When Elwood Hopkins arrived as the new executive director of Los Angeles Urban Funders in 1996, the donor collaborative was already four years old. Founded in response to the 1992 Los Angeles riots, the group of 21 donor organisations aimed to eradicate the riot’s underlying causes, particularly economic disenfranchisement.
“There was no culture of collaboration. It was like running a three-legged race,” recalls Mr Hopkins, “Their first collaborative act was to hire me.”
Donor collaboratives – groups of donors who share a common interest, often hosted by community foundations – can help donors make best use of their donations by exchanging knowledge and experience and pooling funds.
Where donor collaboratives can work best is on single-issue initiatives, where interest is focused in a specific geographical area, “or where someone with a long-standing interest needs help in an entirely different geographic area”, says Rebecca Goodwin, a New Jersey-based philanthropy adviser with experience in the US, Canada and Mexico. “Often the issues are complicated, unknown, or ones where donors may be asking, ‘How the heck do we make difference?’” says Ms Goodwin.
Collaboratives confer benefits on donors, including opportunities to learn from other donors, access to established networks and the ability to give strategically. But critics say collaboratives waste time and hamper innovation.
Joan Cosper, director of education at East Bay Community Foundation in Oakland, California, says: “[Collaboratives] are time-consuming; it is a limiting factor. But with the right alignment of interests, it can be time well spent for the right group of donors.” She adds that “while group processes can be stifling of innovation... these difficulties can be circumvented with careful planning”.
What, then, should donors consider before deciding to collaborate?
At LAUF, the various donors eventually settled on a strategy and “there was a sincere search to find comprehensive solutions; they believed that they shouldn’t exist in boxes”, says Mr Hopkins. LAUF concluded its 10-year mission and its former members have spun off and formed new collaboratives as needs arise.
Today, Mr Hopkins is managing director of Emerging Markets, a Los Angeles-based urban renewal advisory firm. His book, Collaborative Philanthropies: What Groups of Foundations Can Do that Individual Donors Cannot, draws on what he learnt at LAUF.
Mr Hopkins is adamant that no donor should ever collaborate simply for the sake of collaboration, an entreaty echoed by others in the field. Equally important, he says, “is that you add value because you are already adding another layer of bureaucracy between the collaborative and the recipient”.
Melissa Berman, chief executive officer of Rockefeller Philanthropy Advisors, has observed many donor collaboratives, with Rockefeller functioning “as a sort of secretariat” she says. In her role, Ms Berman has worked with donors whose budgets range from hundreds of thousands of dollars to tens of millions.
She says that before embarking on a collaboration, donors should determine whether they are really interested in collaboration or are merely seeking other sources of funding for their own ideas. Donors should also ask themselves what they can offer – “knowledge, insight, a network” – in addition to their financial strength.
At LAUF, the asymmetry of donor resources was initially problematic, but donors came to acknowledge one another’s strengths. “Large foundations can be heavy-handed,” says Mr Hopkins. “We mitigated that by emphasising intellectual contributions.”
Entering a collaborative, donors should anticipate that one group or individual may dominate. Mr Hopkins says part of his job was ensuring that the “large donors dominated appropriately”.
Which donor group (or individual) becomes the alpha male of a collaborative is not always a function of financial firepower, it may be the person with the strongest personality or the founder of the collaborative. Either way, says Ms Berman of Rockefeller Philanthropy Advisors, “there is sometimes a pretense that everyone is an equal partner”. She advises that any donor thinking of joining a collaborative ensures that there is transparency from the outset.
To avoid personality clashes, the East Bay Community Foundation holds lunches so that donors can meet potential partners before any co-operative commitment begins. “You should ask yourself how it would feel to be with these people on a regular basis,” says Ms Cosper.
But arguably the most important issue donors must consider before deciding to collaborate is whether the collaborative will create strength in numbers. Sometimes the answer is unclear until after a collaborative has started work. Ms Berman recalls one collaborative that easily found unanimity in their approach but after research discovered that an existing non-profit organisation was clearly better equipped to address the issue. Although the collaborative disbanded, “all the participants learned a lot in the early stage – there was no bitterness”, she says.
Jennifer Astone is executive director of the Firelight Foundation, a US-based philanthropy group whose focus is children orphaned or affected by the HIV/Aids epidemic in sub-Saharan Africa. Firelight often collaborates with European and African donors. Its efforts emphasise grants of $7,000-$12,000, often to village-level community-based organisations. While these individual grants are relatively small, the “noise” Firelight makes when collaborating with other smaller donors has drawn the interest of much larger organisations to the grantees.
“It’s only through collaboration that we can convince bigger donors to address these issues,” says Ms Astone, who notes that the US government organisation USAid, is now funding Zambia’s Luapula Foundation, one of Firelight’s early grantees.
Ms Astone says that donors should be selective about when and with whom they cooperate. “Collaboration takes a lot of work, there’s always a trade-off,” she says. “The value added beyond our own foundation grantmaking work is where we feel we can make a difference.”
At the East Bay Community Foundation, which in conjunction with its donors, dispersed some $37.6m over some 2,300 grants in 2006-2007, Ms Cosper says that throughout the process of collaboration donors should ensure that they can give the time necessary to comprehend grantee’s real needs. East Bay stresses capacity building and she can recall one grantee – a violence prevention arts programme – that wanted to focus on board membership issues while a more pressing matter was the lack of proper office equipment for the staff.
On a different level, Nicole Taylor, East Bay Community Foundation’s president and chief executive officer, says there are some far-sighted ideals that are an important part of the collaborative process. “Donors give because they are asked. Philanthropists invest in their communities,” says Ms Taylor. “We want to build more philanthropists. It’s easier to do this when there is camaraderie built around donors who are like-minded about having an impact on their community.”
