Collaborative funds, known to many as intermediaries or re-grantors, are among the most effective entities for advancing social change. By pooling philanthropic dollars, deepening learning and relationships, and mobilizing resources at the intersection of issues, these funds hold a unique and growing role in the philanthropic ecosystem.

But this critical work, of course, has a cost. And too often, intermediaries are forced to absorb much of that cost.

Collaborative funds are often incentivized to participate in a siloed race to provide services at lower cost. This bending to donor expectations perpetuates a nonprofit starvation cycle, pushing collaborative funds to not fully account for the breadth and depth of the work they provide — thereby blunting their potential to deliver critical work.

However, accounting and professional services firm BDO USA worked with Borealis Philanthropy to develop a new, accurate, and values-driven financial model. We invite others in the sector to join us in a wider conversation about aligning values, practices, and beliefs with the models and structures we use.

Building a Values-Driven Financial Model

Financial models express who an organization is, the values they hold, and the work they do.

In 2023, Borealis Philanthropy partnered with BDO to better understand what was, and wasn’t, being accounted for in its financial model, and to develop a model that is more powerful and values-aligned. To date, Borealis has received flexible, multi-year support that covered costs not fully funded by core donor contributions. With those general operating funds dissipating, a new financial model was necessary to ensure Borealis’ long-term viability.

Together, we sought to answer a central question: What does a healthy, well-resourced, collaborative fund’s financial framework look like? We built a cross-cutting design team, including Borealis staff members, the BDO team, and Borealis’ board treasurer, Jeanne Bell, to find a path forward. Critically, this six-month effort built upon true cost research and practice work among 12 large private funders that was facilitated by BDO.

Iterative and spirited conversations led to the co-creation of a flexible and holistic financial model – one rooted in a commitment to equitable and responsive grantmaking that reflects the full cost and breadth of sustaining grassroots movements for justice.

Read the full article about funding collaboratives by Rodney Christopher and Amoretta Morris at Borealis Philanthropy.