December 14, 2021
New Bridgespan Group Survey Sheds Light on a Growing Trend toward Philanthropic Collaboration, Highlighting the Practice’s Potential to Fuel Social Change
The survey finds that relative to traditional philanthropy, collaborative funds have more diverse leadership and are more focused on equity and justice, movement building, and power sharing.
What is driving this growth, and why does it matter? “Based on what we’ve seen, we attribute the recent surge in part to wealth accumulation over the past decade, and that many newly wealthy individuals and families see collaboratives as an efficient and effective way to give—possibly as an alternative to setting up large-staffed foundations,” says Bridgespan Partner Alison Powell, a co-author of the study. Another attractive feature: “Collaborative platforms, in all their many forms, provide donors the same advantages that mutual funds, private equity, and venture capital provide to investors—portfolio diversification placed in the hands of experts—and often to those closest to the issues at hand,” Powell adds.
Bridgespan defines philanthropic collaboratives broadly as entities that either pool or channel resources from multiple donors to nonprofits. Their survey included responses from 97 such initiatives, supplemented with interviews and group discussions with roughly 100 donors and fund leaders, and it highlights some of the differences between collaborative and more traditional philanthropy.
According to Simon Morfit, a co-author and Bridgespan manager, “The concentration of collaborative funds focusing on racial justice stands in contrast to the prevailing emphasis of other philanthropic funding.” In fact, 15 of the funds identified racial justice as their top priority; the most frequently cited top priority among the 97 funds.
Moreover, about a third of those surveyed said they seek systemic change through building fields and movements, whereas among all funders, over a 14-year period, just 7 percent of grants over $10 million were directed this way. Nearly half of the funds reported being led by people of color, compared to only 10 percent of US foundations.
Respondents estimated that while their grantmaking totaled between $2 billion and $3 billion in 2020, they could disburse up to $15 billion a year with only minimal growth in staffing. “In fact,” says Powell, “if the wealthiest Americans diversified their giving to include collaborative funds, and allocated just one-half of 1 percent of their wealth to collaboratives, that would amount to roughly $22 billion annually.”
While still a very small portion of overall giving, interest in collaborative philanthropy is growing. “The recent surge in collaborative giving platforms is an incredibly promising trend in philanthropy,” said Jennifer Stout, deputy director on the Philanthropic Partnerships team at the Bill & Melinda Gates Foundation, which funded the survey behind the publication. “The subset of platforms focused on large-scale grantmaking—what we think of as ‘exponential giving platforms’—has particularly exciting potential to unlock large flows of philanthropic capital. Increasing numbers of large funders, including Giving Pledge signatories, are embracing exponential giving platforms as a means to invest at scale with experts who can move funds quickly to where they are needed most.”
Bridgespan’s report cites three reasons for funders to participate: efficiency follows from outsourcing research and diligence to the collaboratives’ staff; effectiveness derives from the specialized and proximate knowledge, skills, and relationships collaboratives bring to the table, including close ties with community leaders; and engagement with peers and practitioners allows funders to learn from one another and—importantly—leaders in the field.
“If you add up all of these factors,” says Powell, “you find that collaboratives offer funders the opportunity not only to tackle problems at a greater scale, but also in a way that can shift power to those working on the ground. That said, unleashing the power of collaborative platforms for giving requires a significant shift in donor mindsets.”
Effecting such shifts, Bridgespan suggests, requires cultivating donor interest in this type of giving as part of one’s philanthropic portfolio; articulating and creating understanding of the importance of supporting systems change (not just direct service delivery); and establishing comfort with power sharing—ceding more power to grantees and community stakeholders.
“What we’ve learned so far is that philanthropic collaborations have proven their value to early adopters,” says Morfit. “They’re ready for the next wave of donors so they can live up to their full potential.”
About The Bridgespan Group
The Bridgespan Group (www.bridgespan.org) is a global nonprofit organization that collaborates with mission-driven organizations, philanthropists, and investors to break cycles of poverty and dramatically improve the quality of life for those in need. With a presence in Boston, Mumbai, New York, Johannesburg and San Francisco, Bridgespan’s services include strategy consulting, leadership development, philanthropy and nonprofit advising, impact investing strategy and diligence, and developing and sharing practical insights.
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