Introduction
Funding relationships are central to the capacity of nonprofit organizations to sustain their operations and pursue their missions. These relationships, however, are characterized by structural power imbalances, in part because nonprofits depend on external funders who control critical resources. Scholars have therefore called for greater attention to the role of power in the nonprofit sector, where dependence on funders can “[give] funders power over the entire organization” (Bruni-Bossio & Kaczur, Reference Bruni-Bossio and Kaczur2022, p. 447). This dynamic can be intensified in rural, remote, and northern regions, where nonprofits face geographic dispersion and limited human capacity (Snavely & Tracy, Reference Snavely and Tracy2002), and resource scarcity and infrastructure constraints specific to northern and Indigenous contexts (Walters et al., Reference Walters, Brown, Wallis and Snow2023). We use “nonprofit sector” to refer to organizations that operate outside of the public and private sectors and pursue social or charitable purposes (Kallman et al., Reference Kallman, Clark, Wu, Lin, Kallman, Clark, Wu and Lin2016), commonly referred to as “third sector” (Boesso et al., Reference Boesso, Cerbioni, Menini and Redigolo2022). This includes nonprofit organizations and registered charities, which we refer to as grantees when discussing funding relationships.
Within funding relationships, power imbalances create barriers to information sharing and goal alignment between funder and grantee, perpetuating inequities established in traditional grantmaking (Wong & McGrath, Reference Wong and McGrath2020). Nonprofits expend considerable time and organizational resources to secure core funding, sometimes at the expense of core activities such as frontline services and organizational capacity (Adams, Reference Adams2026). While governments may fund nonprofits in service of their own policy goals (Stephen, Reference Stephen2006), this need not be a zero-sum game. Funders can adopt more responsive practices that meet both organizational needs and institutional objectives, helping to rebalance decision-making power (Hunnik et al., Reference Hunnik, de Wit and Wiepkin2021).
Nonprofit scholarship often applies power-based theories to examine organizational dynamics. Among these, Resource Dependency Theory (RDT) offers a useful lens for understanding how external control over critical resources shapes organizational behavior, autonomy, and strategic direction (Seo, Reference Seo2018). Resource dependency patterns, including the availability, diversity, and concentration of funding sources, may influence organizational resilience and social value creation (Seo, Reference Seo2018), which is particularly relevant in contexts characterized by resource scarcity and limited funding opportunities. For instance, in the Northwest Territories, the context in which our study is located, nonprofits often operate within a relatively small funding environment while facing geographic isolation, high operating costs, and infrastructure constraints. These conditions may heighten organizational dependence on external funders and amplify the power dynamics that shape funding relationships.
Building on RDT and its emphasis on power and resource control, we examined the following research question: How do nonprofit leaders experience and navigate power and resource imbalances within their funding environments? To address this question, we conducted semi-structured interviews with leaders of public-facing nonprofit organizations operating in the Northwest Territories, a region of Northern Canada, where nonprofit ecosystems are often characterized by small, interconnected communities, high operating costs, and limited access to sustained funding. Despite the central role nonprofits play in community well-being across northern regions, little empirical research has examined how grantee–funder relationships operate within these geographically remote, resource-constrained, and public-sector-dominated environments. Understanding these dynamics is important because concentrated funding ecosystems may intensify resource dependence and shape the possibilities and limits of trust-oriented funding practices.
Although our fieldwork was conducted in the far north, the insights speak to resource- constrained and geographically remote contexts more broadly, where relational dynamics are often undervalued within formal funding structures (Nadjjiwam & Blackstock, Reference Nadjjiwam and Blackstock2003). Greater empirical attention to these environments is essential for evidence-based policymaking that impacts the social value of nonprofits and the daily lives of residents (Carmichael & Elson, Reference Carmichael and Elson2022).
Using RDT as a post-hoc interpretive lens, we analyzed how nonprofit leaders experience and navigate power and resource imbalances within their funding environments. Alongside this analysis, we used trust-based philanthropy (TBP) as a sensitizing concept to examine the extent to which trust-oriented funding practices were present, absent, or adapted in these contexts. Although widely discussed in practitioner literature (Rumble & McVan, Reference Rumble and McVan2023; TBP Project, 2021), TBP has received limited academic evaluation (Doan et al., Reference Doan, Patil and Williamson2024). Relational funding approaches long predate TBP, but we selected TBP because it offers a contemporary articulation of relationship-centered grantmaking through identifiable practices such as multi-year unrestricted funding, streamlined reporting, reciprocal relationships, and support beyond financial grants and contributions. These practices were especially relevant in the Canadian North, where nonprofits often operate under conditions of resource scarcity, concentrated funding sources, high administrative burden, and geographic remoteness (Ramirez Prieto et al., Reference Ramirez Prieto, Sallans, Ostertag, Wesche, Kenny and Skinner2024; Southcott & Walker, Reference Southcott, Walker and Southcott2015). TBP therefore provided a useful interpretive reference point for examining how trust-oriented funding principles align with, or are constrained by, northern operational realities.
Our findings contribute in three ways. First, they provide empirical grounding for understanding nonprofit funding relationships in a Northern Canadian context, an environment that has received limited scholarly attention despite its distinctive structural and operational characteristics. Second, they contextually extend existing applications of both Resource Dependency Theory and trust-based philanthropy by examining how these perspectives operate within a geographically remote, resource-constrained, and public-sector-dominated funding environment. Third, they refine existing interpretations of trust-based philanthropy and resource dependence by illustrating how structural dependency shapes the possibilities and limits of trust-oriented funding practices.
To synthesize these insights, we develop an empirically grounded, practice-oriented framework that illustrates how power, dependency, and operational realities interact to shape nonprofit funding relationships in Northern Canada. Rather than advancing a new theory of grantmaking, the framework offers contextual extension and interpretive refinement of existing perspectives while providing practical guidance for strengthening grantee–funder relationships in northern and remote environments.
