The Need for True Collaboration Among Funders
Last month, VPP staff brought together a group of funders to hear from the nonprofits in our youthCONNECT initiative. It was your typical two-hour, Friday-morning event, but I could feel the electricity in the air grow as the program continued. Representatives from our six nonprofit network partners answered audience questions on collaboration, evaluation, and replication, and each of their answers showed the immense dedication these individuals have to improving the lives of youth in the National Capital Region.
I’ve written before about the benefits for children and youth when nonprofits work together on common outcomes, and we saw how the first buds of those benefits are emerging at our briefing last month. Our youthCONNECT network will make a substantial impact on the region through our nonprofit partners, but that is only one side of the network equation. As I looked over the audience of about 30 people, I was reminded of the incredibly deep collective power and reach on the other side of the equation: Funders.
At the event I announced the first six match funders in youthCONNECT, three of which had representatives in the audience. In addition to the $1 million in match funding for our network partners, these match funders bring their own unique areas of expertise to the network and their own connections, which could potentially have a greater impact on the work of the network than any dollar amount. They have all signed on to youthCONNECT for different reasons, and their individual passions, expertise, and networks will bring youthCONNECT to places we could not reach alone. (You can see these different reasons in the testimonies from three of our match funding partners on our YouTube page: Citi, FreddieMac Foundation, and the World Bank Group.) In fact, some of these match funders had previously invested in nonprofits in youthCONNECT in ways that prepared them for becoming SIF subgrantees. For example, our two newest network partners, Metro TeenAIDS and Urban Alliance, were grantees in the World Bank Group’s East of the River Initiative, where they received support to develop their performance measurement and evaluation capacity.
Funders do a lot of talking about collaboration to their grantees, but few truly walk the walk. All issues and recommendations about collaboration focused on nonprofit service organizations can and should be applied to funders themselves. In a climate of constrained resources, organizations, even foundations, often “retrench” and become more isolated, even though survival may very well require us to form new alliances and partnerships. But as Viki Betancourt of the World Bank Group said, we all have egos. Egos, fear, and mistrust often get in the way of collaboration, regardless of whether the nonprofit is a service provider or a funder of service providers.
No one benefits from silos. Narrowly focusing on our own specific objectives ultimately causes us to miss opportunities that could help us achieve our missions more quickly and with greater results. Getting funders to sit together at a table, with input ultimately from nonprofits and community members, to figure out what is needed, what individual strengths can be brought to bear, and collectively develop a way forward, can have a powerful impact on the complex problems we are all trying to address. As Sheldon Caplis of Citi said:
“If you are funding something innovative, you gain by having partners, because you can do something in a critical mass.”
Luckily, there is a massive change sweeping through the philanthropic community regarding funder collaboration. The Obama administration’s social innovation initiatives have reflected this shift towards greater collaboration. Built into the three major public-private social innovation initiatives—the Social Innovation Fund, the Promise Neighborhood Initiative, and the Investing in Innovation Fund—is a requirement for match funding of the federal dollars. Not only does this stretch the value of government dollars (and saves tax payers money), it creates communities of funders working towards similar goals and creates the starting place for deeper collaboration.
“[SIF] requires that when making grantmaking decisions the grantmakers consult with a diverse cross section of community representatives in the decisions, including individuals from the public, nonprofit, private, and for-profit private sectors,” said Sean Stannard-Stockton of Tactical Philanthropy, in his detailed post on “Why the Social Innovation Fund Matters,” written more than a year before the grantees were released.
Investing in Innovation (i3) has a 20% private sector match. Promise Neighborhoods has a 50% match. The Social Innovation Fund (SIF), which funds youthCONNECT, ultimately requires a three to one match: a one-to-one match at the funder level and a one-to-one match at the subgrantee level. This is a tremendous amount of money to secure, but it also represents a tremendous opportunity. Without this requirement, we would not have brought on our first six match funders and we would not be benefiting from their insights.
The philanthropic community has put its full support behind these initiatives. Even before the inaugural portfolio of SIF grantees was announced, several major foundations committed $50 million in match funding. This is a huge vote of confidence for collaboration by some of the biggest players in the field. Coinciding with this match funding announcement, 140 community foundations released a letter in full support of SIF, saying that it is “a tool to find and invest in more community-based solutions.” This diversity of support shows that the funding community is heading towards collaboration and leaving our siloed nature in the past.
Ultimately, that is what the Obama Administration’s social innovation programs are about. The leveraged resources are important, but their greatest impact on building stronger communities will be on the adoption of collaboration as an effective model for change. As Paul Carttar said when we spoke together at the Harvard Social Enterprise Conference, the SIF will be a success even if all that comes from it is a proven model for replication.
While the types of public-private collaborative funding models coming out of this administration may be new, it’s important to recognize that other forms of funder collaboration, including giving circles, funders collaboratives, affinity groups, and local funder collaborations have been underway for many years now. For some very good overviews and guides, see Grant Craft’s guide to managing a funders collaborative or the research GEO conducted in 2004 (pdf). Edna McConnell Clark’s Growth Capital Aggregation Pilot is an incredibly ambitious and unprecedented example of aligning philanthropic resources in the growth capital marketplace.
But I see a growing interest in funders pooling more than just their dollars and other resources. Theories around this model are developing as funders’ enthusiasm and excitement for collaboration grows. FSG, the social impact consulting firm, has been developing a series of resources on “collective impact,” the idea that large-scale change requires broad cross-sector collaboration. Their article on shared measurement and social impact envisions the nonprofit sector not as a funder connecting vertically with nonprofit partners, but as one piece of a larger puzzle comprised of service providers, other funders, government
agencies, and corporations. All of these actors are aligned together under common goals and measuring with common indicators
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| © FSG 2009, “Breakthroughs in Shared Measurement and Social Impact,” by Mark Kramer, Marcie Parkhurst, Lalitha Vaidyanathan |
From the diagram, you can see that the funder network is only one part of the collective impact equation. But like any good network, it cannot function unless all parts are working together. As funders, we cannot continue to focus only on vertical connections with our nonprofit partners and ignore those potential horizontal connections with our peers. Ignoring these opportunities does a great disservice to those we are trying to help.
This type of collaboration is a new way of doing things and we are learning as we are going. But the challenges we are trying to solve are too big to get anything done alone. Working together at all levels—funder, nonprofit, for-profit, government—has the potential to put a significant dent in our society’s problems.
I will leave you with a quote from First Lady Michelle Obama at her announcement of the philanthropic partners for SIF. It speaks to the urgency of these problems and the need for collective action. She said that SIF was a “powerful new model” and all philanthropists and funders should come together to make sure it is a successful initiative:
"We want to grow this thing," she said, "so talk to your friends. We need to get this done."
I would say this to all funders about all initiatives. Talk to your friends and your peers. Listen to them. Learn from them. Partner on initiatives at varying stages of development and impact. We must get this done.
-Carol Thompson Cole
