Channeling the Power of Collaborative Funding for Good

Friday, March 29, 2024

Channeling the Power of Collaborative Funding for Good
By Rashida Abuwala, Principal of New Tomorrow, and Michelle Chasteen, Deputy Director of Communications at NEO Philanthropy

Philanthropy wields significant power. This power is often over community leaders who require resources to pursue liberation and justice within a sector that is increasingly recognizing the need to incorporate more equitable and just grantmaking practices. These practices include making multi-year general operating grants, adopting trust-based philanthropy, participatory grant-making, and funding intermediaries that are either proximate to or led by impacted communities. But a standout and increasingly popular approach is collaborative funding.

What are the benefits of collaborative funding?

The benefits of collaborative methods for both grantees and funders, compared to traditional foundation grantmaking, were discussed in a panel of four experts at Philanthropy NY’s event “Funder Collaboratives that Support Shifting Power to Communities” moderated by Rashida Abuwala, Principal of New Tomorrow and advisor to Youth and Families Forward.

Collaborative funding “has created a space outside of traditional philanthropy that I think needs to be supported,” said panelist Margarita Rubalcava, VP of Strategic Partnerships at NEO Philanthropy, which hosts several collaborative funds. For her, the first step for many funders is recognizing the need to work with others. “Considering launching a collaborative fund or being part of one already puts you in a frame of mind of recognizing that there is something you cannot do, or something that you don't know, that you can gain from a collaborative.”

Funder collaboratives play a crucial role in the philanthropic ecosystem, channeling resources to impacted communities while fostering knowledge and shared understanding among funder groups. In recent years, both the number of funder collaboratives and their total resources have grown as more participants see the value of these partnerships. For many funders looking for ways to drive impact and equitable outcomes, joining with others in a pooled fund or collaborative fund is a key method in their approach to philanthropy. According to recent research from The Bridgespan Group, funder collaboratives are more likely to have racially and gender diverse leadership, are more likely to employ trust-based or participatory grantmaking practices, and are more likely to make unrestricted grants.

Funder collaboratives can develop collective values and processes that dismantle barriers faced by grantee partners in building their own power. As such, collaborative funds have been a vital resource mobilizer for social movements. Julia Beatty, Director, Black-Led Movement Fund at Borealis Philanthropy, explained how collaborative funding can actually allow funders to better reach movement leaders by “providing a vehicle to support the work that funders may not be able to fund at their own institution, and, fund the kind of grant-making practices that might require more capacity than they have.”

Beatty also described the value they have observed from integrating participatory grant-making into their practices, not just in sharing power with community leaders, but for funders as well. The Black-Led Movement fund “enabled donors to learn what is involved in moving money in a more democratic fashion” and helped donors “really engage grassroots organizations on the ground.” Collaboratives can help bridge the gap between donors and movements, helping to develop the relationships, people power and financial capacity needed to make grass-roots grants.

The mutual benefits, both for grantees and donors was further described by Taryn Higashi, Executive Director of Unbound Philanthropy and one of the co-founders of the Four Freedoms Fund. Since the Four Freedom Fund’s inception 20 years ago, it has raised and regranted $253 million to strengthen the immigrant justice movement. Higashi described how Four Freedoms has “become a table where the grant makers can learn from each other, where people who are responding to a moment like the Muslim ban or the family separation crisis can go. And they know its a safe place to make sure their funds will go to address critical issues, and they can find partnership with others.”

The power of collective action can be deeply felt through working with collaboratives. It has allowed foundations “to do things that just were impossible to do individually”, Higashi suggests. Sarah Chiles, Senior Advisor at the Redlich Horwitz Foundation and co-chair of Youth and Families Forward describes the impact collaborative funding can have on transforming systems through their support of Fair Futures: “our collaborative was involved really from the start and provided everything from seed funding for the initial research to codify the model, right until now. We've put in about $4 million in private funding over the last few years, and we achieved permanent city funding of $30.7 million annually. Beyond the return on investment, it means that every young person in foster care will be able to receive a coach and a tutor.”

Funder collaboratives have a few different names. Sometimes called pooled funds, donor collaboratives, or collaborative funds, these are all groups that come together to share strategy, capital, and/or resources toward a unified charitable purpose or vision. Core components typically include multiple donors, either a resource or time commitment, agreed governance structure, and shared vision or goals. The Philanthropic Collaborations Database names more than 300 collaborative groups covering a range of issue areas, geographies, and community partnerships. These groups often leverage a mix of deep field expertise, efficient processes, and relationships with both funders and communities to achieve significant impact. A survey of more than 200 collaborative funds measured their total impact at $2-3 billion in grantmaking annually.

Funder collaboratives have emerged as a transformative force in the philanthropic landscape, helping to promote equitable practices and fostering a culture of shared understanding and cooperation. By pooling resources and expertise, collaboratives that employ just and participatory methods have enhanced the impact of individual donors while also democratizing the grant-making process, empowering communities and social movements. As the philanthropic sector continues to evolve, the role of funder collaboratives is likely to become even more significant, shaping the future of philanthropy and social impact.

Questions to Consider Before Joining a Collaborative Fund Initiative
Contributed by Margarita Rubalcava, Vice President of Strategic Partnerships, NEO Philanthropy

How would being part of a collaborative help my foundation do something that it cannot do?
If your foundation is considering funding a new issue area you have not supported previously ask:
- Are there existing donor collaboratives that our foundation can be part of to learn this new area?
- If there are none and you wish to start your own collaborative ask:
  - What other funders do we want to invite to be part of this?
  - How do we find the right intermediary to host a funder collaborative on this issue area?
  - What do we hope the collaborative can help us do that we cannot do on our own?
  - If you are joining or launching a collaborative and using another intermediary for this service, ask yourself:
- What is the mission of the intermediary hosting this collaborative and how does it align with your own foundation’s vision?
- Does the intermediary have a track record of supporting constituency-led work; of hiring and elevating people with lived experience and of practicing trust-based philanthropy principles?
- If connecting to lived experience and community voice, ask yourself, how does the intermediary and the collaborative itself, integrate the voices of those directly affected by the grantmaking? Do they have participatory grantmaking practices? Do they hire staff with direct experience of the issue the collaborative is addressing?