Donor Collaboratives

/

Sometimes, when people use the term “donor collaborative,” they just mean two or more funders working together. But increasingly, the term is used to refer to a more formalized multi-donor, combined grantmaking fund that is time-limited, organized around an agreed-upon governance structure and grantmaking strategy, and usually housed at an intermediary organization (although also commonly hosted by the largest donor organization). 

In its most basic form, a donor collaborative is any group of funders working together to increase their impact. Sometimes, this is also called a collaborative fund, pooled fund or a group fund. Donor collaboratives come in all shapes and sizes; they can be as intimate and short-term as a group of friends who form a giving circle or as large and long-term as the Energy Foundation, started in 1991 by Pew, Rockefeller and MacArthur foundations and now funded by about two dozen major foundations and major donors. Usually, the term is applied to a group of grantmakers who recognize that they share a common focus, that their shared goals are more easily achieved by combining resources, and who develop a shared grantmaking structure to serve the function they have in mind.

In addition to pooling funds, many donor collaboratives also bring donors together to learn, share insights and develop strategies. But donor collaboratives are distinct from funder affinity groups, which exist primarily to support funder learning and networking needs and don’t usually engage in grantmaking (although sometimes, they do operate collaborative funds themselves). They are also distinct from intermediaries, which often host or initiate collaborative funds, but which are established nonprofit organizations with their own boards of directors separate from the governance of their collaborative funds and that pursue a wide range of long-term goals. 

Why fund through a donor collaborative? 

There are donor collaboratives focused on just about every issue or community you can think of. The Fund for a Safer Future is a national collaborative of funders who are pooling expertise and making grants to reduce gun violence. The Families and Workers Fund was initiated by Ford Foundation and brought together a dozen major funders and smaller donors to distribute $50 million “to deliver good jobs and a more inclusive and accessible social safety net” as the nation recovered from the COVID-19 pandemic. The non-time-limited Women Donors Network brings together progressive women funders to learn how to be more effective donors and to make grants. 

Funders of all types and sizes participate in donor collaboratives, from small-scale individual donors to the nation’s biggest foundations. Some donor collaboratives are established for the long haul, and others come together for a targeted purpose over a specific period of time. 

There are a number of reasons you might want to participate in a donor collaborative: 

  • Achieving more than you could individually. Even the biggest funders recognize that working together through collaborative funds can maximize the impact of their giving on an issue of shared concern. For example, large funders, including the Chan Zuckerberg Initiative, the San Francisco Foundation, and the Hewlett and Packard foundations, are among the members of Partnership for the Bay’s Future, a collaborative focused on the hugely complex issue of housing affordability in California’s Bay Area.

  • Joint learning. Whether you are already well-versed in an issue or are just beginning to learn, it is always beneficial to expand your knowledge of the issues you want to address with your giving, the nonprofits working in the field, philanthropic best practices and emerging grantmaking opportunities. Some donor collaboratives offer structured programs for funders to learn together, from webinars to guided funder tours. And some giving circles create their own opportunities for peer learning, such as a reading group focused on the circle’s priority issue.

  • Joint strategy development. Many pooled funds hosted by philanthropic intermediaries have thoughtfully developed grantmaking strategies. So if you want to give to preserve democracy, instead of giving in a scattered way to a handful of nonprofits, you could contribute to a pooled fund where experts in that field have already devised a strategy to make sure grants go where they are needed most and where they can make the greatest impact. Some donor collaboratives are formed specifically so that leading funders in a given area can pool their financial resources and their expertise to engage in strategic grantmaking together.

  • Deeper funder networks. Participating in a donor collaborative is a way to connect with like-minded funders and become part of a philanthropic community. The collaborative might organize events, send out regular updates, and offer other opportunities for you to meet and collaborate with other funders who want to make a difference on the issues you care about. 

  • Shared power and responsibility. Donor collaboratives, by their nature, shift decision-making about individual grants toward the combined governance leading the fund. That is a slight shift in power away from the donors and foundations contributing the funds. For some donors working on especially thorny or controversial issues, that can be especially positive because the donors can maintain some plausible distance from the awarding of funds to particular organizations and their foundation is not directly funding potential lightning-rod initiatives. 

