Oftentimes in philanthropy, we tend to think of legal considerations in the context of compliance and risk mitigation — i.e., preventing things from going wrong and protecting funders from liability or harm. As a result, foundations that are curious about trust-based philanthropy may have questions about its legal compliance and legitimacy. Is trust-based philanthropy consistent with a foundation’s legal requirements? Can it be done prudently and responsibly?
The good news is that trust-based philanthropy is both fully consistent with the legal requirements for responsible grantmaking, and it also allows funders to use legal frameworks creatively and expansively toward reinforcing trust and relationships at the structural level.
This primer answers frequently asked legal questions about trust-based philanthropy, and offers guidance on how to work within legal parameters to reinforce trust and relationship-building with grantee partners. There may be greater flexibility for individual donors and public charities; please consult with your legal advisor to explore these questions further.