In the spring of 2020, funders far and wide pledged to embrace what has become known as trust-based philanthropy, rolling out general operating support, making multiyear grants and loosening reporting requirements. Three years later, while some funders have indeed changed their ways, such practices haven’t reached widespread adoption. In fact, there’s evidence that funders are backsliding to their pre-2020 posture.
While there is no shortage of theories about why many funders remain unwilling to loosen their grip on power, Patricia Mejia, vice president of community engagement and impact of the San Antonio Area Foundation (SAAFdn), considers it part of a “larger narrative that assumes that people who are in need are doing something wrong, while not acknowledging the systems that create the conditions for them not to be successful.”
The assumption that those in need can’t be trusted to solve community problems is one that SAAFdn has flatly rejected. Mejia came on board in 2018 and oversaw the adoption of trust-based philanthropy across the foundation’s discretionary grantmaking (as a community foundation, much of its grantmaking moves through locally owned donor-advised funds). By 2022, the SAAFdn classified 94.2% of the $8 million in discretionary grants it disbursed to local nonprofits as general operating support. Looking ahead, its 2023-25 Responsive Grant Process calls for the continuation of multiyear general operating support, ongoing revision of reporting requirements and soliciting feedback from Community Advisory Committees to inform grantmaking decisions.
The foundation’s evolution is a reminder that such changes require dedicated advocates. When a funder resists unrestricted funding or walks back from 2020-era pledges, it’s usually channeling the sentiments of board members and other power structures that have a soft spot for the status quo. On the other hand, funders rarely embrace trust-based practices because leadership has a collective epiphany. They often do so because internal champions make a compelling argument, while acknowledging how these shifts could dilute their own power and that of board members.
As someone generally in favor of such practices, the idealist in me likes to think there are still voices in the wilderness working to nudge board members toward more community-centered giving or preventing a return to a pre-pandemic state. If I’m correct, Mejia’s takeaways will be instructive and timely. “It’s not a linear process and there isn’t one way to do this,” she said. “It’s what is palatable for your leadership at the time.”
“What do you want us to be?”
Mejia was born and raised in Corpus Christi by a single mother. She was a first-generation college student and attended a Hispanic-serving institution. After graduating, she worked in the nonprofit field for a dozen years, focusing on asset development for low-income families. Before joining the SAAFdn, Mejia worked for the San Antonio-based Methodist Healthcare Ministries of South Texas, which was her first foray into the foundation world.
Mejia stressed that her upbringing led her to embrace trust-based philanthropy. “I think about my mom,” she said. “She didn’t need someone to come in and tell her how to run her family. She simply needed resources.” Here, Mejia draws similarities between her mother and nonprofit leaders who “understand their communities and are on the front lines. What they need from philanthropy is trust to apply those resources to advance their missions.”
SAAFdn was established in 1964 as a traditional community foundation, but went through a substantial change in late 2015, when it received a bequest valued at more than $605 million from local cinema businessman and real estate entrepreneur John L. Santikos. The gift comprised the bulk of Santikos’ estate, including his theater chain, real estate businesses and land assets, and established the John L. Santikos Charitable Foundation Fund as a subsidiary of the SAAFdn. The fund manages the bequest and provides funding to nonprofits from annual variable dividends generated from his movie theaters.
“The bequest changed what was possible for us,” Mejia said. The board convened community focus groups and asked, “‘What do you want us to be?’” Mejia said that while community members didn’t explicitly use the words “trust-based philanthropy,” terminology that wouldn’t really catch on for another couple of years, the sentiment was clearly there. “They said, ‘We need you to be our partner and know that we can apply our resources when our priorities change. We need you to center equity and support organizations of all sizes.’”
Leaders implemented these takeaways across the foundation’s policies and procedures in 2018 and 2019. The foundation awarded nearly $72 million in total grantmaking in 2020, including discretionary DAF giving by community members, as well as scholarships and hardship grants. Most of the discretionary grants were earmarked as general operating support. A year later, it rolled out its new mission statement: “Close the opportunity gaps for those in San Antonio who need it the most.”