Literature review
Power dynamics in grantee–funder relationships
Scholars have argued that the distribution of power between funders and grantees has been historically unequal (Hunnik et al., Reference Hunnik, de Wit and Wiepkin2021), in part due to the structure of funding relationships worldwide (Phillips, Reference Phillips and Elson2016). These asymmetries are embedded in the act of giving itself: nonprofits must often compete for resources from funders (Bruni-Bossio & Kaczur, Reference Bruni-Bossio and Kaczur2022; Hunnik et al., Reference Hunnik, de Wit and Wiepkin2021). Nonprofits have frequently reported that such relationships can feel exploitative, or, at best, lacking in reciprocity (Elson et al., Reference Elson, Lefèvre, Fontan, Elson, Lefèvre and Fontan2020). Large donors often allocate funds without meaningful consultation with communities, prioritizing private interests over systems change (Ahmad & Khadse, Reference Ahmad and Khadse2022). Addressing these imbalances—or “shifting the script”—requires movement from donor-centric to community-centric approaches (Rumble & McVan, Reference Rumble and McVan2023).
Resource Dependency Theory (RDT) provides a useful framework for understanding these dynamics. RDT assumes that organizations depend on resources controlled by actors in their external environment, creating relationships characterized by both dependence and power (Malatesta & Smith, Reference Malatesta and Smith2014). Because access to critical resources is unevenly distributed, organizations that control those resources can influence the behavior, priorities, and strategic choices of others (Malatesta & Smith, Reference Malatesta and Smith2014; Pfeffer & Salancik, Reference Pfeffer and Salancik1978). Recent scholarship similarly highlights power as a relational phenomenon embedded within funding relationships, where recipients may experience pressure to conform to the expectations of actors who control financial, social, and cultural resources (Dula et al., Reference Dula, Paarlberg and Adeyeri2026).
Casciaro and Piskorski (Reference Casciaro and Piskorski2005) further refine RDT by distinguishing between power imbalance and mutual dependence. Power imbalance arises when one actor controls resources that are critical to another’s survival, whereas mutual dependence can create opportunities for negotiation and constraint reduction. RDT helps explain how organizations weigh short-term costs against longer-term strategies for survival and growth (Malatesta & Smith, Reference Malatesta and Smith2014), and how reliance on external resources shapes power relations (Macedo & Pinho, Reference Macedo and Pinho2006). RDT is particularly well suited to the nonprofit context, where in uncertain and resource-constrained environments, RDT helps explain how nonprofits manage risk, seek legitimacy, and navigate economic volatility (Macedo & Pinho, Reference Macedo and Pinho2006).
Power in nonprofit funding has also been examined through policy influence (Fyall, Reference Fyall2016), business collaborations (Bouchard & Raufflet, Reference Bouchard and Raufflet2019), and financial strategy (Frumkin & Kim, Reference Frumkin and Kim2001), highlighting how advocacy, partnerships, and resource positioning shape organizational autonomy. These dynamics are evident in the “nonprofit starvation cycle,” a systemic pattern in which funders’ emphasis on low overhead and efficiency leads nonprofits to underinvest in infrastructure, staff, and core operations to remain funder-compliant (Schubert & Boenigk, Reference Schubert and Boenigk2019). Together, this work shows how power operates through influence over organizational priorities, partnerships, and resource allocation, dynamics that are further illuminated by RDT.
Power imbalances are not merely operational concerns; they shape how civil society functions. These dynamics are particularly consequential where governments and public institutions are major funders of nonprofit activity, because funding practices can affect nonprofit autonomy and capacity. Funding models often operate as mechanisms of control that shape nonprofit behavior, decision-making, and strategic direction, even without overt coercion. Administrative requirements, such as reporting obligations, performance metrics, and compliance monitoring, can influence how organizations prioritize activities and allocate resources (Mihret & Grant, Reference Mihret and Grant2017). In this sense, funding structures are not neutral; they condition how nonprofits function and the degree of flexibility and stability they can achieve.
Power dynamics are most visible when funders impose restrictions on how resources are used, such as caps on operating costs, compensation limits for staff, or insufficient support for infrastructure (Hunnik et al., Reference Hunnik, de Wit and Wiepkin2021). Such constraints can undermine organizational flexibility by limiting how nonprofits allocate resources, while still requiring compliance with funder expectations (Hunnik et al., Reference Hunnik, de Wit and Wiepkin2021). To meet these demands, nonprofits are pressured to demonstrate hyper-efficiency, reinforcing the nonprofit starvation cycle. This perpetuates the flawed assumption that administrative and overhead spending should be minimized, regardless of long-term consequences (Lecy & Searing, Reference Lecy and Searing2015), yet evidence suggests that strong infrastructure is essential for mission success (Altamimi & Liu, Reference Altamimi and Liu2022). Still, nonprofits often feel compelled to report low overhead in order to compete for limited funding (Lecy & Searing, Reference Lecy and Searing2015), sometimes even against peer organizations (Altamimi & Liu, Reference Altamimi and Liu2022). These pressures can lead to deferred maintenance, neglected infrastructure, and even misreporting, creating a “self-reinforcing feedback loop” that weakens organizational capacity (Gregory & Howard, Reference Gregory and Howard2009). The core drivers, unrealistic expectations, competitive pressure, and chronic underinvestment, contribute to sector-wide fragility (Altamimi & Liu, Reference Altamimi and Liu2022).
Against this backdrop, newer funding approaches have emerged, including relational models like trust-based philanthropy (TBP). TBP advocates for funding relationships characterized by flexibility, mutual accountability, and ongoing partnership rather than compliance and control. The challenge lies in balancing nonprofit reliance on external resources with organizational independence and long-term sustainability. We therefore engage TBP as a sensitizing concept (rather than a normative “solution”) through which to examine grantee–funder relationships and explore how trust-oriented funding practices may be enabled, constrained, or adapted within conditions of resource dependence.
