What Are the Benefits of Joining a Donor Collaborative?

Access to pooled information and expertise: Simply by providing a forum to share perspectives, ideas and experience with their peers, a collaborative can offer donors good data and new ways of looking at an issue.

Opportunity to develop new grantmaking strategies: Beyond the exchange of ideas, a donor collaborative offers a vehicle through which donors can develop new strategies for addressing an issue.

Ability to leverage philanthropic resources: Whether the collaborative decides to formally pool its funds or to informally align members’ giving, coordinated efforts can result in impact that reaches far beyond what can be achieved through isolated grants.

Increased public attention to critical issues: Donor collaboratives can have clout, gaining the attention of an entire community, including service providers, policymakers and community leaders.

More efficient use of available resources: On a practical level, collaborations can promote efficiency. Participation in a collaborative that includes aligned or pooled funding saves donors the administrative costs of soliciting individual grant applications and conducting due diligence on each potential grantee, a benefit that can be particularly significant for smaller donors. And by pooling administrative tasks, donors can free up resources to expand direct investments. By coordinating grantmaking and reporting processes, a collaborative decreases the burden on nonprofit organizations, thus freeing up grant dollars for the key purposes for which they are intended.

Opportunity to share the risk with partners: Because they are engaging in a shared-risk venture, funder collaboratives may choose to take on controversial issues or invest in less well-established organizations or initiatives than would a single donor. As a group they may be more willing to get out in front of an issue than they would as individual donors. Some collaboratives have decided to get involved in public policy issues, even though some of their individual members might be reluctant to play this role independently.

Creation of additional partnerships: Successful collaboration can lead to more collaboration. By working together, funders transcend their normal methods of doing business and learn to speak one another’s language. They develop personal relationships with peers and this collegiality tends to permeate other activities.

Potential to achieve greater impact: Long-term collaborations between donors and grantees can have a critical impact on key issues. By targeting the collective ideas, strategic thinking and financial resources of many players at a particular problem or issue, a collaborative effort can achieve significant traction. This can result in local capacity building, greater public awareness of the targeted issues, new funding streams and changes in public policy, all critical elements in sustaining change.

Read the full article about donor collaboration at The Philanthropic Initiative.