Foundations often expect nonprofits to collaborate, yet they less frequently turn that expectation on themselves. There is tremendous opportunity to exponentially expand the impact of your grantmaking through funder collaboration. If you’re just getting started in exploring collaboration, or want a refresher, here’s a quick look at the basics:
What are the types of funder collaboration? Funder collaboration comes in all shapes and sizes, but in general there are three primary types:
- Shared learning. Funders come together to learn about latest topics and share experiences in a particular area of interest.
- Strategic alignment. Funders learn about and support various aspects of a shared agenda, such as a systemic change in a field or laying the groundwork for policy change, but each funder maintains its own separate funding activity.
- Pooled funding. As the name suggests, collaborating foundations all contribute funds to a single fund for grantmaking.
With whom can funders collaborate? Foundations can collaborate with all types of funders: local, state, or national foundations; donor-advised funds; individual philanthropists; funder networks; government agencies; corporations; universities and school districts; and nonprofits, to name just a few.
What are the benefits of collaborating?
- Learning. If you are exploring or just starting in a new funding area, collaboration with other funders gives you a seat at the table and an opportunity to learn from your colleagues, deeply and quickly.
- Enhancing reputations. Foundations can benefit from the reputation of other funding partners, as well as their connections. For example, when a large national funder collaborates with a small place-based one, the small funder gets a boost in perceived importance while the larger one earns a local seal of approval.
- Expanding funding. Foundations pooling their resources obviously can increase the total dollars available to support the specific effort. But this combined funding can also open the door to long-term, sustained funding from other public or private sources.
- Signaling importance. When a group of funders get together to focus on a single issue, people take notice. For example, a joint investment in an up-and-coming program, a collective public statement, or jointly funded research all can raise awareness and attention for an emerging need or a promising solution.
- Creating safety in numbers. When your goals involve risk taking, such as taking a stand on a controversial issue, advocating for policy change, or tackling an emerging need that doesn’t have a lot of best practices and playbooks to follow, it can help to have the cover of other foundations doing it with you.
- Leveraging nonfinancial resources. Foundation collaborations bring more than money to the table, including staff talent, research, knowledge, contacts, relationships, administrative help, and physical space.
- Building a better mousetrap. Various funders coming together to meet a community need ideally bring a variety of knowledge and connections that result in a whole effort far greater than the sum of its parts.
- Deepening impact. Ultimately, your collective efforts should result in greater impact than if you funded alone, and the return on investment should be far more than if you had done the work alone. When the dust has settled, a good collaboration ends with deeper levels of engagement and support among community stakeholders and key institutions, a sustainable change in policy or practice, a more pervasive understanding of the issue at hand, and, most important, true and lasting change for the better.
What are the risks? From my perspective, the risks of funder collaboration boil down to loss of control (or a feeling of loss of control). You might need to come to mutual agreement with others about the priorities, how you will work together, funding commitments, time commitments, and so forth.
What can you do to ensure that your collaboration is a success? Here are four things:
- Communicate early and often. Lack of communication can prevent your funding collaborative from getting off the ground, or send it off course. You need to clearly communicate the goals and strategy, but it also helps to have a plan for keeping each other in the loop, documenting decisions, and communicating with external partners.
- Set clear expectations. Be clear about the shared purpose and distinct roles of the collaborators. Discuss these expectations at the beginning and throughout the partnership – roles may evolve as needed.
- Don’t go off mission. partnerships with other funders should help you advance your mission, not take you off course. Take time to weigh the opportunity against your existing priorities to determine whether it’s the right fit.
- Keep it simple. Funders seeking to collaborate should strive to make the complex simple, rather than the simple complex. Focus on the “why” at the partnership level, and leave the “how” up to individual partners as much as possible.
There are many different aspects of collaboration, and being a good collaborator is a skill funders develop over time. Don’t let uncertainty hold you back. Working together with other funders is one of the most effective ways to create impact – so get in there and collaborate!