Letter to the Editor: Building Trust in Philanthropy
Last month, The Economist published a Special Report highlighting some global trends in philanthropy that center on trusting communities and the local organizations that represent them to know best how to manage resources for their own benefit. Some of the trends it discussed included no-strings giving, investing specifically in organizational overhead, and funding local organizations based in the communities they serve. In addition to the benefits of these approaches, the report raised some potential pitfalls. Based on our extensive experience as a funder of community-led development, we wanted to build on the analysis in the report with some additional reflections.
The article “No-strings philanthropy is giving charities more decision-making power” captures a fundamental truth the development community is beginning to acknowledge: that organizations based in the communities they serve know best how to address their own challenges and build their own opportunities.
It also seems to suggest a trade-off or dichotomy between achieving trust with local communities and having strong accountability to funders with measured outcomes.
At the Inter-American Foundation, we are proud to have proven that both achieving local trust through our community-led model and strong accountability are possible at once. Congress actually suspected this already back in 1969, when it founded the Inter-American Foundation (IAF) to deliver U.S. foreign assistance directly to grassroots and civil society organizations who design and propose their own projects. More than 50 years of experience have shown us this is not just “nice” but cheaper, more effective, and more sustainable over time.
To help mainstream community-led development, the IAF’s lessons in mitigating the challenges of no-strings approaches noted in the article could be helpful to others:
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Coverage on this topic will contribute to the momentum for delivering development funding directly to community organizations. Keeping our oversight of resources and stewardship of ongoing relationships strong will help make that case. Each year, the IAF can only fund a fraction of the localized, community-led proposals we receive. The model works; our collective challenge now is to put real resources into community-led development.