Understanding Impact Workforces and Supply Chains[1]: Trust-Based Philanthropy’s Role in Improving Organizational Culture.
Philanthropy can and should be more equitable, effective, and responsive to the communities and organizations closest to the needed impact. Trust-based philanthropy has helped advance this cause by encouraging funders to reduce unnecessary burdens on organizations, provide flexible, multiyear support, listen with humility, and recognize the expertise of grantee partners [2]. These principles and tactics represent an important correction to traditional philanthropy. Too often, donors have imposed strategies, reporting requirements, timelines, and definitions of success that reflect the needs of funders more than the realities of the organizations and communities those organizations seek to support[3]. Trust-based philanthropy asks donors to relinquish some elements of control and approach grantees as partners rather than contractors[4]. For those of us in the non-profit space, this is an exciting and welcome change. For those of us in the funding space, it is an important evolution in how we understand and exercise our role.
To be effective, philanthropy requires not only an understanding of power dynamics
· Between donors and implementing partners
· Between organizations and the communities that they serve
· But also an understanding of power dynamics across the workforce (the impact supply chain), including a deeper understanding of organizational culture in the entities that we fund and that are tasked with translating financial resources into change.
How does power operate inside organizations? How are decisions made? Do people feel safe? Do people feel empowered to raise concerns? Whose expertise is valued? Are an organization’s stated values reflected in the daily experiences of the people doing the work?
Trust-based philanthropy asks funders to change how they hold power. Trust-based philanthropists should also seek to change how leaders of the organizations that they fund hold power. Both sides of the equation matter. By looking at the impact system holistically, we can help philanthropy move beyond funding projects and toward strengthening the people, relationships, and institutions on which transformative change depends, thereby significantly improving intended outcomes.
Trust-based philanthropy cannot achieve its stated goals without understanding whether the trust, flexibility, and power extended to grantee organizations are, in turn, shared with the practitioners within those organizations responsible for translating philanthropic capital into positive impact.
This realization emerged from decades of working within and alongside conservation organizations and became the foundation for an essay I wrote, Conservation’s $1 Billion Leadership Problem: It’s Time to Build a Better Boat. In that analysis, I examined the enormous but largely invisible cost of unhealthy workplace cultures across the conservation sector. Five of the largest U.S.-based conservation organizations collectively managed more than $20 billion over approximately a decade. Each conservation organization experienced significant, publicly documented failures in leadership and workplace culture. Even with a deliberately conservative estimate, the resulting losses associated with turnover, burnout, disengagement, poor management, delayed decisions, and diminished organizational capacity exceed $1 billion. To be clear, this phenomenon is not limited to conservation organizations but rather is distributed throughout the non-profit sector.
Organizational culture is not separate from mission impact. Culture determines how effectively philanthropic capital is translated into outcomes. Beyond the financial implications, funding organizations that do not foster healthy, equitable, and accountable cultures risks reinforcing the power imbalances and harmful systems that trust-based philanthropy seeks to mitigate.
An organization can report on acres protected, policies changed, species recovered, communities served, diseases cured, improvements in educational outcomes, livelihoods created, etc., while simultaneously losing talented people, suppressing critical information, rewarding destructive leadership, or exhausting the employees responsible for delivering those outcomes. These human and financial costs do not appear in grant reports, board meetings, or audits, and are borne out in staff turnover, loss of institutional memory, absenteeism, conflict, stalled innovation, weakened partnerships, and lost opportunities.
Historically, funders have tended to approach organizational culture in one of two ways. Some treat organizational culture as an internal management matter that falls outside the appropriate scope of donor involvement. Others respond to cultural failures by adding reporting requirements, commissioning audits, or imposing new financial metrics. Neither approach fully addresses the problem.
Donors can (and must) learn to recognize healthy organizational culture as an essential component of transformation without attempting to manage organizations from the outside.
Donors should:
1. Invest in organizational culture as seriously as program outcomes. Donors routinely ask about financial sustainability, governance, and impact metrics. They rarely ask about leadership culture, psychological safety, staff retention, or how decisions are made. Those factors determine whether organizations can sustain impact over time. Donors can provide flexible funding for leadership development, organizational learning, human resources, conflict resolution, staff well-being, and culture recovery rather than treating these investments as administrative overhead.
