Philanthropy and investment firms form funder collaboratives to increase their impact (also called “multiplier impacts”). By pooling resources, funder collaboratives can get more money into a space, rather than just being the sum of donations that would have otherwise gone to the same issue. Working together, funders are able to put larger amounts of money behind impactful ideas, take a wider view of an issue, and take bigger risks.
When a funder collaborative establishes an alliance to direct money into a space, it can also get other philanthropies to put new funding into the cause. By combining larger scale and risk-taking, some funder collaboratives have been able to introduce innovative, effective investment programs that governments and more traditional foundations would not think to support.
Funder collaboratives vary in their legal, financial, and operational structures but generally are structured as “pooled funds” or “co-granting.”
- Pooled funds are funder collaboratives where donors put their money into a shared pot, and then engage in internal processes to figure out where that funding should go.
- Co-granting is where donors do not have any formal commitments to provide funding but are engaged in the process of sourcing investments.
Examples:
- The END Fund was founded in 2012 by philanthropists and investment firms interested in ending neglected tropical diseases, such as trachoma and roundworms. The END Fund has 7,000 investors from 68 countries.
- Since 2019, Farming the Future (UK-based funder collaborative) has helped foundations invest in innovative food nonprofits and agricultural solutions. The collaborative focuses on making the industrial food system more sustainable.
- Blue Meridian Partners (BMP) is a funder collaborative whose platform allows philanthropists and funders to invest in social change together—in areas such as youth issues affecting all Americans, including health, education, and justice. BMP designs high-impact strategies worth tens of millions of dollars and then conducts “capital calls” of a pool of “general partners” to raise the required funds for the investment. Among its partners are multibillion-dollar endowments.
