Throughout the history of the United States, people have leveraged their social capital and financial resources to benefit their communities. Whether it was the mutual aid societies of the late 1700s (Duran, 2001), the rise of United Ways in the industrial age, or giving circles of the 21st century, collaborative giving isn’t new in the sector. What is new, however, is the rapid growth of funder collaboratives among institutional funders and the amount of funding they’re moving into the sector.

Some attribute this growth “in part to wealth accumulation over the past decade coupled with increasing interest in new ways of giving” (Powell et al., 2021, p. 4). This movement from traditional methods of resource development and distribution to more collaborative efforts can bring increased efficiency and effectiveness. Releasing the Potential of Philanthropic Collaborations, published by the Bridgespan Group in 2021, demonstrated the increased pace of establishing new collaboratives, noting that over half of those surveyed launched collaboratives after 2015. The greatest acceleration happened in 2020 when 16 survey respondents established collaboratives, “the highest number of organizations established in a single year” (Powell et al., 2021, p. 4).

The scale of gifts from collaboratives ranges significantly, much like traditional philanthropy, yet there are key differences in collaborative funding. The Bridgespan research (2021) identified some key areas that distinguish collaborative funding from traditional philanthropic giving, including an increased focus on funding systemic issues and racial justice, as well as more diverse leadership with collaboratives. The researchers noted that “nearly half of the funds reported being led by people of color” (Powell et al., 2021, p. 7). In comparison, people of color comprised only 10% of CEOs and leaders across U.S. foundations (Philanthropy News Digest, 2020).

With increased leadership from communities of color, it would make sense that collaborative funders place a higher priority on racial justice. While the Bridgespan study (2021) did not identify specific dollar amounts given to racial justice, respondents did identify the category as the top funding priority, and “almost all of these funds referenced racial inequities, centered Black, Indigenous, and people-of-color (BIPOC) populations, and/or challenged engrained power hierarchies when describing their change objectives” (Powell et al., p. 6).

This focus on challenging traditional power dynamics and moving money to BIPOC communities could significantly change the landscape and impact of nonprofit organizations. It also represents a dramatic shift from historically low funding for racial justice which “has consistently been low — only 10 percent to 20 percent of the scale of the larger racial equity set, and barely 1 percent of all funding” (Philanthropic Initiative for Racial Equity, 2021, p. 8).

The Black Equity Collective is one example of the intentionality of centering philanthropic leaders of color to impact “Black-led and Black-empowering social justice organizations in Southern California” (n.d.a, para. 2). The only philanthropic network in the state of California “solely dedicated to Black issues, to empowering Black voice, and investing in Black leadership and Black organizations” (n.d.b, para. 1), the Collective seeks an investment of $60 million by 2030 (n.d.a).

Read the full article about collaborative funding by Tamela Spicer and Malik Robinson at Johnson Center.