There is a trend towards greater collaboration among philanthropic organisations. More foundations are pooling resources and working together to achieve impact at the scale of the problems we tackle: from climate change to poverty. But do funder collaboratives deliver more impactful results?
The short answer is ‘yes,’ according to new research called ‘Are Funder Collaboratives Valuable? I can also confirm this based on my experience as the Director of the Environment Programme at Oak Foundation. For the past 18 months, I have been working alongside a steering committee of philanthropic leaders to support this research, which draws from a survey of nearly 100 funders and more than 300 grantees who have participated in ten funding collaboratives. The study also reviewed fifteen collaboratives that have experienced major challenges. Ultimately, the research yielded insights about what contributes to collaborative funding success for both funders and grantees.
Oak Foundation has collaboration built into our genes. In principle, we do not fund more than half of a project’s budget or contribute more than 20 percent of a not-for-profit’s annual budget. These principles help our grantees avoid over-relying on one source of funding and inspire us to actively collaborate with other grant-makers to become partners. In the Environment Programme, for example, we are involved in at least 15 collaboratives. In these collaboratives, we cultivate a culture that cares immensely about being bold, diverse and not afraid of failure.
Overall, about a quarter of all funds disbursed by Oak in a year goes to intermediaries — or re-granting mechanisms — the great majority of which are donor collaboratives. Given the importance of donor collaboratives in our business model, we were excited to work with others to research their impact.
Among the key insights for funders, survey respondents reported that collaboratives enable deepened field expertise, leading to more strategic, informed and effective investments. Collaboratives have a unique field-changing power to achieve specific results, such as successfully advocating for policy changes or making rapid-response grants. An impressive 94 percent of the funders agreed that their collaboratives were an overall success, and 93 per cent agreed they are on track to reach their goals.
One of the most interesting insights from the research is that collaboratives tended to be most successful when they articulated a clear purpose for achieving impact. The three purposes that emerged include:
- ‘Organisation Funders’— to support strategies and attract more resources than individual funders could alone by putting grantees front and center.
- ‘Field Builders’ — to enable organisations to more effectively carry out their strategies by changing a defined field or set of practices.
- ‘Goal Aligners’ — to coordinate strategies towards winnable milestones by identifying areas of strategic overlap and developing coordinated giving approaches.
The study also provided valuable insight into how collaboratives and grantees can work better together. Grantees (80 percent) reported that the benefits to participating in a collaborative outweighed the costs. However, grantees had valuable suggestions for improving the collaborative-grantee experience. Specifically, collaboratives have the potential to: promote grantees more actively; facilitate increased input from grantees into setting strategies; and streamline funder reporting.
The top reasons for failure include: a) misaligned goals among donors; b) failure to translate high-level goals into time-bound milestones; c) and inability to adapt to changing circumstances and provide timely responses.
This research starts to fill a gap in the literature on what makes for effective philanthropic collaboration. As more funders form and enter into collaboratives to realise their many benefits, I would highly recommend using this research as a tool to anchor strategy-setting conversations and inform decision-making.
Leonardo Lacerda is Environment Programme Director at Oak Foundation