Recent articles and events have highlighted innovative efforts to form funder collaboratives that pool talent and resources to benefit specific causes. The subject is discussed in the Spring 2013 SSIR article, High Stakes Donor Collaborations  by William Seldon, Tom Tierney and Gihani Fernando. Grantmakers for Effective Organizations (GEO) held a Co-Funding Convening in February that brought together 140 grantmakers to explore different approaches to strategic co-funding, a key way grantmakers of all types are expanding the impact of their grants. Funder collaboratives including Edna McConnell Clark Foundation’s Growth Capital Aggregation Pilot, LISC, Social Venture Partners (SVP), Living Cities, the California Immigrant Integration Initiative, Disabilities Funders Network, Slingshot, and others all are designed to capitalize on the human and financial resources of like-minded stakeholders – and they are having a significant impact on the programmatic and geographic areas they serve.
At the heart of its mission, the Social Impact Exchange provides opportunities for funder collaboration too. Since last spring, the Exchange has launched three pilot, member-driven Funder Working Groups – in education, health and impact investing. Rather than relying on the sum of individual efforts, the collective action of these issue-based funders and the ability to leverage their experience, expertise and financial resources, is expected to lead to substantially greater impact, particularly for disadvantaged populations and communities.
Working collaboratively, the groups seek to:
- Bring additional, coordinated funding to accelerate the scaling process among evidence-based nonprofits
- Operate with a laser focus on the ultimate goal of achieving large-scale impact
- Establish common standards and build a body of knowledge on how collaborations can support solutions that work
- Develop a portfolio of scaling strategies to fortify the context for scale and encourage sustainability
- Introduce effective practices to communities for local implementation
These funders manage their collaboratives in a very specific way. After settling on a governance structure, members of each group nominate opportunities for investment and also solicit recommendations from others. An agreed-upon due diligence framework and process that leverages the results of earlier vetting provides confidence in the selection process. Nonprofit nominees must demonstrate third-party evidence of impact (scale-worthiness) and a sound strategy for growth (scale-readiness). Their growth plans can apply a range of scaling strategies, e.g., program replication, practice dissemination, system and policy change, etc.
Next, the funders will participate in meetings to identify, review and fund a portfolio of investment opportunities. Group members will give serious consideration to each opportunity, while still acknowledging the individual strategies, priorities and calendars that reside at their respective foundations. This is not a pooled fund – donors make individual contributions directly to those organizations they choose to support on an opt-in basis, according to the policies and procedures of their foundations. The expectation is that, as a whole, the Working Groups will support a portion of the raise for each nonprofit in the portfolio, with broader networks of grantmakers filling in the round. These distribution networks may include affinity groups, funder collaboratives, family and other small foundations, wealth management firms, private banks, and other grantmakers and investment/philanthropy advisors.
Like other collaboratives, the Exchange’s Working Groups concentrate in specific program areas. But what distinguishes the role these groups play is their focus on nonprofits with evidence of social impact and intention to scale. The Exchange’s sweet spot is in creating a marketplace where breakthrough solutions have the potential to go big – to deliver impact where it is needed most. The Exchange’s Funder Working Groups are a key building block for that marketplace in that they are the facilitator for turning growth strategies into action.
The first scaling initiatives selected by Working Groups are expected to be shared in September 2013. If you are a funder and are interested in joining a Working Group in Education, Health, or Impact Investing, please contact Nicole Kindred at firstname.lastname@example.org.
For more resources on collaboration, see:
Collaboration Handbook: Creating, Sustaining, and Enjoying the Journey, 8th ed. Michael Winer and Karen Ray. Fieldstone Alliance, 2005.
Effective Collaborations: Recommendations for a Connected Philanthropic Infrastructure; Council on Foundations 2010.
Funder Collaboratives: Why and How Funders Work Together; GrantCraft 2009.
High Stakes Donor Collaborations; Stanford Social Innovation Review (SSIR), spring 2013. Willa Seldon, Thomas J. Tierney, & Gihani Fernando.
 The authors talk about three main reasons funders have for collaborating: accessing expertise, pursuing system-level change, and aggregating growth capital. They conclude that while collaboration is both alluring and promising, it is difficult to do well, though can yield disproportionately greater returns for the communities and causes donors care about.