Giving Compass' Take:

• Stanford Social Innovation Review profiles NeighborWorks America, a 40-year-old congressionally chartered nonprofit, and how it redefined its relationship with its grantees to build a learning lab.

• What can this example teach us about the importance of collaboration? In what ways can other organizations reset their thinking and establish a co-creator dynamic with grantees?

• When it comes to creating a culture of collaboration, here's what nonprofits can learn from Pixar.

The evidence is clear: Grantmakers can increase the impact of their dollars and better address inequity by collaborating with and learning alongside the nonprofits they support. Thanks to this insight, greater numbers of funders are shifting from transactional grantmaking toward forming deeper partnerships, collaborating with grantees during the design process to co-create programs and systems. Research demonstrates that the closer grantmakers are to their grantees, the more effective their support can be. In times of change, those closest to the work are best positioned to inform how to shape or reimagine that work.

Five years ago, we saw that traditional funding sources for community development were slumping. At the same time, the demand for our network members’ products and services was growing, especially in the wake of the 2008 financial collapse and foreclosure crisis. Although our funding rules allow members the flexibility to tailor their investments to the specific needs of their communities, these grants would not be enough to offset the decline in support from other sources. This led us to test a strategy of collaboration and co-creation with some of our network members. The goals were to facilitate innovation in new business development and management thinking and focus on building long-term sustainability and resilience. Given the significant social, political, and financial volatility in the United States, it was more important than ever for us to work with network members to address these challenges together.

We set about designing SHP to respond to these needs by building social enterprise capacity across the network. This process would also bring an intentional shift in our relationship with the network. Network organizations worked side-by-side with staff at NeighborWorks America to design the SHP model’s components. We also shifted the funding dynamic by making the process more self-directed for network organizations, such as tying grants to specific phases of the project. In this way, we created space for collaboration and for network members to test and shape the project’s methodologies and tools.

Read the full article about nonprofit innovation by Marietta Rodriguez at Stanford Social Innovation Review.