Trust-based philanthropy (TBP)
Philanthropy can reinforce nonprofit dependency and perpetuate structural power imbalances and has often prioritized private interests over community-identified needs (Ahmad & Khadse, Reference Ahmad and Khadse2022). In response, models such as TBP have emerged in both practice and scholarship, emphasizing transparency, mutual accountability, and relationship-building. These principles are enacted through practices like multi-year unrestricted funding, streamlined reporting, and grantee-led priority setting. While positioned as corrective to traditional funding arrangements, TBP provides a useful reference point for considering how practices intended to foster trust, reduce administrative burden, and increase grantee autonomy might alter the power asymmetries and dependencies described in RDT. TBP is intended to foster trust and reduce administrative burden; thus, it may increase organizational autonomy and resilience—key factors in addressing the negative effects of funder-driven power imbalances (Casciaro & Piskorski, Reference Casciaro and Piskorski2005). TBP also overlaps with relational philanthropy, which emphasizes flexibility, shared decision-making, and greater recipient autonomy (Petzinger & Jung, Reference Petzinger and Jung2024). Together, these approaches foreground trust, reciprocity, and long-term relationships as ways of addressing power asymmetries in funding relationships.
Empirical evaluations of more equitable philanthropic models remain limited, despite evidence of emerging resources and tools for practitioners. Examples include initiatives that foster peer collaboration among grantees (Dymnicki et al., Reference Dymnicki, Hooker and Goldberg2021) and community-led funding allocation (CCF, 2022). Existing research has largely documented the intentions, design, or early implementation of trust-based or related approaches rather than established outcomes. Recent Canadian research nevertheless provides emerging empirical insight into these relationships, including that funding is not simply a financial transaction, but a relationship shaped by power, accountability, trust, and organizational dependency (Saifer & Zanoni, Reference Saifer and Zanoni2025). Related research during the COVID-19 pandemic found shifts toward greater collaboration, increased recognition of grassroots knowledge, and rethinking unnecessary funding restrictions (Saifer et al., Reference Saifer, Sidorovska, Litalien, Fontan and Duprez2021).
From an RDT perspective, funding relationships are shaped by unequal access to critical resources, creating dependencies that may constrain organizational autonomy and reinforce hierarchical relationships between funders and recipients (Malatesta & Smith, Reference Malatesta and Smith2014; Pfeffer & Salancik, Reference Pfeffer and Salancik1978). These insights highlight why relational approaches like TBP raise important empirical and interpretive questions about whether and how power asymmetries in funding relationships are reconfigured, rather than resolved, within traditional, asymmetrical funding systems. Our study sought to examine these dynamics from the perspective of nonprofits themselves, situated in a context of community interdependence and resource scarcity.
Methods
Research design
We adopted a Constructivist Grounded Theory (CGT) approach (Charmaz, Reference Charmaz, Denzin and Lincoln2000, Reference Charmaz2014) to examine how nonprofit leaders in the Northwest Territories, within the broader context of Northern Canada, experience and navigate funding relationships. CGT was particularly appropriate given limited empirical research on emerging relational approaches to philanthropy and the understudied nature of grantee-funder dynamics in northern, resource-constrained contexts. CGT emphasizes co-constructed meaning, reflexive interpretation, and iterative engagement with data, allowing concepts to emerge inductively while acknowledging the researchers’ interpretive role. As Levers (Reference Levers2013, p. 4) observes, “[k]nowledge of the observed is constructed rather than discovered.” This orientation aligned with our goal of generating contextually grounded insights based on the lived experiences of nonprofit leaders and the need for an exploratory, emergent approach within a developing area of inquiry (Foley et al., Reference Foley, Timonen, Conlon and O’Dare2021).
CGT does not require beginning with a predetermined theoretical framework. Accordingly, we began the study without an a priori coding scheme. During analysis, and only after inductive category development, we engaged Resource Dependency Theory (RDT) as an interpretive lens to contextualize participants’ descriptions of power, dependence, and resource control. Trust-Based Philanthropy (TBP) was used as a sensitizing concept, offering a general interpretive frame but not defining codes or categories (Charmaz, Reference Charmaz2014).
Sampling and participants
We used purposive sampling (Palinkas et al., Reference Palinkas, Horwitz, Green, Wisdom, Duan and Hoagwood2015) to recruit nonprofit leaders with direct responsibility for funding acquisition, reporting, and funder relations (Executive Directors, Presidents, and Program Directors). In Northern Canada, nonprofits rarely employ designated development or fundraising staff due to limited resources, meaning that senior leaders are directly responsible for ongoing grant seeking and relationship management, and they were therefore best positioned to speak to power dynamics and funding processes.
To identify eligible organizations, we reviewed the Federal Charities Directorate and conducted an extensive internet search, excluding churches due to their distinct financial models. This process yielded 57 nonprofit or charitable organizations in the Northwest Territories with mandates in areas such as health, social services, youth programming, Indigenous-led services, recreation, and environmental advocacy. To avoid real or perceived conflicts of interest in recruiting potential participants, the first author, who previously worked for a grantmaking organization, did not contact any organizations that had connections to their former employer. This left 19 eligible nonprofit or charitable organizations who were contacted following ethics-approved procedures, and from which nine responded and agreed to participate. Participants included seven Executive Directors, one Project Director, and one President/Founder. These nine participating organizations represent nearly half of the eligible organizations contacted within the study’s recruitment frame, a notable level of participation in a context where nonprofit organizations are few in number, often operate with limited staff capacity, and face competing operational pressures.
Data collection
We conducted semi-structured interviews either in-person or online, lasting an average of 40 minutes (30–60 minutes). Interview questions explored leaders’ experiences with grant applications, reporting requirements, funder relationships, operational constraints, and perceptions of trust-based and relational practices. Interviews were audio-recorded with consent, transcribed verbatim, and analyzed using the CGT procedures described below. Participation was voluntary and no compensation was provided.
