5 Tips for Setting up Successful Funder Collaborations
Helping to fund a philanthropic organization has many different moving parts that demand time, attention and passion. What does it take to manage a successful collaboration amongst philanthropic funders? It’s essential to consider as more funders pursue partnerships to support social issues across the globe. Collaboration is at the cornerstone of supporting larger social agendas, addressing systemic challenges and difficult issues, while understanding that we are deliberately working with others.
However, both funders and organizations have to consider if all collaborations are strategic uses of their time. It’s essential that both parties align on their goals before becoming involved in a philanthropic endeavor. Here are some steps to take to ensure successful funder collaborations.
1. Align Funding Structure with your Foundation’s Goals
During the beginning stages of collaboration, critical areas of focus of the initiative include coordination in funding and a knowledge exchange with partners who have individual grant-making rights. It also should consider co-investing in an existing entity that involves a framework for common goals, networks, resources and knowledge. Both parties may also focus on creating a new entity with a leader who paves the way for learning. Funding existing funders requires another shared strategy and leadership so major organizations can re-grant pooled money. The latter three areas are high-stakes collaborations and are mainly reserved for highly strategic deals. However, all five categories can be used to consider collaboration and whether that structure fits the purpose that both parties envision. Finding the right structure within the proposed partnership can help donors more effectively and quickly come to conversations on governance and operations.
2. Consider the Cost-Benefit
Cost-benefit decisions should be top of mind when opportunities fall outside of strategic or program areas. For example, some investors may invest in collaborations, even if the process investors are advocating for lies outside the stated goals of that organization. So if investors are focusing on teaming up with a food bank, they may invest in movements that focus on improved housing for the homeless since both issues are inextricably tied. Focusing on areas that could benefit from policy change in which the foundation has an interest can greatly help that foundation. Although it's a high-stakes investment, the foundation can reduce the risks by working with funders that have significant experience and with whom they have built strong relationships.
3. Stay Flexible on Decision-Making
Collaborative structures also need to be flexible and adapt to changing circumstances. For example, the NGO ClimateWorks started with a structure that required all its funders to agree on investment goals. However, the foundation and many of its donors gradually advocated for more flexibility. Although collaborative partners wanted to align their goals with the climate change commitments for the organization, they also wanted more flexibility in the way their funds were directly distributed. The second incarnation of ClimateWorks moved toward a model that paired joint and individual funding decisions. This new structure also attracted additional donors to their cause.
4. Negotiate Roles of Collaborating Partners
Some collaborations that hold small financial commitments require significant work time from program staff. Often, successful partnerships show that much staff time is necessary to foster successful collaborations. One major decision centers on whether to initiate and lead collaborations or follow others. Foundation program staff can decide on a few factors, including the foundation’s level of expertise, staff availability, and how invested the organization wants to be when influencing strategy. Many collaboration participants make decisions by consensus. In these instances, it’s important to determine distinct roles for each funder. It can often be efficient for one funder to take the lead, while the group can also assign other roles. For example, one donor may manage scheduling while another handles communications. Yet another can stay in charge, focus on their strengths and balance their efforts.
5. Be Forward about your Exit Strategy
It’s essential to clarify how much time all donors want to commit to the organization and how each partner can leave the collaboration with minimal upset. Many collaborations have mixed approaches to exit plans. When funders are upfront about their exit plans, transparency plays a valuable part in subsequent investment-making decisions and conversations with the other participants. Developing a clear and specific exit strategy allows any partner to leave without hassle or upsetting the current process. It enables partners to discuss the exit without fear of signaling limited support to other funders or program beneficiaries.
Collaboration with these approaches means funders can amplify their cause and its resources, while proving effective in their impact. Every collaboration is different, but these guidelines to making collaborative decisions can help lead funders in the right direction and achieve their goals.
