Over the last 14 years, the team at Arabella Advisors has had the privilege to partner with many of the most innovative donors in the country to design, build, and manage a wide range of donor collaboratives. Addressing issues from food policy to disaster recovery to student success, these collaboratives include different partners, tackle different challenges, and make decisions in different ways. Some work locally. Others are global. Some are comprised of a few funders who mostly share ideas and align strategies. Others are multi-funder, high-dollar collaboratives that deploy large amounts of capital—and that increasingly attract donors interested in tackling pressing social issues and systems-change efforts (see, for example, Co-Impact).
If we’ve learned anything over the years, it’s that each donor collaborative is unique. They are often led by inspiring people who are working hard to accomplish significant changes for and in the communities they care about. And they can often deliver far more value than the funders involved could hope to achieve by working alone. But working together isn’t always easy. Collaborative efforts to achieve significant impact are inherently complex, and the path from idea to impact can be strewn with pitfalls if participants aren’t attentive both to the components of the work and to the group dynamics that are essential to building an impactful collaborative. In most of their work funders are used to functioning independently, securing consistent buy-in and engagement from those with decision-making authority, and overseeing management of their own projects. Some are more comfortable making decisions than building consensus and to driving toward outcomes than forming strategic partnerships.
With all of that in mind, we asked ourselves a simple question: What features do the most effective donor collaboratives have in common? Their uniqueness notwithstanding, four features consistently came to mind. The members of effective donor collaboratives:
- Get to know each other. A collaborative will function more smoothly when participating funders understand each other’s goals and motivations for participating, feel comfortable interacting with candor, and treat each other with respect. Carving out time for deep understanding of different perspectives and goals is particularly important when a collaborative is comprised of different types of funders (institutional, corporate, individuals) and funders who have never worked together. Don’t fall into the easy trap of assuming everyone’s goals for this work align with your own. Meet in person regularly. Quarterly meetings are ideal.
- Set and keep norms of engagement and decision-making guardrails. A collaborative needs a mission-driven programmatic strategy to determine the direction of its philanthropic investments. But that’s just the start, really. It also needs a clear strategy and guidelines for how the group will operate and what is expected of participating funders. Collaboratives are best served by being explicit about expectations for time commitment and participation, and by requiring that staff representing each funder have decision-making authority. We recommend setting strong expectations for meeting preparation and attendance early on and following mutually agreed-upon guidelines throughout the life of the collaborative. Be clear about the governance structure and decision-making approach, as well as the possibility of earmarking funds for specific projects or sub-focus areas, etc. Clarity at the outset will prevent delays caused by confusion or disagreement on these fronts after the collaborative has launched
- Invest in the collaborative’s “backbone” or infrastructure. Managing a large-scale, multi-funder collaborative requires significant program management and administrative support. The time required to move work forward while managing the collaborative itself is significant. Funders should consider staffing the collaborative at least at the level they would staff internal initiatives, as it can be an intensive effort to coordinate funders who are not used to working together and may require high-touch coordination and individual education to reach agreements.
- Compromise and share power. Really. Discuss as a group what each funder’s programmatic and operational non-negotiables are and where they are willing to compromise. Know that a collaborative will struggle if each member expects the others to adopt their points of view and practices. Identify ways of streamlining processes and procedures that will allow you to focus on the substantive work at hand. For example, consider using a common narrative and financial reporting template for grantees and/or having the collaborative’s fiscal intermediary report back to all contributing funders. This is a benefit to the collaborative and less burdensome on grantees. Note that common reporting often requires compromise within a funder’s own internal organizational infrastructure or among its board of directors. But our experience suggests that the effort is typically more than worthwhile.
Donor collaboration isn’t always easy, but nothing worth doing ever is. Donors who can avoid the pitfalls on the path from idea to impact will find that going together ultimately gets them farther than going alone.