Donor Collaboratives?

Collaborating with other like-minded philanthropists is often an attractive concept to individual donors and small foundations. Donor collaborative are a great way for individuals and small foundations to extend their reach, leverage their investment, or learn about a new field. However, there are significant drawbacks if they aren’t done well. Here’s how to decide.

Why Collaborate?
First, figure out if collaboration makes sense. Ralph Hamilton, a senior researcher at the Chapin Hall Center for Families at the University of Chicago, says the cardinal rule of collaboration is this: if you can go it alone, go it alone. “Do you have sufficient resources, will, knowledge, and skill needed to address the issue on your own? If so, do it. If not, know what you can bring to the table when you’re there with others.”

A donor collaborative can be a good fit if you find that you want to expand advocacy for a cause or need more resources to support it than you have on your own. Working with experts can help donors better understand the issues and potentially develop creative new solutions to address the causes.

Expanding Resources
Not surprisingly, one of the major reasons donors collaborate is to take on issues that require lots of resources. Six years ago, for example, the Omaha Community Foundation convened a donor collaborative that helped found and fund the Latina Resource Center, a domestic violence shelter designated specifically for women from Omaha’s burgeoning Latino community. Three years later, the foundation brought together three family foundations, the local United Way chapter, and the University of Nebraska at Omaha to launch the Neighborhood Center for Greater Omaha, an effort designed to strengthen neighborhood associations.

In both cases, the community foundation was instrumental in bringing together the various members of the collaborative. “The strongest thing we brought to the table was that we were a natural convener,” says Mary Heng-Braun, senior director of donor services. “Our goal was to improve Omaha, not start new programs here at the foundation.”

Breaking New Ground
Collaboratives can also be a great way to break new ground on emerging issues. Several years ago, the David and Lucille Packard Foundation approached the Peninsula Community Foundation’s Center for Venture Philanthropy (CVP) in Menlo Park, California, with a question. Given the high level of interest in environmental issues among Silicon Valley donors, why weren’t local groups getting more support from them? Local groups were at the forefront of efforts to preserve wetlands, stabilize water consumption, and decrease hazardous waste, yet most of the donations from individuals and family foundations were going to national groups.

On Earth Day 2003, CVP launched the Environmental Solutions Forum, a $2.4 million social venture fund that brings expertise to fifteen environmental education organizations throughout the San Francisco Bay area. In Silicon Valley style, the collaborative forum is structured like a venture capital fund: family foundations and individual donors invest in the forum, which manages the fund, handles vetting of investments, and documents the fund’s social return. A CVP consulting team works with each grantee to develop a clear theory of change, and the forum makes grant “investments” against three-year business plans.

“Donors needed someone on the ground who could help them make sense of the landscape,” says Carol Welsh Gray, the center’s executive director. “We were able to give them that.”

Learning is another huge benefit from working together. For donors interested in a new program area or issue, collaboratives offer a great way to learn from other donors before setting off on their own. When the Environmental Solutions Forum holds its quarterly meetings with the directors of portfolio organizations, investors are encouraged to sit in. “The meetings offer investors a perspective into the nonprofit world,” says Program Manager Jed Mitchell. “They can see nonprofits get excited about new projects that are on the horizon. It opens a window onto other projects.”

In most cases, the coordinating institution plays a central role in shaping a learning agenda. The Shefa Fund, a national donor advised fund for progressive Jewish donors, has three pooled funds that focus on complex issues: Middle Eastern peace, gender and sexuality, and voter education. Donors receive detailed issue backgrounders and quarterly briefs that lend depth and breadth to their giving. “Because of our voter mobilization brief, we attracted $45,000 for our discretionary-grant pool,” says Sue Hoffman, Shefa’s executive director. “That means we can be more strategic [about] where we are able to focus grant dollars.”

Keys to Success
Despite the advantages, collaboration can be expensive and time consuming. Those are the two major drawbacks. The more donors at the table, the more process-laden the collaborative will likely be. That’s not necessarily bad—but donors should know what they are getting into.

“Collaboration takes time and energy, and when they are successful, it is because of the work that has been put into them,” says Sara Gould, executive director of the Ms. Foundation for Women, which has developed a pair of successful collaborative funds and published an outstanding guide to funder collaboration. “It requires conversation, checking, [and] talking to people.”

If you decide to collaborate, find partners you work well with; agree on the scale of the problem and what the collaborative can reasonably expect to accomplish; and be prepared to spend the time and money necessary to be successful. And remember to go slowly. Engage incrementally, says Chicago researcher Ralph Hamilton. “You’ve got to learn how other people think, what the peculiarities of their institutions are. Once you’ve got those things established, you’ll be on firm ground.”

Neil F. Carlson is a freelance writer based in Brooklyn, New York.
Copyright 2004 Community Foundations of America
Used with permission

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Posted at 3:28 PM, Oct 27, 2004 in Nonprofit Management | Performance Measurement | Philanthropic Strategy | Scaling Philanthropy | Permalink | Comment