We selected interviews as the primary method to generate rich, contextualized accounts of how nonprofit leaders navigate funding relationships in an underrepresented geographic and organizational context. This approach was also intended to intentionally amplify the voices and work of northern nonprofit organizations that are often overlooked in national philanthropy and research conversations. All recruitment, consent, and data management procedures adhered to ethics approval granted by the relevant institutional Behavioral Research Ethics Board. A research license was also obtained, as required, from the territorial government where the research occurred.
Data analysis
We analyzed interview transcripts using manual methods consistent with Constructivist Grounded Theory (CGT). Each transcript was read holistically and then coded through CGT’s iterative stages of initial, focused, and theoretical coding (Charmaz, Reference Charmaz2014). Initial coding involved line-by-line analysis to stay close to participants’ language and generate early conceptual direction. Focused coding synthesized these early codes into more analytic categories using constant comparison across interviews. Theoretical coding explored relationships among these categories and supported the development of higher-order conceptual relationships and connections across participants’ funding experiences.
Constant comparison was used throughout the analysis, consistent with Constructivist Grounded Theory procedures (Charmaz, Reference Charmaz2014; Rosenbaum et al., Reference Rosenbaum, More and Steane2016). Early incidents within each transcript were compared with later incidents to refine initial codes (incident-to-incident comparison). Codes developed within one interview were then compared across interviews to assess recurrence, variation, and contextual differences (code-to-code and case-to-case comparison). For example, early references to helpful funders, champions, and positive relationships were compared across participants and progressively consolidated into the broader category of community and organizational empowerment. Similarly, comments regarding repetitive forms, reporting strain, and timeline pressures were compared and grouped into the category of application and reporting make-work. Categories were continually refined, merged, or differentiated as new interviews were analyzed. Analytic memos documented coding decisions, category development, emergent patterns, and reflexive insights, providing an audit trail of the analytic process and supporting the interpretive depth expected within CGT. Consistent with grounded theory logic, we moved iteratively between data collection and analysis, allowing concepts to remain grounded in participants’ experiences until theoretical saturation was reached (Foley et al., Reference Foley, Timonen, Conlon and O’Dare2021).
Using trust-based philanthropy as a sensitizing concept
After inductive coding and category development, TBP was engaged as a sensitizing concept (Charmaz, Reference Charmaz2014). Consistent with CGT, sensitizing concepts provided interpretive points of reference rather than predetermined coding categories. We therefore did not code transcripts using TBP principles. Instead, once participant-derived themes were established, we revisited these themes comparatively to examine where experiences aligned with, diverged from, or contextually extended TBP practices such as multi-year unrestricted funding, streamlined reporting, reciprocal relationships, and support beyond financial grants. This allowed TBP to function as an interpretive lens while preserving the inductive grounding of the findings.
Use of RDT as a post-hoc interpretive lens
We engaged Resource Dependency Theory (RDT) to contextualize how participants described resource dependency, vulnerability, and power imbalance (after inductive category development, and not as an a priori framework). This sequencing maintains CGT’s inductive integrity while situating our data-driven categories within broader organizational theory, without ‘retrofitting’ theory. In practice, this involved returning to developed categories and analytic memos to examine how participants described negotiating funder expectations, administrative burden, flexibility, and organizational vulnerability. We then interpreted recurring patterns of dependence, constraint, and strategic adaptation through RDT concepts related to power asymmetry and resource control. This iterative comparative process helped refine the emerging framework and clarify where northern nonprofit realities both aligned with and extended existing conceptualizations of trust-based funding. This combined analytic process, grounded category development followed by post-hoc theoretical interpretation, allowed us to construct a data-driven understanding of grantee–funder relationships while linking participants’ accounts to existing concepts in TBP and RDT. These lenses supported theoretical interpretation (rather than predetermined coding), and the framework presented later emerged from this iterative analysis and interpretive synthesis.
Theoretical saturation and sufficiency
Aligned with established trustworthiness practices (Lincoln & Guba, Reference Lincoln, Guba, Denzin and Lincoln2000), including iterative analysis, audit trails, peer debriefing, and thick contextual description, we evaluated theoretical saturation according to CGT principles. Sample sizes in CGT vary; what matters is the analytic richness of categories rather than numerical quantity. Our sample reflects the small population of nonprofit leaders available within the study context and included nearly half of the eligible organizations contacted. Consistent with CGT, we assessed theoretical saturation and sufficiency by examining whether additional interviews continued to generate new conceptual insights and whether the developed categories were sufficiently rich in their properties and relationships (Charmaz, Reference Charmaz2014). By Interview 7, no new analytic properties were emerging, and Interviews 8–9 confirmed the stability of the four core categories, adding contextual nuance without altering their conceptual boundaries. Given the limited number of nonprofit organizations in the region and CGT’s emphasis on conceptual depth over sample size, this level of sufficiency is appropriate and methodologically consistent. Together, these observations demonstrate that theoretical sufficiency was reached and contribute to the overall rigor and trustworthiness of our findings.
Researcher reflexivity and positionality
Constructivist grounded theorists emphasize transparency about the researcher’s interpretive role and standpoint (Charmaz, Reference Charmaz2014). The first author previously worked within a grantmaking organization and therefore had professional insight into funding systems, reporting structures, and administrative processes. This positionality offered analytic sensitivity but also the potential for bias. To address this, reflexive memoing was used throughout data collection and analysis. The first author documented assumptions, points of resonance, and divergent interpretations to avoid prematurely imposing prior experiences onto participants’ accounts. Regular peer debriefing with co-authors supported interpretive distancing, challenged emerging assumptions, and strengthened credibility.
Results
Four overarching themes emerged from our analysis of interviews with leaders of nonprofit organizations: (1) community and relationship-centered practices, (2) application and reporting “make-work,” (3) transactional relationships and power, and (4) operational and administrative support. We describe each theme below. We then present participants’ accounts in relation to practices commonly associated with TBP as an interpretive reference point. Additional representative participant quotes are available in Supplementary Appendix A.
