Philanthropic funders today have more opportunities than ever for collaboration with others. But which others? The choices are many: other funders, other community partners, others in business or others in government. The reasons for collaboration are not hard to point to: more resources, more impact, more leverage and bigger change possibly. Collaborative funding can also offer the possibility of more innovation, more perspectives on a problem and more possibilities for intervention. But as I described in a recent blog, typically funders don’t engage in structured collaborative funding. Most funders choose rather to focus on funding individual organizations delivering specific services usually in a shorter timeframe. This is unquestionably needed and important. But could some part of a funder’s portfolio also be allocated to funding collaboratively, not only with other funders but with other sectors? Are multi-sectoral partnerships now more of a possibility, particularly as we consider the opportunities for investing in a stronger Canada?
It's important to distinguish multi-sectoral funding from collaborative funding although both involve collaboration. I cited some examples of collaborative funding in Canada in my blog. In these cases, funders align their funding or directly pool their funds, usually as a group of charitable funders making grants. Even this sort of funding isn’t easy. Active collaboration requires compromise, communication and usually a long-term vision. But there have been growing instances of collaborative funding over the last decade, particularly in the environmental, community development and poverty reduction fields.
Multi-sectoral funding partnerships go beyond collaborative funding. In many cases they involve some mix of nonprofit, corporate and government funders. The partnerships may also involve a mix of capital, data, expertise and policy development. There are many examples of these types of funding partnerships across the Global South as described in a recent newsletter from WINGS, the international network for grantmakers. For example, the Mesoamerican Reef Fund (MARFund), a regional environmental fund that focuses on preserving the Mesoamerican Reef, which spans Mexico, Belize, Guatemala, and Honduras involves international donors, environmental organisations, philanthropy like the Oak Foundation and Paul M. Angell Family Foundation, and regional governments. Another example is the Just Energy Transition Partnership (JETP) in Senegal, involving international partners, philanthropy like the Rockefeller Foundation and Bloomberg Philanthropies, and communities in Africa. Launched in 2023, it aims to boost renewable energy in Senegal’s electricity mix to 40% by 2030. These partnerships are what is envisaged in the UN’s Sustainable Development Goal 17, which emphasizes multi-stakeholder collaborations among governments, businesses, civil society, and individuals to share resources, knowledge, and technology.
WINGS cites the benefits of multi-sectoral partnerships (MSPs) when they are properly managed:
At the local level in Canada, one of the most influential models of MSP has been the collective impact work fostered by the Tamarack Institute and its Vibrant Communities Initiative. Another example in Canada is the collaboration scaffolded by Shorefast to develop local communities and economies. Shorefast describes its work as “forging a new path at the intersection of business, philanthropy and community development”.
The most interesting opportunities for multi-sectoral partnerships in Canada today will involve a combination of innovative financing, expertise and advisory capabilities, supported by a backbone organization or purpose-built platform. Philanthropic funders have many opportunities as providers of risk capital and impact investors to engage in these partnerships.
Here are some examples:
Food and Agriculture: MaRS Discovery District is collaborating with the Farm Credit Corporation to launch a Food and AgTech Mission which “aims to mobilize capital, coordinate adopters and accelerate ventures that will strengthen Canada’s food system” through a venture accelerator and a corporate adopter cohort. These will be guided by a advisory body of experts and stakeholders from industry, finance and the innovation community, who will identify market barriers and enable large-scale adoption of agri-food innovation. The founding coalition members include representatives from Wittington Ventures, S2G Investments, TELUS Agriculture & Consumer Goods, The Arrell Family Foundation and NYA Ventures.
Affordable Housing: The new federal agency Build Canada Homes offers an opportunity for the application of innovative financing partnerships to support the building of more affordable housing options, as described in a recent article in The Philanthropist Journal on how philanthropy can help Canada build its way out of a housing shortage. Nonprofit organizations such as New Commons Development already demonstrate the impact of a nonprofit real estate developer partnering with community organizations and attracting philanthropic investors to develop affordable and sustainable housing.
As WINGS points out, philanthropy can play a unique catalyzing role in MSPs. It can provide risk capital. It can also provide networks, expertise and convening power. Philanthropy can concretely engage in MSPs by acting as a convenor, providing patient, risk-tolerant capital, supporting experimentation and early-stage innovation and ensuring that marginalised groups and Indigenous communities have a voice in decision-making and access to resources. Local philanthropy can help to boost and empower local or grassroots organizations closest to the problems and able to work on solutions. Communities need to develop partnering bodies such as community trusts and co-operatives. Public sector bodies such as regional development agencies and autonomous public corporations need to acquire new risk assessment frameworks that permit more flexibility. There is much to do for all partners to pull off these MSPs. But their impact on the complex problems we face locally, regionally or globally, can be enormous. Certainly, worth allocating some part of a philanthropy’s portfolio for the long term.
