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Why Some Donor Collaboratives Succeed—and Others Don’t

An introduction to the common pitfalls faced by donor collaboratives, and tips on how to avoid them.

Failure. It sounds so harsh. System failure, power failure: these aren’t happy occasions. We typically experience “failure” as falling short, as disappointments or losses, rather than opportunities. Many people don’t even like to contemplate the idea of failure.

But I firmly believe that failure has a lot to teach us. Knowing what doesn’t work is an important part of understanding what does, and how to get there. As Thomas Edison famously said about his unsuccessful prototypes, “I have not failed. I’ve just found 10,000 ways that won’t work.” James Dyson, the billionaire industrial engineer, has a similarly healthy view of failure. In fact, he credits failure for fueling his success. “I made 5,127 prototypes of my vacuum before I got it right. There were 5,126 failures. But I learned from each one. That’s how I came up with a solution.”

This outlook is especially important in philanthropy, where the stakes are always high and responsible use of resources is critical. Our field has long been concerned with learning from our mistakes, but it can still be tricky to talk about failure, particularly when navigating public perception and reputational risks can be challenging enough to begin with.

But we need to talk about failure. If we don’t, how will we ever learn to do better? Willingness to learn and improve is so important to making philanthropic endeavors stronger, sustainable, and more effective. I love the idea of the Failure Report published annually by Engineers Without Borders, which seeks to be honest about failed projects in order to constructively discuss challenges. And—more importantly—explores how to overcome them.

Donor collaboratives are relationships. As such, they require proper planning and management in order to succeed.

One area where it’s particularly delicate to discuss failure is donor collaboratives. Why? Because at their core, donor collaboratives are about relationships.

Before I go on, let me define the term donor collaborative. Alternatively known as a pooled fund or a co-funded partnership, a donor collaborative is formed when two or more donors—be it individuals, institutions, or foundations—come together, building on a common strategic vision and coordinating resources to advance a common cause. Donor collaboratives vary widely in terms of structure, decision-making, buy-in amounts, and the degree to which time, staff, information, and other resources are shared. And, as result, no two collaboratives are exactly alike in their form and function. However, the core belief of any collaborative is that donors working together can yield results beyond what each individual funder could accomplish alone.

When people (or organizations) come together to rally around a shared issue, it’s seen as a cause for celebration. And in many ways, it is! Philanthropists and grantmakers get excited about the enormous potential of a program they’re funding and are delighted to find like-minded supporters who want to come on board to increase the gains. That’s great. Generous people are sharing ideas, learning, and resources to make the world a better place. It’s everything good about sharing that we were taught at home and in school.

But partnerships are complicated.

At their core, donor collaboratives are relationships. This means that they aren’t just about dollars and cents, although high-profile partnerships often do involve large amounts of money. In addition to the financial resources involved, collaboratives are also about trust, reputation, and public perception. Each member of a collaborative contributes their personal resources, influence, and network to the whole, seeking to build something greater than the sum of its parts. At the same time, each partner is putting all of those things on the line by joining the group.

Furthermore, donor collaboratives are often also organizational partnerships. This means that entire groups and institutions may need to align their different working styles and competing priorities to come together successfully. Despite their shared interests, different organizations may have very different ways of approaching a problem and tracking progress. Those differences must be harmonized within the group, so that it can operate as a cohesive unit. And this alignment can only happen after you’ve done the hard work of finding and recruiting your partners, which is a time-consuming undertaking on its own.

Given all of these challenges in launching a collaborative, many funders get overly focused on creating the partnership—the act of deciding to collaborate—seeing it as the finish line rather than a starting point. After all, you did all the hard work of finding great partners and convincing them to come along with you. That’s quite an achievement! Now there’s this whole group of donors who are funding this great program, excited to make progress together. What could go wrong?

Well, as it happens, plenty.

Three common mistakes when building and managing donor collaboratives

One of my colleagues previously wrote about the critical elements involved in getting collaborative funding or philanthropic partnerships off the ground. But things can go wrong even after launch. Philanthropic partnerships can—and usually do—encounter difficulties at multiple points in their lifecycle. There’s no way to indemnify any partnership against these difficulties. However, it is possible to be prepared for them—specifically, by being aware of potential trouble spots in advance.

Here are a few of the most common mistakes I’ve seen with donor collaboratives.

Mistake #1: Lack of clear roles.

In my experience, lack of role clarity is a big factor in why philanthropic partnerships fail. When a group of funders comes together around a passion project, it doesn’t mean that their expectations are already aligned about how to proceed. Misalignment early on causes frustration and demotivation within the group, making it more difficult to build consensus and move forward together.

It’s a bit like deciding to co-host a party. A convener brings together a group of co-hosts, who are in agreement about the party’s theme and budget. But it soon becomes clear that half of the group wants an intimate dinner party for a small group of close friends while the other half wants a casual outdoor barbecue for a huge group of business contacts. Meanwhile, everyone is frustrated with the lone member who keeps insisting upon a formal event, complete with champagne and live orchestra, Great Gatsby-style.

Hammering out an agreement takes time and energy: venue, guest list, menu, amenities, and so on. As the party draws closer, several of the co-hosts are worried about the escalating costs and decide to share out the work internally instead of hiring vendors. The other co-hosts are furious that they are expected to pour the drinks, play the music, and park the cars, insisting that hosts should focus on greeting and charming the guests, ensuring their return to next year’s party.