Community and relationship-centered practices
This theme pertained to the importance of building relationships, community, and organizational empowerment. When asked what makes a funding relationship work well, some respondents emphasized continuous goodwill and support, reciprocal relationships through partnership, and mutual understanding. In discussing the lifespan of a funding relationship, Organization 5 (O5) said: “You know, [that] goodwill has to extend throughout the course of your funding; it can’t just be when you’re doing the application.” Goodwill was described as extending beyond the application stage. O7 also raised that responsiveness and non-monetary support, such as receiving an IT specialist and accounting system through funders, can significantly enhance organizational capacity. For organizations that have historically lacked such support, this type of relationship can help build long-term resilience.
O9 described partnerships as critical to sustaining a newly emerging grassroots organization, particularly in Northern Canada, where operational costs are high, and newer organizations must often “jump through more hoops” than established organizations and require more funding to operate successfully. They stated:
…so partnerships are the way that we’ve gone to try and get things done. Not always successful, but right now there’s almost not like, [I don’t know] if there’s any other way for us, right? We just have to go with partnerships because, you know, we keep hearing [we’ve] only been here for [a number] years. What’s your budget like? …How much value, they really equate your organization’s value to how much money you run, right? Which I find is, it’s very inaccurate in terms of the services that we provide because we’ve done so much in my perspective without any funding.
Participants also noted the empowering effect of having a direct point of contact or “champion” to guide them through the application process. O1 recalled a relationship that felt fundamentally different from traditional application experiences:
…I remember being on the call and being like they were not asking me questions, but asking me to ask them questions. And I was like this is the wrong way so it was very bizarre for me, but [it’s] a much better [and] much more relaxing kind of application…
A funding relationship characterized by honesty, care, and reciprocity was highlighted by O1. Participants described feeling empowered when funders supported the application process and invested time in understanding and advocating for their organization’s work. They described another funding relationship that had a lasting impact:
They checked in with us, but also in the application they checked in. And then, you know, if something came up I could again. And there was like a good relationship [because] I could just contact [the funder] who was the territorial person and so that was nice… they really cared what the results were…
In Northern Canada, the small population base often creates closer ties between funders and nonprofits. In some cases, funders were previous participants in the very programs they now support. Yet proximity does not guarantee understanding. As several participants noted, many funders are based in southern Canada, particularly at the federal level, creating disconnects with on-the-ground realities in the North. One participant described the importance of community-driven support and empowerment, noting that when awareness of an organization’s impact originates from within the community, it can leave a lasting effect:
…You know, when the community is involved, I find that that’s huge. Like [when] the community knows and sees and takes an interest in what [they are] then they’ll look at it for the years to come…
(O7)Relative to larger urban centers, community empowerment is especially relevant in smaller and remote regions, where nonprofit visibility and legitimacy depend heavily on local relationships. As O7 noted: “…before I started with [my organization], I didn’t even know it existed here… it had [no] legs in the community.” Another participant described how immersive experiences, such as inviting funders to participate directly in programming, transformed relationships and enhanced funder understanding:
…especially our [programming]. I really don’t think our funders understand the depth and the impact that it has. And really, it’s hard to tell them about it, so really, unless they’ve seen it, and when we brought like funders out on the land with us, [it’s] actually been… transformational for our relationships with [funders] because it’s like all of sudden, they get it, and they really support the work we do and they do a lot of…support behind doors. I think once they have that understanding, but without that understanding I feel like they just aren’t able to support us [in] the best way for us.
(O8)Overall, participants expressed deep appreciation for funders who built authentic relationships rooted in mutual understanding and proximity to impact. Relationship-building was seen not only as a strategy for successful grant applications but as a cornerstone of organizational empowerment, supporting more meaningful investment in nonprofits and, ultimately, stronger outcomes for the communities they serve.
Application and reporting “make-work”
Participants’ experiences with application and reporting processes varied considerably across funders. Some described the process as “challenging” or “intensive,” while others found it “amenable” and “straightforward.” However, most emphasized that they were unsure who, if anyone, was genuinely invested in understanding their progress. To remain financially afloat, organizations often apply to multiple funders, leading to burdensome fund tracking and what O4 described as “accounting gymnastics.” One participant shared that processes were so time-consuming they hired external help to complete applications. Others noted that extensive applications sometimes covered as little as 10% of a project’s cost and rarely supported operations or administration. Several participants expressed frustration that many funding opportunities prioritize new projects, even when existing programs have a proven track record and positive results. O3 emphasized how lengthy templates and protracted timelines interfere with “…actually doing […] work in the communities because they are spending too much time writing funding applications.” Participants described cumulative time spent on submissions, reporting, and financial reconciliation as significantly diverting organizational capacity from community-focused work and impact. O5 reflected that: “…building relationships with the funders is more important than what goes into the funding application.”
They and others stressed that deeper funder relationships could improve understanding of shortcomings in current processes, support greater goal alignment, and strengthen funders’ grasp of the community needs being addressed. Nonetheless, restrictive funding criteria often force nonprofits to apply creatively, adapting language and framing to meet requirements, even when their programming remains unchanged:
I mean, we’ve kind of figured out a system for making [it] like we’re reinventing the wheel [in] application when we’re really just doing what we know works, and I mean, it’s really frustrating [to] have to.
[O8]This type of application make-work is time-consuming and complex to decipher and manage. Moreover, operational revenue and programming become piecemeal and fragmented as nonprofits wait for replies or for application intake cycles to begin. O2 emphasized changing funding cycles to match organizational needs and workflow:
I think we need to dismantle those funding cycles because that’s not how life works and I think there’s […] even pretty [well] anyone who receives [type of funding] or [type of funding] has it so drilled in their brains that that is how things have to go.
