Funder Collaboratives: 5 Things Nonprofit Professionals Should Know

Created By: Craig Shelley, CFRE
December 2, 2022

Successful fundraisers learn to understand the markets in which they operate. This is a key principle of the business of philanthropy. Funder collaboratives are transforming the way nonprofits are funded. A few years ago (before the split), Bill and Melinda Gates wrote:

“Historically, philanthropists have put a limit on their impact by working alone. But that’s starting to change. Groups like the Audacious Project, Co-Impact, Blue Meridian Partners, Lever for Change, and the Climate Leadership Initiative are making it easy for donors to pool their money and share their expertise. They can absorb large grants—from $10 million to $100 million or more—and fund really smart solutions to big social problems like poverty, education, and climate change.”

Here are five insights into funder collaboratives, defined by Rockefeller Philanthropy Advisors—a pioneer in the field—as a “model in which funders (and sometimes other participants) join forces to work together toward a common goal”:

1. Collectives are changing philanthropy. The manner in which donors donate can affect the destination and scale of their giving. A recent paper published by Bridgespan asserts, “The number of collaborative giving platforms has grown, as has annual giving” and finds over $2 billion flowing through these channels (“and that’s just from the funds who responded to our survey”). When funders get together, and especially when they co-invest, their investments may become less evenly distributed. That is, the “winners” might win even bigger.

2. Not all collaboratives are alike. According to the Milken Institute, there are at least three different kinds:

• Learning networks such as the Biodiversity Funders Group, which reinforce member effectiveness through peer-to-peer education, meetings, regular seminars, and conference calls. While members retain independence about where and how they give, these forums allow them to influence each other, which can have the effect of steering more dollars to fewer organizations.
• Members of strategic alignment networks such as Big Bang Philanthropy develop complementary funding strategies or align their grantmaking activities. Even if they aren’t giving together, they rally around shared approaches and common heroes.
• Pooled funds such as Co-Impact, Convergence Partnership, and Blue Meridian Partners make truly collective grants, which are administered by a lead donor or a third party. When program officers from different foundations collaborate with each other, along with individual philanthropists, academics, and other experts, their investments have to meet with approval from most or all of the participants. Often, they think in terms of placing “big bets” on social or environmental solutions.

3. Foundations and philanthropists join collaboratives in order to magnify impact. This can include catalyzing more philanthropic investments. Five Guidelines for Successful Funder Collaborations, an article published in the Stanford Social Innovation Review, is useful for development professionals who want to walk a mile in the shoes of donors opting for this approach. (Another recommended read from the same publication: How Philanthropic Collaborations Succeed, and Why They Fail.) Clear governance and mutually agreed-upon rules help ensure equitable collaboration. When one partner or member is able to make the biggest donation, does that mean they can direct the overall strategy? Development professionals may not have a view of these dynamics, but it may be useful to understand that they exist.

4. Want to attract the attention of a collaborative? Two seemingly contradictory recommendations:

• Learn to stand out. A compelling mission, a well-executed strategy, and proven impact will appeal to collectives just as they appeal to the separate members. Many donor collaboratives are especially attracted to organizations and leaders with unique access or proximity to the issue—whether it’s domestic or international. Thought leadership, through published writings, speaking appearances, or social media, can give a collective member information and resources to share with the others.
• Learn to collaborate. Getting noticed by funders is important, but not to the extent of treating other organizations as competition. Instead, find ways you complement each other. Achieve scale and sustainability together. Join up in pursuit of that big idea. These joint projects may resonate with collectives, which, after all, are thinking collectively, too.

5. It’s (still) all about relationships. People give to people. The fact is, a funder collaborative probably won’t fund your nonprofit unless one of its members is already supporting you, and then they need to champion you with their fellow members. Traditionally, development departments have one team for major individual gifts and one for institutional or foundation giving, but funding collaboratives may compel intra-organization collaboration like never before.

Ignoring funder collaboratives isn’t an option. Understanding them and the goals of funders who join them will help development professionals navigate the philanthropic landscape in which these entities play an increasing role.

Looking for support to launch or manage your next fundraising initiative? Reach out to Orr Group to understand how we can help you achieve your philanthropic ambitions.