This metaphor may sound silly, and it is meant to be light-hearted. But it’s a fairly accurate sketch of how partnerships devolve when roles aren’t clear from the start. Many collaboratives don’t realize that roles need to be discussed at all or assume that they must be one-size-fits-all with no variations. In fact, there are leadership roles, advisory roles, non-voting member roles, and so on. But expectations should be clear from the start—ideally, even before partners have come onboard with a “yes”—so that participants understand what they’re signing on for and can set expectations accordingly.

Mistake #2: Focusing on “who” at the expense of “how.”

The first stage in forming a donor collaborative is to find and cultivate potential partners. Who shares my passion for this project? Who are the influential thinkers and doers on this issue? Who is willing to invest alongside me? Are they willing to come aboard? To what level? At this stage of forming a partnership, the question of “who” is naturally an overriding concern.

This is all good and useful thinking.

The problem emerges when this mindset continues after the partnership has been launched, instead of shifting towards the new shared reality of the endeavor. Once the partnership has been celebrated, it’s now important to build consensus around how the group will achieve shared objectives. This can be an intense undertaking since consensus building and goal setting requires honest reflection about what is most important to the group as a whole. It can be surprisingly difficult to get members to think beyond their organization’s own mission statement or institutional perspective, putting aside what they are already comfortable with to instead visualize a brand-new shared framework.

For example, let’s say a group of philanthropists have come together to fund the global fight against malaria. Once the formation of the partnership is clear, they must turn their attention to how they will fight malaria. What will they fund, and how? They’ll need to answer a variety of key questions, such as:

  • Do they want to prioritize treatment or prevention? For everyone or specifically for children (who are most vulnerable to fatal incidences)?
  • Is the preferred approach to work with global health organizations in a coordinated worldwide movement, or to invest in community-level health efforts in high-prevalence areas?
  • Are they going to look at holistic or complementary approaches, such as water and sanitation, or stick with disease-only focus?
  • What is their philosophy on aligning with partnerships on other diseases that occur alongside malaria, such as dengue or West Nile virus?

As you can see, there’s no shortage of questions raised by a straightforward goal. This is why partnerships must invest time and energy at the outset to articulate their mission, vision, goals, and governance structure. Failure to do so usually results in a lack of clear expectations and group buy-in, making it difficult to move forward effectively.

Mistake #3: Assuming your funding partners’ interest, energy, and enthusiasm are here to stay.

At the moment of launch, the champagne is toasted, and funding partners fêted. But what happens after this initial launch period? Too often partner relationships are put on the back burner and taken for granted.

How does this happen? When a donor collaborative has secured its anchor partners, months upon months of strenuous effort and activity have gone into achieving this point of arrival. A donor collaborative with an energetic start may have several big-name partners and tens of millions of dollars in commitments nailed down. There’s goodwill and excitement—maybe even a splashy event and positive attention from the media.

But before long, in the absence of ongoing, authentic relational engagement, that hard-earned energy will begin to wane. Without a clearly-defined relationship strategy and timeline, partners likely don’t know or understand the trajectory they are operating within and partners may begin to fall victim to a growing sense of a lack of purpose post-launch. Without staff specifically dedicated to nurturing partner relationships, the donor collaborative may lack the concentrated bandwidth required to maintain partner engagement and anticipate and address partner needs. In addition, no one is prioritizing the collaborative’s financial growth.

This is a grave mistake. As I’ve highlighted above, relationships are at the very core of collaboratives. As such, relationships need to be at the very core of any donor collaborative management strategy—not just for the collaborative’s launch, but for the long-haul.

To assume that your donor collaborative’s initial momentum will carry the fund in the long-term is a recipe for disaster. Without proper relationship stewardship that ensures that funding partners are individually engaged—with touchpoints tailored to the individual needs, interests, and preferences of each partner—your energetic start is sure to fizzle. Before long, your collaborative’s hard-earned momentum will disappear, and its future will become uncertain.

Scary? Yes. But there are key lessons to be learned from this mistake:

  • Excitement doesn’t happen on its own: Maintaining a funding partnership’s energy takes substantial time and effort; this can’t be short changed.
  • Dedicated staff are necessary: Staff need to be able to prioritize funding partner needs and engagement, and they can’t do this if they’re spread too thin.
  • Clearly define your timeline, goals, and expectations: An explicit strategy will help funding partners make decisions about the tempo and scale of their involvement and funding.

The moral of the story? Partnerships need to be done right.

Donor collaboratives can deliver an amazing package of results, including additional and longer-term funding, shared risk, shared knowledge and expertise, systems-level perspective, and higher levels of publicity, thereby increasing public attention to critical issues to achieve traction and momentum.

But, like all things, donor collaboratives can, in fact, fail. When we become sensitive to this risk, we become more attuned to the potential pitfalls that can occur both before launch and in the months and years that follow. The moral of the story? Partnerships need to be done right—planned with precision and nurtured and developed over time. Plan to invest time, resources, and energy along the way, not just at the beginning.

In my next post, I’ll talk about what it takes to make donor collaboratives succeed.