2. Encourage and support confidential listening systems and other mechanisms that allow organizations to understand the employee experience. Donors can ask thoughtful questions about retention, psychological safety, leadership accountability, and organizational trust while recognizing that no healthy organization is free from disagreement or difficulty.
3. Redefine what type of leadership is rewarded. The nonprofit sector has a tendency to celebrate the larger-than-life founder or executive who is portrayed as single-handedly driving the organization's success; leaders who are highly visible rather than those who build highly functional organizations. The "hero CEO" narrative is a fallacy that reinforces unhealthy leadership behaviors, including rewarding leaders who centralize power, hoard relationships, take disproportionate credit for collective achievements, and become indispensable to the organization's identity. We must invest in leaders who are capable of and willing to build exceptional teams, distribute authority, develop future leaders, and create institutions that can thrive without them.
4. Examine what is incentivized. Philanthropy often rewards visible growth: larger budgets, expanding programs, ambitious targets, charismatic leadership, and compelling stories of impact as opposed to whether the systems underpinning that growth are healthy and sustainable. We know that organizations already feel pressure to limit communication about internal challenges because they fear candor will be interpreted as weakness, poor management, or an increased risk to funding. Further amplifying the problem is the fact that cultural problems are not always consciously concealed. Senior leaders may have limited visibility into how power, trust, and psychological safety are experienced throughout their organization, particularly when employees do not feel safe speaking candidly or when information is filtered as it moves upward. Leaders may also be unaware of the ways their own behaviors, decisions, or leadership styles contribute to unhealthy dynamics. Even well-intentioned donors can inadvertently reward silence and discourage transparency. Simple tools, such as gender-disaggregated culture surveys and regular board-level reviews of staff engagement, turnover, and psychological safety, should become standard components of organizational due diligence.
Donors have a legitimate interest in understanding whether the organizations they support use resources effectively, treat people responsibly, learn from mistakes, and maintain the institutional capacity necessary to achieve their missions. The question is not whether culture accountability should exist, but how it should be exercised. Accountability grounded in partnership, curiosity, shared learning, and clear expectations is fundamentally different from accountability grounded in compliance and control.
We are spending a lot of time these days thinking about and developing additional tools to help donors understand organizational culture without creating another reporting burden. How can funders support psychological safety without inserting themselves into internal personnel matters? How can philanthropy distinguish between organizations experiencing the normal discomfort of growth and change and those in which harmful patterns have become embedded? How can donors encourage candor when their funding supports relationships and organizations that inherently involve unequal power?
While we do not yet have complete answers, what we have learned is that organizational culture can no longer be treated as peripheral to philanthropic strategy. The people carrying out mission-driven work are not merely inputs to theories of change. Their knowledge, creativity, relationships, judgment, and capacity are among the most important assets in advancing the outcomes we seek to support. When those assets are diminished by unhealthy systems, philanthropic capital loses value. When people are trusted, heard, supported, and led well, organizations become more capable of learning, adapting, collaborating, and sustaining impact over time.
[1] The term “Impact Supply Chain” is used here to describe the interconnected relationships through which philanthropic capital, authority, information, accountability, and decision-making move: from donors and philanthropic institutions to grantee leadership, organizational managers and employees, implementing partners, frontline practitioners, and ultimately the communities and people the work is intended to serve. Existing approaches, including trust-based philanthropy, participatory grantmaking, community-led development, and nonprofit organizational-culture research, examine important dimensions of power within this system. The impact-supply-chain framework extends this analysis by considering how power is transferred, retained, exercised, or shared at each stage and whether the trust, flexibility, voice, and decision-making authority extended by funders continue throughout the system or become concentrated at the organizational boundary.
[2] Trust-Based Philanthropy Project, “The Six Grantmaking Practices of Trust-Based Philanthropy.”
[3] Center for Effective Philanthropy, “Why Do We Bother? The Tragedy of Foundation Reporting Requirements,” 2021.
[4] The Bridgespan Group, “Pay-What-It-Takes Philanthropy,” 2016; Center for Effective Philanthropy, New Attitudes, Old Practices: The Provision of Multiyear General Operating Support, 2020.