One way that you can maximize impact is by joining forces with fellow philanthropists who share your goals and vision. Philanthropic collaboratives empower like-minded donors to share learnings, strategize on social impact efforts, and potentially even pool their financial resources to address a charitable cause.
What are funder collaboratives?
Individuals or institutions typically form joint-learning or funding collaboratives to align their philanthropic giving based on shared long-term goals, geographic areas of interest, beneficiary populations, or some other commonality. In addition to distributing risk among participants, funder collaboratives are also more likely to reach the intended scale or level of impact more quickly than a single donor could on their own.
What are the different types of funder collaboratives?
Funder collaboratives can be categorized into three types:
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Learning networks create a platform for donors to exchange information and come together to explore a particular issue or problem, learn from each other’s experiences, and explore best practices. This collaborative has the lowest activation barrier since each member benefits from shared insights while retaining their complete independence in philanthropic decision making. These networks are usually structured as loose associations that provide access to an online or in-person community with no substantial expectations or accountability requirements for any one member.
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Example: The Biodiversity Funders Group offers peer-to-peer learning opportunities for funders interested in protecting the quality and diversity of life. The collaborative hosts annual meetings, regular seminars, and conference calls to provide members updates on the issue area, share information, and explore potential strategies for effective investments.
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Strategic alignment networks offer issue-aligned and/or like-minded donors the opportunity to coordinate their philanthropic efforts to respond to common issues. Since these collaboratives are cause-focused, members may include funders and other stakeholders involved in the issue area. Members of these networks can work together to develop complementary strategies or align their grantmaking activities to maximize their collective impact on the issue in focus. Participating in a strategic alignment network can minimize the risk of duplicating efforts.
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Example: Big Bang Philanthropy is a group of like-minded funders focused on solutions for entrenched poverty. While each member makes independent decisions regarding their philanthropy, they share a commitment to contribute at least $1 million per year to poverty solutions in developing countries and fund at least five organizations creating and scaling tangible impact. Members also share leads, insights, networks, and due diligence with each other to facilitate effective philanthropy.
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Pooled funds allow donors to contribute to a collective fund that is administered by a lead donor or a third party. Contributing to a pooled fund can help de-risk your investments by sharing the risk with other funders. This collaborative requires a level of trust and programmatic agreement among participants, which can be difficult to achieve. Therefore, pooled funds usually operate in a more structured approach where members establish partnerships with clear governance and investment requirements.
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Example: Blue Meridian Partners collaborates with investors and social sector leaders to identify, fund, and scale up the most promising strategies to promote economic mobility for young people and families trapped in poverty. Its funders include eight general partners who commit at least $50 million over five years and six impact partners who commit at least $15 million.
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What are the advantages of funder collaboratives?
Participating in funder collaboratives can provide you access to reliable information and connect you to a network of like-minded philanthropists and experts in your issue-area(s) of interest. Collaborating with other peers can also support more thoughtful decision making by exposing you to diverse views and opinions. As a part of a collective, you can magnify your impact and catalyze more philanthropic investments.
How can you join an existing funder collaborative?
Look for options that align with your philanthropic interests. Before making a firm commitment, take the time to ask probing questions and assess whether the collaborative’s activities and requirements align with your objectives. Lines of inquiry should include the collaborative’s decision-making processes, commitment requirements and timeline, and metrics for evaluating success. While donor education offerings and giving circles are potential partnership options, high-capacity philanthropists are more likely to benefit from curated programming from a source that they already trust.
How can you start a funder collaborative?
If you’d prefer to develop your own funder collaborative, let your network and potential partners know. Map out potential stakeholders, matching their needs and personal preferences to the types of possible collaboratives. Joint efforts can start with two to three philanthropists and then grow organically. At the onset of this effort, work with the group to articulate your collective vision, set clear expectations, and identify metrics of success. Remain flexible to leave room for learning, adaptation, and evolution. A learning collaborative could eventually grow into a pooled fund, so anticipate some natural growth and don’t feel obligated to formalize the collaborative’s structure or processes right away.
What pitfalls should you avoid when working with a collaborative?
Formal, pooled funding collaboratives can be labor-intensive for individual philanthropists who often have less staffing and infrastructure resources than institutional funders. With that said, establishing a collaborative is likely less taxing than operating your own philanthropic program. Members of pooled funding collaboratives should be proactive in seeking alignment and addressing common challenges among fellow participants, including:
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varying appetites for risk
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approaching measurement and evaluation
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reporting expectations
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commitment duration
One Final Note about Partnerships:
Collaboratives should not be forced. They will only be successful if each contributor is genuinely committed and engaged. It is better to wait for the right funding partner than to rush into a pooled funding partnership that is misaligned with your philanthropic vision.
Additional Resources:
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Pooled funds from a collaborative must be housed somewhere before distribution, and fiscal sponsors are a popular vehicle to provide fiduciary management for this purpose. Consider your options and assess whether this structure is right. This Nonprofit Quarterly article has more.
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This inquiry set from the Sustained Collaboration Network could help funders in a decision to launch a new collaborative or initiative.