These funding cycles seem to be ingrained and dictate how nonprofits must design their programming. Participants suggested that changing the “rules” surrounding application intakes and deadlines could provide greater flexibility. O2 pointed to the pandemic as an example, when some funders relaxed restrictions and provided organizations with greater flexibility to maintain operations and retain staff:
… I really, really dislike being set up for failure, and sometimes a combination of timelines or expectations or whatever. I think the last two years [really] funders have been wonderful, like in the first weeks of being shut down. … we have funders calling and say like very specific project funding say like it had to be on [a certain program] say like pay your staff, keep your lights on, do whatever you need to do and that was so wonderful.
Participants’ narratives described streamlining application efforts, transparency, and encouraging conversations with grantees, all of which would shift power toward community organizations providing support to those who need it most. Participants’ narratives emphasized streamlined application processes, greater transparency, and more direct conversations with grantees as ways to reduce administrative burden and strengthen alignment between funders and nonprofit organizations.
Transactional relationships and power
When asked whether funders understand the work they do, nonprofit leaders offered mixed responses. Some felt unsure, some said yes, and others qualified their response such that funders may understand what their organization does, but not the challenges they face, especially in northern and remote contexts. This was particularly noted in relation to southern funders, who were perceived as less familiar with the realities of delivering programming in the North. As O5 described: “I think it’s hard for the people administering funding to see themselves in [this] ecosystem,” highlighting the need for deeper understanding of both context and power dynamics in grantee–funder relationships.
Participants also described the transactional nature of funding relationships, noting that funders were sometimes “checking a box” and were rarely invested in the progress of nonprofit(s) or improvements made in their communities:
It’s more like ‘we just want numbers, we don’t care about what you’re doing. Just give us the numbers that will satisfy our bosses and so yeah, check the boxes. [So] it feels like we just have to produce this kind of report. So, however you get that report done like, just make sure doesn’t matter what you do. It feels dirty.
[O1]Such funding requirements were characterized as “dirty” or “transactional,” and lacking genuine collaboration to identify needs or shared goals. Participants noted that funders typically tracked progress only during the grant period, with little follow-up or interest in long-term community outcomes. The quality of the funder–grantee relationship was often gauged by how much interest funders showed in organizational success and community impact, and whether the relationship was grounded in trust. To further explore this, participants were asked whether they trusted their funders—and conversely, whether they felt their funders trusted them. Responses ranged from “yes” to “no” to “it depends,” reflecting both the diversity and fragility of these relationships. Importantly, trust was not always mutual. These responses underscore visible and invisible power asymmetries that shape grantee-funder dynamics, and varied experiences nonprofits face in navigating them.
Operational and administrative support
Many organizations reported challenges in securing funding for core operations and maintenance. When asked whether current funding structures allowed them to thrive, about half said no. As O2 put it: “We try as much as possible to enter into multi-year agreements [to] limit that amount because it just makes things easier…I don’t see why nonprofit organizations have to keep dancing for their dinner.” This reflected the lean budgets participants described managing, often under pressure to “do more with less,” while attempting to fulfill their missions and retain staff. Participants repeatedly stressed the need for multi-year funding to enable programming continuity and reduce uncertainty. O8 described the logistical burden of managing multiple contribution agreements that restrict how funds can be used:
It can also be pretty frustrating the whole like ‘we want to pay for everything except for you know, you folks having [to keep] the lights on or the ED salary or that kind of stuff…there’s a lot of those kind of restrictions on well, it just needs to somehow magically happen…
Participants described how organizations work to find operational funding that will sustain them while also facilitating growth, investment in their staff, and continuing service to their populations. Yet few funders appear willing to ease restrictions on administrative costs:
It’s the staff members wondering, like how are we going to piece together 25 contribution agreements this year to pay the ED salary or you know any of our staff positions, or to continue being able to offer staff position and benefits that are competitive with other nonprofits and even with the [government], which is …impossible.
[O8]This “creative” budgeting and application writing is time-consuming, and hinders implementation of core programming. Participants consistently identified multi-year unrestricted funding and other forms of support as important for organizational continuity and their capacity to serve communities.
Expanding upon our research question, we considered the extent to which the narratives provided by nonprofits showed evidence of alignment or non-alignment with principles commonly associated with TBP, as an analytical point of reference rather than a prescription. We found notable areas of correspondence between participants’ narratives and practices described in the TBP approach, alongside important divergences shaped by the structural and geographic realities of Northern nonprofit contexts. These patterns suggest both areas of alignment and divergence with TBP principles. We elaborate these implications and present the framework in the Discussion (Figure 1 described below). We also identified contextual gaps and areas in which TBP, as articulated in existing scholarship and practice, does not fully reflect the lived realities of nonprofits in Northern Canada. In the Discussion, we further explain the framework and consider its practical applications, policy implications, and directions for future research across the nonprofit, grantmaking, and philanthropy ecosystem.
A framework for relational responses to power asymmetries in grantmaking.
Fig. 1 Long description
The flowchart is organized into six columns representing a progression from Theme to Systems Change.
Column 1: Theme from Interviews.
Column 2: Subthemes and success factors.
Column 3: Dependency-Driven Problems Observed in Funding Relationships.
Column 4: T B P Principles as Interpretive Lens.
Column 5: How These Responses Manifest in Practice.
Column 6: Implications for Systems Change.
Row 1: Community and Relationship-Centered Practices. Subthemes include personal relationships and mutual trust. This reveals limited decision-making power despite local expertise. T B P principle number 2 Do the Homework and T B P principle number 5 Solicit and Act on Feedback lead to inclusive decision-making and reciprocal relationships.
Row 2: Application and Reporting Make-Work. Subthemes include onerous reporting and intensive application processes. This reveals excessive administrative burden and compliance demands. T B P number 2 Do the Homework and T B P principle number 3 Simplify and Streamline lead to streamlined applications and feedback loops.
