. For example, to strengthen their position or to train their employees. You hollow them out unintentionally, as it were.'
Getting used to it
Crins understands that there are funders that are hesitant about philanthropy based on trust and offering unrestricted funding. After all, it requires a different way of thinking and acting. What about Kansfonds? 'Actually, there were hardly any obstacles. It took some getting used to for the grant assessors because they always assessed the projects according to a fixed format. Now something else was asked of them. But because we included them in thinking at an early stage, the support was great. It also turned out that we could not easily guide applications for unrestricted funding through our administrative system. We have simply solved this by putting a cross next to questions that do not apply. So your fund's existing information system does not have to be overhauled right away.'
What are her tips for starting philanthropy based on trust? 'Look at any organisations that you have been supporting for a long time with project funding. Is that project funding still in line or is there a reason behind it that they keep coming back? Perhaps these are organisations with which you can try out multi-year, unrestricted funding. Because you already know them, it's also easier. Above all, talk to each other within your organisation. What is your mission as a funder, which organisations can contribute to this and which form of funding is really most suitable for them? Look for the match.'
Doing the right thing
There is a growing awareness that something has to change in order for a foundation to make a long-term difference. Interest in philanthropy based on trust is therefore increasing, Crins notes. Research into this is now being done by the Center for Grantmaking Research of the Center for Philanthropy of the Vrije Universiteit, supported by the National Postcode Lottery. Crins is associated with this Center as a research fellow.
'There is already a lot to read about how to take the first steps. But you learn the most from each other. Foundations with endowments especially need each other to offer unrestricted funding for a longer period of time. You often can't do something like this alone, given the investment and the time span. In this way, foundations also help fulfill each other's mission and we constantly learn to do the right thing. From trust.'
Latest Reading, Watching & Listening - Modern Grantmaking recommends
Philea recently published a ‘2025 Democracy Briefer for Funders’. This document explores the deeper, underlying causes of polarisation and populism across Europe and outlines that while philanthropy alone cannot reverse democratic backsliding, it can catalyse change. The briefer demonstrates that there is a rich ecosystem of movements and organisations ready to ramp up their efforts in defending and innovating democracy and there are numerous tried and tested methods waiting to be leveraged with further funding support. In just five years, MacKenzie Scott has given more than $19 billion in unrestricted support to more than 2,000 organisations, stating that her aim “has been to support the needs of underrepresented people from groups of all kinds.” Scott’s very large, unrestricted gifts have transformed recipient organizations and influenced many of the communities these organisations serve. The Center for Philanthropy’s (CEP) final report in a three-year study shows that most leaders of organisations who received a gift reported using these to help ensure their organisation’s long-term financial sustainability and are observing meaningful change created for communities. Over the past three years, nonprofits have consistently reported positive effects of these large, unrestricted gifts, but foundation CEOs continue to have mixed perspectives on the approach. The third edition in a research series that analyses funding across the UK for social justice work just dropped. Funding Justice 3 by Jon Cracknell at The Hour is Late and Eliza Baring at the Civic Power Fund drew on over 20,000 grants worth £935.7 million. Key findings include: Grants directed to social justice work account for c. 4.5% of the funding from the UK’s largest grantmakers, with just 0.2% being directed to community organising work.
3,871 social justice grants were distributed to 2,238 different grantee organisations. On average, each organisation secured just 1.7 grants.
The median grant size was just £15,000, and 1,270 organisations (32.8%) secured less than £50,000 in grant funding, with 881 (22.8%) receiving £10,000 or less.
Just under half of these grants (49.3%) were for 12 months or less, with a further 46% supporting either two or three years of activity, and only 4.7% providing more than three years support.
What makes philanthropy in Asia distinct from other parts of the world? How do its unique cultural, social, and economic contexts shape its practice? Watch or listen to a recent session shared via Alliance Magazine which examines the interplay between philanthropy and corporate giving, its evolving relationship with governments, and other key factors driving giving in Asia today Involving: the Asia Philanthropy Circle, the Tanoto Foundation, Dragon Capital and YTL Foundation,
How about a new job or trustee role in grantmaking?
The Robertson Trust (Scotland) is hiring for a Head of Funding. Salary is £70-80k. Deadline is 24 March 2025. Wiltshire Community Foundation (UK) is hiring for new trustees. Voluntary roles. Deadline is 31 March 2025.
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Grantmaking ‘joke’ of the month
How many grantmakers does it take to change a lightbulb?
Two: one to write an RFP for lightbulb-changing services, and another to evaluate proposals based on their impact on global illumination.
You can thank one of our subscribers for sending us this ‘joke’.
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Who are we?
Gemma Bull and Tom Steinberg run Modern Grantmaking, and write this newsletter. We do consulting and training specifically for funders, and wrote a book on how to be a modern grantmaker, too.
