The Benefit of Funder Collaboratives

There are many benefits offered to foundations participating in funder collaboratives, as well as to the fields they are seeking to support. While some of the upsides may be obvious, others are more subtle or unexpected and only emerge after years of experience. From nearly a decade of receiving funding and advice from a multi-issue funder collaborative, the Connect U.S. Fund staff offers the following advice on this mechanism for funders considering collaboration.

1. Knowledge Sharing

Through participation in a funder collaborative, foundations share both transferable best practices on innovative grantmaking and information with colleagues that they may not otherwise have engaged (e.g., those working on different issues). The basic concepts of network theory are proven by funder collaboratives: more nodes means more exposure to networks of organizations and individuals, more knowledge shared, and more power leveraged. By sharing the best knowledge through a funder collaborative, the whole field – and its composite parts – is raised up.

2. Shared Risk

Pooled funding allows for risk to be shared and spread across several funders. Through a funder collaborative, member foundations can venture into more creative grants than they may have been able to alone. Multi-year cycles can allow “big ideas” to be piloted and learned from, with stakeholder confidence being higher than if one foundation attempted to be the sole funder. Every foundation has its basic habits regarding risk. Participation in a funder collaborative allows for these margins to be stretched just a bit without the entire system being altered.

3. Greater Impact

The greater understanding funders have of the issues and the resource gaps, the more funders can pool funds and make an impact greater than what their individual networks of grantees or funding streams could produce. This impact is bolstered by exposure to cross-issue needs and successes that may transcend a specific foundation’s investment areas. The more foundations understand the macro-picture, the more they can leverage funding decisions that impact the whole rather than distinct silos of engagement.

4. Emerging Issues

In the case of a multi-issue funder collaborative, exposure to diverse issues and their gaps can inform the strategic planning of the foundation members, especially during times of a leadership transition. In both multi- and single-issue funder collaboratives, funders are exposed to a wider swatch of potential grantees and emerging issues, especially when one funder has chosen to move out of a field; this allows them to be aware of gaps in delivery of financial resources to the field as well as opportunities to support emerging change.