  • Catalyze more funding. The announcement of a new collaborative fund for a specific goal can bring out more funder interest and commitments in an area than would have otherwise been dedicated to that purpose. An impressive number of donors joining a collaborative fund can signal positive movement on an issue that inspires more donors to get on board.  

Pros and Cons

Combining resources with other donors has advantages, but just like any group activity, there are some tradeoffs: 

  • Varying levels of influence on strategy. Every donor collaborative sets up its own governance structure and rules for making decisions. Sometimes, the biggest donors have the greatest influence on the rules and the smaller donors are just along for the ride or have limited influence. In some collaboratives, every donor has the same vote regardless of the size of their donation. Sometimes, funders contribute to the fund and equally set basic strategy, but then hand over day-to-day operation of the fund to professional staff of the intermediary organization. If you’re considering joining a donor collaborative, know what governance structure you’ll be walking into, or if still being formed, know how decisions about governance will be made. 

  • Donors still have the power. There are some charitable funds that are controlled by leaders of marginalized communities, and donors (large or small) simply give their donations and let those leaders make grantmaking decisions. But with most donor collaboratives that have governance comprising representatives of multiple foundations and major donors, the locus of power still resides away from affected communities. While power is somewhat diffused by the number of funders, the collaborative might reproduce the opaqueness and power dynamics of the foundations from which the donations emanated. 

  • Potential disagreements. Even if a transparent governance structure is established and agreed upon early in the process, things can get choppy. Donors often have different perspectives on things that arise unexpectedly over the course of the initiative, such as varying appetites for risk; how to approach measurement and evaluation; reporting expectations from grantees and the intermediary managing the fund; and how long to keep the fund going. 

  • Time up front. Joining a collaborative fund can save time in your own grantmaking in the long run, but getting to agreement on governance to avoid later conflicts can take a lot of time at the beginning. Collaboratives can be especially labor-intensive for individual philanthropists who often have less staffing and infrastructure resources than institutional funders. 

Taking Action

Different donor collaboratives will have different expectations and requirements. Some are open to contributions of all sizes, and others might have minimum contributions. Some are open to anyone who wants to participate, and others are designed as collaborative projects of major funders who are invited to participate. If there is a donor collaborative that interests you, check out their web page, learn about any requirements and get in touch with its leaders. 

To find donor collaboratives working on issues you care about: 

  • Check out Inside Philanthropy’s donor briefs about giving for specific issues, which often mention intermediaries that host pooled funds.  

  • Read IP’s State of American Philanthropy report on the issue. Key donor collaboratives in the field will likely be highlighted there. 

  • Do a web search for “donor collaborative,” “pooled fund,” or “intermediary” + the issue you are interested in funding. 

  • Ask your local community foundation or DAF host if they know of any donor collaboratives working on the issue. 

  • Look at the websites or annual reports of nonprofits whose work you admire. Check the funder lists for any donor collaboratives that support them. A donor collaborative or pooled fund that is already giving to a nonprofit you want to support is probably also giving to other nonprofits that are making a difference on that issue.

  • Read IP coverage of donor collaboratives you’re interested in using the Search tool.

  • Read the collaborative’s website, annual report and other materials. Does it seem like a good fit, in line with your philanthropic values and priorities? 

Once you find collaborative funds that are making grants to the kind of work you want to support, get in touch with its leaders and start asking questions about:

  • How the collaborative has established its governance structure. Who makes decisions and how? 

  • How does the collaborative describe its values, strategy, methods of measuring impact and how it integrates new funding partners?

  • What timeframe is the collaborative working on? Is it indefinite or trying to accomplish key goals within a set period?

  • What is the collaborative’s orientation toward public transparency, and how are individual funders named or not named in outward communications?

  • How does the daily leadership of the collaborative communicate with donors? What level of interaction is there among the donors?

  • Does the collaborative have procedures to resolve disagreements among donor organizations on strategy or grantmaking priorities?

  • Does the collaborative give power or solicit input from non-donors, specifically the communities where it aims to have impact?