Making the case
Thankfully, Mejia didn’t get any serious pushback from board members concerning the SAAFdn’s pivot to trust-based grantmaking. That said, she and her team still had to make conceptual and practical arguments.
For example, in a presentation to stakeholders, “there was one slide that said, ‘This is San Antonio, a city to be proud of,’” she said. “It showed that we’re one of the fastest-growing cities in the nation, how it had a reasonable cost of living and other advantages.” But the next slide said, “‘This is also San Antonio,’ and it said that it’s one of the most economically segregated cities in the country.” (Pages six and seven of the SAAFdn’s 2021 Impact Report lay out this tale of two cities.)
For Mejia, this juxtaposition showed stakeholders that “the only way we can come about real change is to acknowledge our interdependence across our communities.” She also stressed that the foundation could play a “very unique role in the city” by providing grantees with relatively rare general operating support.
Considering these practices end up being such a great fit for some foundations, you have to wonder why three years into the pandemic, most funders still seem to prefer restricted project grants over general operating support.
“I think it’s pretty simple,” Mejia said. “I feel that we as a society generally want to see a return on investment, and somehow general operating doesn’t feel like it’s a return on investment.” While most funders believe that project-based support is better because it’s more conducive to measurable outcomes, Mejia flipped the logic on its head in her conversation with stakeholders, arguing that unrestricted funding allows grantmakers to have “more ownership of the success of the entire organization, versus just funding one program.”
For example, she noted that many organizations serve a broad swath of demographics, from children to older adults. A project-based grant would provide funding specifically focused on senior services. In contrast, a general operating support grant enables the organization to move the needle in senior services, youth success or any other component of the organization’s mission. It gives funders a vested interest in the totality of the organization.
Yes, it will pay for air conditioning
Mejia also found herself clearing up stakeholders’ misconceptions about general operating support. “Someone said to me, ‘Does this mean we’re going to have to pay for their air conditioning?’ And I said, ‘Yes, because if a child is coming in for an after-school program in August and it’s 110 degrees, the educational objectives that you laid out will not be reached.”
To further drive the point home, Mejia asked board members if they’d rather receive a donation of $5 for gas or $5 to be applied to whatever they needed that day. Board members naturally preferred the second “unrestricted” option. For Mejia, this experiment showed that “telling the story as it connects with a family resonates with people whether or not they’ve had that lived experience.”
Readers may find it amusing that Mejia had to explain to a stakeholder that unrestricted funding could even pay for their air conditioning or lunches. That only goes to show how hard it is to find money that will pay for basic organizational expenses. Funders exist to set strategic priorities, fund organizations that address them, and measure their performance, or so many have come to believe. They don’t bankroll overhead.
And yet, Mejia’s experience suggests that TBP proponents still have an obligation to show stakeholders how paying for an organization’s utility bill, however prosaic or “un-strategic” it may seem, can benefit the communities they serve. “It may be air conditioning now, but it might be lunch the next time, and they are equally important to get to the outcomes we want to achieve,” Mejia said.
While Mejia appreciated her board’s support throughout its transition, she was quick to say that it wasn’t always a seamless and harmonious process, noting that in some cases, support dried up for long-time grantees once the foundation revised its policies. “You’ve got to question every process that you have in place,” Mejia said. “I don’t know if you want to blow it all up, but you definitely want to question every single thing and recognize that it’s going to be a difficult journey.”
She encourages leaders looking to adopt trust-based practices to “find allies who have done it and make sure you check in with them,” hire a diverse team with a broad swath of lived experience, and above all else, lean on centering community voice, because “those who are in the field know what needs to happen to make great change.”
Before we signed off, Mejia noted that “we have a significant national investment coming in, and the funder said that a lot of it has to do with the fact that we’re a community foundation that leaned into trust-based philanthropy.” Beyond the fact that the funder validated SAAFdn’s approach, Mejia found the news thrilling because it seemingly flies in the face of conventional wisdom. “People think that if you can’t show all these outcomes and if you’re not prescriptive, that it won’t attract other money,” she said. “But in reality, I think it can do the opposite.”