Donor Collaboration Can Bring Big Results, but Most Philanthropists Prefer to Go Solo

03/10/2013 | 5.5 mins |

Summary

More than ever, donors view collaboration as a way to stretch limited resources for maximum results. Yet when it comes to donors working with other donors, few have advanced beyond information sharing and grant coordination.

(This op-ed originally appeared in The Chronicle of Philanthropy.)

 

Collaboration is a hot topic in philanthropy—and for good reason. While government support for nonprofits shrinks, demand for nonprofit services is on the rise.

More than ever, donors view collaboration as a way to stretch limited resources for maximum results.

Yet when it comes to donors working with other donors, few have advanced beyond information sharing and grant coordination. It’s unusual for donors to form joint endeavors that pool money, time, and talent to advance a shared vision with multiyear goals.

By its very nature, such donor collaboration places results ahead of recognition for an organization or individual.

For donors, collaboration involves a big commitment of time and money, a loss of unilateral decision-making control, and the possibility that everyone taking part could lose prestige if the project doesn’t work out.

For society, the donors’ risky bet has the potential to pay big returns. That’s why we like to call this approach “high-stakes collaboration.”

Based on Bridgespan research, it’s clear that high-stakes collaboration doesn’t happen often. Foundations and individual philanthropists tend to march to their own drum.

But interviews with more than 50 donors and influential nonprofit leaders yielded a nearly unanimous view that more donor-to-donor collaboration would benefit society. When carried out well, high-stakes collaborations magnify the sum of each partner’s contributions and produce results beyond the reach of any single donor.

Bridgespan identified more than a dozen collaborations that involve such diverse causes as improving education and poor neighborhoods, advancing energy conservation, and preserving global marine habitats. Most were started by foundation leaders committed to making the collaboration work. Individual philanthropists participate less frequently, but the small number who have ventured into high-stakes collaborations show that it can work even for those who are new at philanthropy.

Foundations often consider collaboration when they want to:

Gain expertise. Donors often find themselves lacking the knowledge they need to make grants to a new cause. Rather than make solo investments in developing specialized knowledge, they may choose to pool resources to develop collective expertise. Collaboration also can appeal to new philanthropists who seek to learn from others who already have established respect in a specialized field.

Oceans 5 is a recent example. Started in early 2011, it’s a global collaborative of five donors dedicated to expanding marine reserves and constraining overfishing. For its first project, the group has supported creation of the Antarctic Ocean Alliance, a coalition of environmental and conservation organizations campaigning to ban fishing and development in 19 areas around Antarctica to create the world’s largest marine reserve.

“Oceans 5 was an opportunity to reach out to less-experienced foundations and philanthropists to share what we have learned in our 12-plus years of grant making in marine conservation, says Kristian Parker, chair of the Oak Foundation. “We hoped that for foundations that did not intend to hire specialized staff, Oceans 5 would provide a safe, well-informed platform from which to invest their philanthropic time and money.

Promote widespread change. Donors who want to avoid incremental change often take advantage of their reputations, networks, expertise, and financial resources to advance their common goals.

California Forward set its sights on overhauling how state and local governments work.

In 2008, the presidents of five California foundations created the bipartisan, broad-based organization out of frustration with the state’s increasingly dysfunctional governments.

The founders shared a view that the challenges facing the state were bigger than the individual programs each had been supporting.

In its first three years, California Forward distributed grants to nonprofit advocacy groups totaling nearly $16-million. Through their collective efforts, the collaborative has played an important role in restructuring the state redistricting and primary-election systems and advancing state budget reforms.

Pool resources. Some collaborations are established primarily to aggregate large sums of money that might be spent in many places over a long period of time.

In 2007, the Edna McConnell Clark Foundation started an effort to raise $120-million from other foundations in support of the five-year plans of three promising grantees: Citizen Schools, Nurse-Family Partnership, and Youth Villages. All three had solid track records and were poised for expansion, but the amount of money needed to finance their plans was beyond what the foundation alone could provide.

Within nine months after announcing the idea, Clark secured $81-million from 19 foundations and individuals on top of its own $39-million contribution. All donors got a place at the table to review the grantees’ performance and progress.

In 2007, Clark’s three grantees served an estimated 27,000 young people in more than 150 locations in 27 states and the District of Columbia. By 2011, the three programs collectively grew to serve over 51,000 young people in 42 states, an increase of 69 percent, and each organization was better positioned to attain long-term financial sustainability.

While such collaboratives are a great idea, they aren’t common because in most circumstances the problem a donor wants to solve isn’t big enough to warrant high-stakes collaboration.

Even when the circumstances are right, donors must confront a fundamental truth: All philanthropy is personal and motivated by personal experiences and beliefs. And donors derive great satisfaction, and often public praise, for their work. As a result, collaboration doesn’t come naturally.

Getting past these hurdles only leads to another: the collaborative’s day-to-day operations. “It’s surprising and sobering how hard it is,” says Nancy Roob, chief executive of the Clark foundation. The complexity of blending and channeling the wills of multiple donors should not be underestimated, she advises.

Other foundation officials and experts involved offer the following suggestions for making a collaboration work:

Get top leaders at the table. Typically, foundation CEOs with previous working relationships set high-stakes collaboratives in motion.

Adopt a clear structure and process. Build in points for evaluation and planning.

Be flexible. Long-running collaborative efforts have demonstrated repeatedly the ability to adapt to new findings and changing circumstances.

Plan an exit strategy. Clarify at the start how much time everyone wants to commit and how each partner can leave with minimal friction.

The promise of high-stakes donor collaboration is simple and alluring: At a time when many of society’s problems are too big to tackle alone and with limited resources, donors can accomplish more together than apart. Yet even champions of the idea acknowledge donor collaboration is difficult to do well.

But occasionally there will emerge an innovative opportunity that will yield disproportionate returns for the communities and causes donors care about.

Willa Seldon is a partner at the Bridgespan Group, a nonprofit that advises charitable organizations and donors. This is a drawn from an article “High Stakes Donor Collaboration,” in the spring issue of the Stanford Social Innovation Review by Ms. Seldon , Thomas J. Tierney, co-founder of Bridgespan and Gihani Fernando is a manager in Bridgespan’s San Francisco office.

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