When money helps mobilize, social impact funders often face the pressure to see a return on their investments. From nonprofit efficiency and sustainability to a measurable impact, checking all the boxes for a worthwhile investment can seem far-fetched. Individual nonprofits also feel the pressure. Scoring big wins despite few resources, measuring impact without the proper technology, empowering communities with little social power—even with backing from foundations or grantmakers, nonprofits can run out of steam.
Sustainable impact is still possible when funders explore structured collaboration among social impact organizations. A strategic option for social impact leaders looking to make a more significant long-term impact, collaboration can help grantmakers improve capacity and efficiency in their funding.
In my research with the Sustained Collaboration Network, 73% of the US-based collaborations we investigated had garnered greater funding, created new programs or services, or demonstrated a significant social impact because of their partnerships. Grantmakers should recognize that collaborations have frequent positive outcomes and consider that sustained collaborations could lead to a greater return on investments.
Below are some ways to jumpstart collaborations with small first steps.
Understand collaboration types.
My research with the Sustained Collaboration Network identified three types of collaborations for funders to be aware of:
Integrated organizations merge two or more organizations, often through asset transfers, change of control, or statutory mergers.
Shared program or service collaborations involve autonomous organizations pooling resources for a joint project, program, or service. These collaborations can serve the community or the participating organizations.
Alliances and networks consist of three or more organizations collaborating to achieve a common goal while maintaining individual missions and partnerships. While this type can be rewarding in the long run, it can also be the most difficult to manage.
Evaluate the collaboration
Each collaboration type above brings forward questions to pose when evaluating grant applications. After identifying a proposed collaboration type, consider the following:
Integrated organizations:
Will the end result of this partnership be greater than the sum of its parts? Mergers allow partner organizations to expand into new strategic areas, achieve more competitive grants, and improve their programs or services. Integrated organizations should show clear signs of an impact their partners would not make alone.
What is the financial health of the acquiring organization? Our research showed that several organizations that regretted their acquisition did not consider the financial health and estimated costs of the merger. All of our observed integrated organizations with positive outcomes considered financial health first.
Shared service collaborations:
Is there a strong lead organization that views this shared service as part of its mission? When lead organizations are willing to take responsibility for a shared service, positive outcomes result. Owning responsibility helps keep services consistent and more straightforward to evaluate.
Is there a demand for shared services? Without demand, shared service collaborations may fail. Consider a feasibility study before an implementation grant.
Shared program collaborations:
Is there a plan to fund partner organizations so they can continue to contribute to the program? Expecting organizations to contribute to programs without compensation or resources can cause major program pitfalls. Funders should consider program funding after planning grants have been successful.
Alliances and networks:
Is everyone on the same page? Get everyone on the call to ensure a shared commitment from all organizations involved, including staff and board members. Since organizations maintain their autonomy while collaborating in networks, grantmakers should be sure of the commitment level of each actor so that funding is adequately used. All members should be as committed as the lead applicant.
Start small
Foundations and grantmakers don’t need to commit large budgets to collaborations from the start. Instead, funders can use micro-grants to educate nonprofit leaders and boards about sustained collaboration. By reviewing the types of collaborations, shared services and programs, and network theories of change, social impact leaders can decide whether collaboration is the best option for their goals.
When all stakeholders agree on collaboration, they can discuss expectations around cost, timeline, and regulatory approvals. After a collaborative agreement, more funding can be involved.
Explore the partnership before committing
Funders can support impact with exploratory grants once stakeholders are educated on collaboration and ready to move forward. Exploratory grants allow collaborations to explore whether the partnership is right for them. It allows the partners to “date” before they “marry.”
These grants can help integrated organizations perform due diligence or a pre-merger joint venture to understand merger compatibility in operations and financial stability. Similarly, shared service and program collaborations can use these grants for feasibility analysis to determine service demand or a low-risk pilot project. Alliances and networks may use these grants to facilitate negotiations about how the collaboration will accomplish goals, especially when organizations give up some of their autonomy to participate.
Exploratory grants are fantastic ways to understand if collaborations will succeed without a considerable risk on investment. Even if exploration fails, success lies in knowing what works best for organizations before they get too deep into collaborations that don’t fit.
Fill in the gaps
Funders can link nonprofits to a vetted database of technical assistance and consulting professionals to encourage sustained impact. Collaborations often lack professional or legal support due to a lack of connections. Positive outcomes are more likely when these connections are made with trusted professionals.
Finally, as collaborations display success, funders can keep scaling up. Committing to long-term sustained collaboration can help collaborations stay on track, develop capacity, and stay motivated toward impact.
If you want to learn more about network funding solutions or need a facilitator to jump-start collaboration, we can help. Schedule a free 30-minute consultation to learn how.