Systems of Trust in Rural Philanthropy
This article was written by 2025 Mutz Philanthropic Leadership Institute class member Chad Huff
Small, rural community funders are primed to embrace trust-based philanthropy.
Trust Based Philanthropy (TBP) advances a just and equitable society by alleviating the inherent power imbalances between funders, nonprofits, and communities. With a commitment to shifting power, advancing equity, and building mutually accountable relationships, trust-based philanthropy positions funders as collaborators working alongside nonprofits to meet the needs and dreams of communities who are most removed from conventional power structures.
For 11 years, I’ve worked in a rural foundation. On the surface, our grantmaking process is very traditional. We solicit applications, which are reviewed by a single committee. We score proposals on a rubric for completeness and mission-fit, and some are approved. A typical terms document and report are created for each award. Simple, right?
However, that traditional process breaks down every day. When the needs of the organization or community are compromised, we adjust to make the requirements fit the need. When an agency doesn’t have a clear budget, we have a conversation. When program numbers aren’t as expected, we help identify a meaningful story to replace a number-centric report. When a program might run into next year, we just adjust the terms.
We didn’t always know what to call it, but this is a version of Trust-Based Philanthropy.
The TBP model identifies six essential practices. They include “giving multiyear unrestricted funding, doing the homework, streamlining paperwork, being transparent and responsive, soliciting and acting on feedback, and offering support beyond the check.“
Small, rural funders are primed to adopt these practices for four key reasons.
- Philanthropy in small communities is more familiar with qualitative data. Tipton, Indiana has a community foundation that serves 15,000 residents by deploying grants from a local endowment. Tipton County has a growing Latino community, representing about 3% of its population. That means a program which has a positive impact on 10% of that community affects roughly 23 people. The quantitative data on that program will never paint a representative picture of its impact. Small communities are accustomed to these scenarios. Instead, storytelling and qualitative reporting are the norm. This familiarity alleviates the need for complicated reporting. Community organizations can dedicate less time and expertise to wrapping up a grant, and more to their mission-driven work.
- Small communities effectively activate local change. Small, rural funders can break down conventional power systems by addressing policy change at a local level. Advocacy, though funders don’t always use that term, is a key part of the work. Foundations everywhere engage in community conversations and planning activities alongside government officials. They identify issues and projects together and funders are in the room, often physically, with policy makers. They can use relationships with these uniquely accessible leaders to wear away at the status quo, pushing at the smallest dominos of conventional power structures.
- Small communities have shorter feedback loops. In these communities, there are fewer steps between funders and the organizations and people they serve. This is valuable for many reasons, but especially in soliciting and using feedback. These shorter loops allow funders to engage continuous systems, like “double-loop learning,” which you can investigate here.
- Small funders already create systems of ongoing support. TBP calls on practitioners to provide support beyond the check. Small community funders excel in this area. These organizations are accessible, nimble, engage the community, and have access to professional resources and networks.
Indiana Philanthropy Alliance, for example, coaches new grantmakers on the value of capacity-building activities and being knowledgeable about their communities. The field, especially at the rural community level, is built around relationships. Limited resources make it crucial that grants are not gifts, but rather partnerships.
It’s not all smooth sailing. There are three major roadblocks facing small communities when it comes to trust-based methodologies. However, funders can counter each with the community-building work that they already do.
Preservation and Scarcity
It’s no secret that resources in communities are limited. Words like preservation, maintenance, even history in the mission statements of small, rural funders are all too often ways of saying “we prioritize keeping what little we’ve got.”
But this mindset can be combated by asset mapping and the building of cohort groups, both achievable without straining local resources. Many rural spaces, out of necessity, are already familiar with the basic concepts of Asset-Based Community Development, a system where one “considers local assets as the primary building blocks of sustainable development.” Learn more here.
Struggling Local Media
According to research from Northwestern University, “70 million residents, … are either living in an area with no local news organizations, or one at risk, with … limited access to critical news and information.” This same limited access restricts the diversity of thought required for effective philanthropic solutions. In the absence of media, funders are in the unique position to act as “community conveners.” While neutrality on issues is not the goal, rural funders like community foundations have staff and connections with the skills to “neutrally” facilitate community conversations. Here, diverse voices are discovered and next steps identified.
Risk Aversion
Of all the pitfalls in the trust journey for rural philanthropy, the tendency of funding boards to be risk-averse may be the deepest. It goes beyond the fear of financial loss and is rooted in the very definition of donor stewardship. It's a tough nut to crack. However, in their role as convener and planner, philanthropy can drive community visioning exercises. These planning activities outline desired impacts without being prescriptive about how to achieve them. Programs or services previously regarded as “risky” on their own may be reframed in the context of achieving the community goal. You can check out a community vision plan created by a small, rural foundation here.
Where Do We Go From Here?
Despite surface level discrepancies, foundations and other funders in small, rural communities are uniquely positioned to embrace trust-based philanthropy. By building strong ties, an endeavor in which their size is an advantage, they can become more risk tolerant and allow unrestricted dollars to fuel untested programs. They can move more quickly and bend more rules without fear. They can asset-map to alleviate feelings of scarcity that drive traditional quantitative program justification. And finally, they can create connections that tell stories, building the qualitative narrative essential for measuring impacts which data sets will never show.