The number and use of funder collaboratives has accelerated in the U.S. in recent years because foundations believe that working together and pooling resources allows them to achieve greater and more substantive outcomes.
A new study released this week by the Bridgespan Group (and partially funded by my organization, the Ford Foundation) provides evidence for this theory, but, notably, also surfaced some downsides for grantees. Philanthropy would do well to take their concerns to heart so these collaboratives can achieve their full potential impact.
Foundations that participated in the study report very positive experiences with their donor collaboratives, with 94 percent describing their collaborative as an overall success, and 92 percent saying the benefits outweighed the costs. The organizations receiving grants from these collaboratives were somewhat less enthusiastic: Eighty percent say the benefits outweighed the costs.
So why this gap between donor and grantee satisfaction?
For starters, grantees cautioned that collaboratives can diminish their ability to make all-important direct relationships with individual foundations, and do not always result in simpler reporting or greater resources —especially the kinds of support that strengthen their organizational capacity and effectiveness. More significantly, grantees raised concerns that collaboratives tend to concentrate funding on a few organizations, and can risk disrupting the broader ecosystem of organizations working on an issue.
Addressing these challenges will require funders to change our own behaviors around collaborative grantmaking. We must take evidence-based steps to improve the grantees’ experience and to help them become stronger organizations in their own right. And we must do it with intention. Otherwise, it will not happen. We know it is a lot harder to change our own behaviors than to give grants to others to change theirs.
Based on the Bridgespan analysis and the Ford Foundation’s own experience participating in numerous funder collaboratives, I recommend the following steps donors can take to improve the grantee experience.
First, for this form of philanthropic giving to fulfill its potential, we can structure grants as multi-year, general operating support that specifically includes a component for organizational strengthening. This is a high-impact practice that is too rare in philanthropy: Only 20 to 25 percent of grant funding goes to general operating support. If we look at the evidence and listen to grantees, we know that organizations are better able to deliver programmatic results when they have the flexibility that general support provides, and can also adequately invest in core capacities—things like information technology, leadership development and adequate operating reserves. Collaboratives should make it easier for funders to experiment with making these types of grants and to learn lessons they can apply to their broader grantmaking.
Second, collaboratives can reduce the risk of a “winner-take-all” result by deliberately taking an ecosystem approach to projects where we are expecting “move-the-needle” outcomes. By this, I mean we can take the time to better understand the landscape of organizations in a given area of work and invest in strengthening networks and creating pipelines that prepare smaller and/or newer organizations to secure funding or participate in granted projects.
Finally, we must take seriously the lessons offered by the Bridgespan Group for structuring collaboratives for success, namely: Develop a clear investment thesis; set goals for which the collaborative will hold itself accountable; and most important of all, make sure there are shared expectations and explicit norms.
To achieve this, I believe collaboratives need to go slow at first in order to go fast later. Many times, in the rush to a public announcement, collaboratives skip over the time it takes to do this foundational work. If collaboratives focus on building trust and set a realistic timeframe for impact, they have a good chance of staying the course.
In this way, collaboratives can be a powerful antidote to the debilitating tendency of individual foundations to change strategies mid-stream. The Center for Evaluation Innovation found that of 55 staffed foundations that devote resources to evaluation, 68 percent had engaged in an organization-wide strategic planning or refresh in the last two years; 59 percent had changed priority issues within their program areas.
Collaborative funding is an important and exciting way for philanthropy to have meaningful impact, so let’s pay attention to improving it so everyone—from our grantees to the people and communities we all support—can receive the maximum lift from these funds.
Hilary Pennington is the Ford Foundation’s Executive Vice President for Program.