In reciprocity, we trust: Improving grantmaking through relational philanthropy

Abstract

With a growing emphasis on empowering communities amongst the practices of philanthropic foundations, practitioners recognise the need for giving strategies grounded in communities of practice's contextual and contingent knowledge. This bringing of beneficiaries' lived experiences into grantmaking represents a wider recognition that sees gift‐giving as a dialogical process that uses relationships with community beneficiaries as the point of departure for creating progressive forms of philanthropy, broadly referred to as ‘relational philanthropy’. Foundations that declare themselves as relational funders typically take a more trusting approach by offering more unrestricted, longer‐term funding, simplifying reporting requirements, and empowering grantees to use the resources provided more flexibly. In this paper, we argue that relational philanthropy expresses a form of ‘relational work’, as it possesses a trust‐based character that speaks to the reciprocal power of gift‐giving, whereby both benefactors and beneficiaries receive value from the co‐created, context‐drivengift exchange: beneficiaries receive philanthropic resources (time, treasure, talent, ties) with more control over spending, while the benefactors gain grassroots insights that can inform future funding policies and practices. In this paper, we show that such reciprocity between funders and their beneficiaries is an important step towards empowering communities for three reasons: (1) by strengthening trust in, and sharing power with, their grantees, foundations empower them to engage more thoroughly with their communities; (2) by grantees communicating their community‐level lived experiences to foundations, foundations can develop more informed and relevant grantmaking decisions, and; (3) as reciprocal exchanges are built on trust, this relational philanthropy creates social capital that strengthens relationships and solidarity across civil society.