Can Individual and Institutional Donors Be Friends?

For all the growth in cross-sector collaboration over the past decade, one fact remains distressingly true: Individual philanthropists and institutional foundations don’t learn from each other nearly as much as they should. The reasons for this are many: different languages, different priorities, lack of a natural meeting ground. But ultimately, these aren’t reasons, they’re excuses—like that song by War from the 70s goes, why can’t we be friends?

To address this gap in the sector, Social Venture Partners (SVP) and the Ford Foundation convened a group of SVP Partners (major individual donors), from eight SVP chapters across the United States, who had a joint interest in education and systems change. We came away from the day with the understanding that despite some enduring differences, our perspectives and work are a lot closer than we thought. And to us, this is good news for the sector.

Why is it important that individual and institutional donors collaborate more? One reason is information flow. Foundations have rivers of reports, analyses, data, studies, and evaluations streaming in about what kinds of interventions do and don’t work in education, the arts, environment, health—you name it. Sadly, this flow of information is often one-way. Grantees and consultants write them, send them to the foundation, and that’s the end of it. Individual donors would kill for that kind of intelligence about the fields and communities in which they work. Let’s break it out of jail!

Another reason is sustainability. None of us can create systems change alone. To tackle really hard problems, we need institutions and individuals to work together; there is no other way. Individuals bring assets to the table that foundations don’t possess, and vice versa. SVP, for example, has local-level knowledge, personal engagement with grantees and systems, and a network of hundreds of engaged philanthropists with entrepreneurial drive. Ford has a global network of grantees and influence, and systems change work is in its DNA.  Individual-institutional donor collaboration can bring diversified sources of income to nonprofits. Individuals contribute a vastly greater share of nonprofit revenue than foundations, which can bring worthy, vetted groups to the attention of donors strapped for time to conduct their own research. Organizations can also benefit from more than a check. There is great value in the deep commitment of funding partners who are willing to listen to a nonprofit’s goals, and roll up their sleeves to help it build the capacities, relationships, and additional resources it needs to achieve them. This is where we see a real learning and performance curve for the field, given low levels of trust between nonprofits and funders. Funding partners, whether foundations or individuals, need to learn the listening and engagement skills needed to build that trust.

A third reason individual and institutional donors should collaborate more is so that they can reality-check each other. Both are vulnerable to their own kind of hubris. For foundations, it’s that we have all the answers. We can sit in our office suites and boardrooms, and figure out what’s best for the communities we serve. For individual donors from the business world, it’s that we have all the tools, or an infallible approach that everyone would benefit from if they could just get off their duff and implement already! What’s the holdup? We all have a lot to learn here about building genuine feedback loops and listening to the wisdom of the people closest to the work. None of us does this well.

What did we learn and what are some potential next steps?

• There’s a lot of potential synergy. Both SVP and Ford are big fans of evidence-based approaches, for example, and we thrive on identifying visionary leaders and funding them to pursue big goals. We have patience, are willing to roll up our sleeves and stay in it for the long haul, and we both have a global perspective. We also both want to focus our attention on those closest to the problem and bring more community voices to the table.
• It’s OK to agree to disagree. In education, SVP and Ford have common outcomes we care about, but we don't always agree on means. Many SVP Partners favor charter schools, while Ford focuses on strengthening public institutions. But in the interest of finding workable multi-sector solutions, we can agree to disagree and find language that allows us to focus on the areas where we do agree—a critical component of private, public, and nonprofit sectors working effectively together.
• We can help each other do better. The journey toward systems change for many SVP Partners is rich and worth understanding better—in many cases, their interest in systems change emerged organically through work on the ground or personal experience with inequality. "I won the education lottery, and I see what a difference it's made in my life," said one. "I want that opportunity for more of our kids." Another observed, “When I realized the problem was solvable, it became a moral obligation to do something about it.” At the same time, they recognized that they don't look like those they're trying to benefit—a promising venue for future collaboration, given Ford’s expertise on engaging and empowering communities to exert their own agency.
• Common challenges deserve joint attention. While recognizing our own foibles, we see from our work in the sector that nonprofits face endemic challenges of capacity, often tied to funding models that are too restrictive and focused on project funding. How to promote genuine, effective cross-sector collaboration remains an enduring challenge, which we share as funders.

We hope that dialogue like this continues and turns into direct action, and we invite others to join by reaching out to us.

Read more stories by Chris Cardona, Hilary Pennington & Paul Shoemaker.