Why is philanthropic collaboration so difficult? Much is said about collaborating, but much less is done in practice, it seems. This is true even in the face of the complexity of the issues that philanthropy addresses, the increasing push for community partnerships, and the additional leverage to be had from funding and working cooperatively. Foundations in general are reluctant to co-fund, and unwilling to cede their control over strategy and allocation of their funds.
This is not unique to Canada. Collaboration among foundations across the world is not common. Collaboration across sectors is even rarer. Why is this the case? Three networks for philanthropy have partnered to study the barriers to philanthropic collaboration. The result of their analysis is summarized in a new report Building Foundations for Collaborative Transformation co-authored by WINGS , the global network for philanthropy, Philea, the European foundation network, and The Partnering Initiative, a UK nonprofit dedicated to professionalizing the practice of collaboration.
From June to December 2024, the three partners conducted a needs analysis involving over fifty foundations across the world through a survey, interviews and workshops. These foundations ranged from small to large and from family to corporate. A couple were Canadian; most of the others were European, South American or Asian. Most had an interest in partnership and therefore were eager to participate. The study sponsors note that this might lead to an overrepresentation of foundations already engaged in collaboration, but the researchers feel that their practice aligns with a growing interest across the philanthropic field.
So, what did all this research reveal? Unsurprisingly, the surveyed foundations report that they have confidence in their partnerships with community organizations and with other funders. But cross-sectoral collaboration is rarer. They have much less confidence and less engagement in collaborations with the private sector or government. More significant are the institutional barriers to collaboration, especially collaboration intended to bring about systemic or transformational change. Most foundations are not structured for effective long-term collaboration for systems change. They don’t have the mindset, the staff skills, the investment flexibility or the ability to understand or track progress towards such change. Indeed, they would say that this is not their mission. But for those who believe that private philanthropy must respond to the systemic economic, environmental and social disruptions that we face, the need for a collaborative approach is pressing.
How to meet this pressing need? How to become “institutionally fit for partnering “as the report puts it. Based on the responses of participating foundations, it appears that the gap is primarily in operational and implementation capabilities. The will is there but the way is not. “While foundations increasingly recognise the value of partnerships at leadership levels,” says this report, “many have yet to translate this commitment into the practical tools, training, and incentive structures needed for implementation”. Foundations interested in collaboration must reconsider their internal practices (funding cycles, application and reporting requirements, staff training and incentives etc). They may also need to invest externally to build enabling environments for collaboration, such as sector infrastructure, technical assistance to partners, and regulatory policy change. And they may need to reconsider their funding strategies to take a more active role in convening, creating and sustaining collaborative structures for themselves and their partners.
One such collaborative structure is co-funding. This is a structure that is still not widely used, for many of the reason cited above. Nevertheless, done well, it is an important way in which to leverage philanthropic funds. A recent piece by Nick Grono, the CEO of an American collaborative fund, the Freedom Fund, suggests how to set up a collaborative fund effectively. He cites three different types of collaborative funds: single donor-driven; funder co-created; and community-led. Canadian philanthropy has seen examples of all three types, many of them developed only in the last decade. In the environmental sector, the Clean Economy Fund has been operating for several years now to draw environmental funders together around the goal of a transition to cleaner energy. The Ivey Foundation has been an important driver of this collaborative fund, joined by other foundations such as Trottier. An example of funder co-creation is the Workforce Funder Collaborative, bringing together funders in the Greater Toronto Area to support workforce innovators. Two examples of community-led funder collaboratives are the Foundation for Black Communities (also cited by Grono) and the Indigenous Peoples Resilience Fund, both supported but not led by private funders.
Grono is obviously a fan of collaborative funds. But he cautions that there aren’t enough examples of how to establish these funds or platforms for matching funders with interesting fund opportunities. He wants a more systematic approach. In his view, “by sharing more openly about the origin stories of highly impactful funds, and by fostering more structured pathways to fund formation, philanthropists can ensure collaborative funding models thrive”.
The Gates Foundation has led work in this area and shared many lessons learned. The Bridgespan Group has provided much data and evidence. So, we do know more now about how to foster collaboration and overcome barriers to practice. As a new generation of practitioners rises to leadership in Canadian and global philanthropy, I expect to see an acceleration in collaboration that reflects a new understanding of how private philanthropy can increase its impact. In five years’ time, the question for foundation leaders to ask themselves will be “why aren’t we involved in a collaborative”, rather than “why should we go beyond our own organizational walls?”
Postcript: A Summer Philanthropy Bookshelf
For those who want to spend some of their summer reading more about collaboration in philanthropy or other philanthropic topics, check out my reviews of philanthropy books over the years, with links to be found here.