Row 3: Transactional Relationships and Power. Subthemes include unrealistic expectations and power dynamics. This reveals one-sided, transactional funder-grantee relationships. T B P principle number 5 Solicit and Act on Feedback, T B P principle number 4 Be Transparent, and T B P principle number 6 Offer Support Beyond the Cheque lead to collaborative partnerships and capacity building.
Row 4: Operational and Administrative Support. Subthemes include stability and spending flexibility. This reveals chronic financial instability and constrained autonomy. T B P principle number 1 Multi-Year Unrestricted Funding leads to long-term operating support and process flexibility.
Final Column: Implications for Systems Change applies to all rows and includes redistribution of decision-making authority, reduced administrative burden, shift from transactional to relational funding, and increased nonprofit autonomy and resilience.
Discussion
We conducted field-based interviews with nonprofit leaders to understand the relationships and power dynamics between funders and grantees. Situated in Northern Canada, our study offers insights into an under-researched region characterized by significant government involvement and oversight, dependence on resource-based industries, and complex multi-sectoral economies (Southcott & Walker, Reference Southcott, Walker and Southcott2015). Using a Constructivist Grounded Theory (CGT) approach, four major themes emerged: community and relationship-centered practices, application and reporting make-work, transactional relationships and power, and operational and administrative support. We also considered how these themes can be interpreted through Resource Dependency Theory, and used practices commonly associated with trust-based philanthropy (TBP) as a sensitizing point of reference to examine participants’ experiences. Building on these analyses, we present an empirically grounded framework that synthesizes patterns observed in the data and highlights key tensions, constraints, and possibilities within contemporary funding relationships (Figure 1). Rather than proposing a novel theoretical model, the framework offers a contextually situated interpretation of how resource dependence and trust-oriented funding practices interact within northern nonprofit environments.
TBP promotes shifting power to nonprofits by trusting their expertise and investing in long-term change (Mitchell, Reference Mitchell2022; TBP Project, 2021). Practices such as “doing the homework” (TBP #2) and “soliciting and acting on feedback” (TBP #5) were echoed in participants’ emphasis on trust, shared goals, and sustained engagement (Theme 1). Similarly, TBP principles such as “simplify and streamline paperwork” (TBP #3) directly address the excessive administrative demands described by participants (Theme 2), which were viewed as mismatched with the capacity of small organizations (Stephen, Reference Stephen2006). Temporary easing of these requirements during COVID-19 (Ayer & Anderson, Reference Ayer and Anderson2022) also illustrated the potential value of greater funding flexibility and was viewed as a model worth sustaining. Participants recommended clearer expectations, plain language, and relational, not bureaucratic, application processes.
Our findings highlight the importance of grantmaking practices that center relationships and organizational capacity. Dymnicki et al. (Reference Dymnicki, Hooker and Goldberg2021) found that funders who invested in capacity and peer learning improved both program quality and infrastructure. This aligns with our findings and broader research emphasizing the value of transparency, trust-building, and intentional conversation (Taddy-Sandino et al., Reference Taddy-Sandino, Ammann Howard and Nascimento2022). While dominant norms often favor productivity and measurement, participants described how taking time to build relationships supports deeper understanding of community needs—consistent with TBP practices such as “offer support beyond the cheque” (TBP #6), which aligns with our Theme 3. Transactional approaches that focus narrowly on metrics and compliance miss opportunities for community impact (Ahmad & Khadse, Reference Ahmad and Khadse2022; Dymnicki et al., Reference Dymnicki, Hooker and Goldberg2021).
Participants also emphasized the need for operational and administrative support (Theme 4). Multi-year unrestricted funding (TBP #1) was seen as essential to reduce uncertainty and sustain programming. Before its temporary expansion during the pandemic, unrestricted funding has often faced resistance from funders, with administrative costs treated as separate from “core” programming (Ayer & Anderson, Reference Ayer and Anderson2022). Drawing on RDT, we interpret these dynamics as reflecting nonprofits’ dependence on funders. This dependence helps explain the reporting burdens, constraints on operational support, and limitations on autonomy in mission delivery described by participants. Transactional relationships that prioritize metrics over collaboration further exacerbate these challenges. Multi-year, unrestricted funding was widely seen as a critical response to power imbalance, offering a pathway toward greater resilience.
However, our findings also suggest that existing TBP literature largely assumes philanthropic environments characterized by discretionary funding, negotiable reporting requirements, and voluntary adoption of trust-oriented practices. This limits direct applicability in northern, remote, and resource-constrained nonprofit contexts, where organizations are often heavily reliant on territorial government funding structured through fixed fiscal cycles, contribution agreements, and stringent compliance regimes. Under conditions of funder concentration and constrained bargaining power, nonprofits have limited capacity to renegotiate funding terms or diversify revenue streams. Although TBP offers a potentially valuable framework for rebalancing power, flexibility, and relational accountability in grantmaking, skepticism regarding unrestricted funding and trust-based approaches persists, including concerns about transparency and implementation (Ayer & Anderson, Reference Ayer and Anderson2022; Goldenberg, Reference Goldenberg2024; Sommer, Reference Sommer2022).
At the same time, scholars and practitioners continue calling for deeper reflection on power within philanthropy and more equitable funding relationships (Keidan, Reference Keidan2022; Taddy-Sandino et al., Reference Taddy-Sandino, Ammann Howard and Nascimento2022). Accordingly, our findings suggest TBP is best understood not as a universally transferable model, but as a context-dependent set of principles whose effectiveness depends on broader funding infrastructures and governance conditions. In this sense, our study extends TBP by conceptualizing trust not only as a relational practice, but as an organizational condition shaped by structural dependency and governance constraints in public-sector dominated funding environments.
This interpretation also reinforces calls within philanthropy for greater attention to power and equity in funding relationships, recognizing that relational reforms may need to be accompanied by broader structural changes (Taddy-Sandino et al., Reference Taddy-Sandino, Ammann Howard and Nascimento2022). Equity-based tools, revised funding policies, and deliberate power sharing mechanisms may therefore represent important complements to trust-oriented practices.
A framework for relational responses to power asymmetries in grantmaking
TBP offers a value-driven articulation of trust-oriented grantmaking practices, yet its empirical grounding and theoretical integration remain limited. Drawing on our data, we synthesize findings into a practice-oriented framework that uses TBP as a sensitizing concept rather than a prescriptive model. Interpreted through Resource Dependency Theory (RDT), the framework examines how nonprofit experiences of funding relationships reflect dependency-driven power dynamics and where relational practices may mitigate, reproduce, or fail to meaningfully alter these asymmetries in practice.
Figure 1 presents an empirically grounded interpretive framework synthesizing participant experiences across the four themes. It traces how participant-derived experiences reveal dependency-related pressures, how these pressures can be interpreted through RDT, and how trust-oriented responses might manifest in practice and contribute to or inform broader systems change. Rather than prescribing universally transferable solutions, the framework highlights how trust-oriented practices may mitigate, but not eliminate, power asymmetries within structurally constrained northern funding environments.
For example, the theme of operational and administrative support highlights chronic financial instability and constrained organizational autonomy, dynamics that RDT attributes to dependence on external actors who control critical resources. Participants emphasized the need for stability, predictability, and spending flexibility in funding agreements, which resonates with TBP’s advocacy for multi-year unrestricted funding. At the same time, participants’ accounts reveal the limits of relational practices in contexts governed by rigid contribution agreements, fiscal cycles, and institutional compliance regimes that restrict organizational discretion.
Viewed through RDT, the framework illustrates how dependency structures create predictable pressures on nonprofits and how relational practices operate within, rather than outside, these structural constraints. Grounded in northern nonprofit experience and informed by RDT, it highlights how resource dependency, institutional structures, and geographic constraints shape the possibilities and limits of trust-oriented funding practices. Rather than treating TBP as a checklist, the framework emphasizes coherence across funding policies, relationships, and institutional expectations.
Implications for research, practice and policy
Our findings contribute to nonprofit research on grantee–funder relationships and power dynamics by empirically grounding resource dependency within an understudied Northern Canadian context and refining understanding of how structural dependency shapes the possibilities and limits of trust-oriented funding practices. We encourage further research on relationship-centered funding models, administrative burden reduction, and the impact of unrestricted funding on nonprofit sustainability and community outcomes. Future work should explore trust-building in funder-grantee relationships by assessing trust-oriented funding practices across diverse contexts, including differences between grassroots and more established organizations.
From a practical standpoint, TBP offers a useful set of principles for rethinking funder–grantee relationships, yet implementation challenges persist (Mitchell, Reference Mitchell2022). Meaningful implementation requires TBP values to be reflected in organizational culture, structures, and leadership practices (TBP Project, 2021). Our findings illustrate how nonprofits experience these principles in action, including changes to funding relationships, grant structures, and administrative expectations. Yet studies show that funders often lack the capacity to fully implement TBP, hindered by outdated systems and limited staff (Ayer & Anderson, Reference Ayer and Anderson2022). There is also a risk of “trust-washing,” where funders invoke TBP language without embracing its substance (Salehi, Reference Salehi2023). Genuine trust-based approaches extend beyond unrestricted grants, requiring a cultural shift toward equitable, collaborative relationships.
Because many of the constraints identified in our study are embedded in funding systems rather than individual funder–grantee relationships, relational change also has policy implications. Sector-wide impact requires nonprofits to have meaningful representation in policy processes, including compensated advisory roles (Stephen, Reference Stephen2006). Amendments to Canada’s Income Tax Act, such as changes to disbursement quotas, aim to increase funds directed to nonprofits (Krynitzki, Reference Krynitzki2023). However, further reforms, such as clarifying funder accountability, could reduce administrative burden while preserving transparency. Regional and national policies should build on such initiatives to advance equity and sustainability.
Conclusion
Our study sheds light on nonprofit organizations’ perspectives, offering place-based insights and extending the conversation on trust-based philanthropy (TBP) through a nuanced analysis of grantee-funder dynamics in Northern Canada, an underexplored yet critical region. Our findings refine and contextualize existing understandings of TBP by examining how empowerment, dependency, and resource precarity are negotiated within small, interconnected northern communities. Rather than advancing a new theory of funding relationships, this study demonstrates how Resource Dependency Theory (RDT) helps explain persistent power asymmetries, while TBP provides a contemporary reference point for considering more relational approaches to funding. In doing so, we reveal the tensions between trust-oriented funding ideals and the structural realities that shape nonprofit practice in Northern Canada.
Drawing on RDT, our analysis underscores how power asymmetries are embedded in funding relationships and how these dynamics influence nonprofit resilience. While TBP proposes relational strategies to address dependency, our study shows how such approaches are variably implemented, resisted, or adapted, demonstrating the importance of context in shaping power negotiations. Grantee–funder relationships are essential to building a resilient nonprofit sector, and when values and goals align, both funders and nonprofits can maximize their impact.
Supplementary material
The supplementary material for this article can be found at http://doi.org/10.1017/S0957876526000902.
Acknowledgments
This study was conducted in Yellowknife, Northwest Territories, on Chief Drygeese Territory, the traditional lands of the Yellowknives Dene First Nation and the North Slave Métis. We recognize and acknowledge our position as settler-Canadians as we conducted research on Dene and Métis lands. We are constantly learning about our roles as researchers, and for one member of our team who resides and works on these lands, we are grateful for all the knowledge and experiences we have gained during this study. We are committed to guiding our actions with respect and building relationships and partnerships in a good way, and acknowledge the importance of the land, our shared history, and honor the ancestors that came before us.
Funding statement
This research received no specific grant from any funding agency in the public, commercial, or non-profit sectors.
Competing interests
The author(s) declare none.
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