When a backbone mobilizes funding for the initiative, as opposed to individual partners contributing resources, it can be easier for partners to align efforts and focus on working together instead of protecting individual resources. Similarly, partners are more likely to trust the distribution of funds from a neutral backbone as having the initiative’s best interest at heart.
However, the backbone needs to take care with this role, as funding is always a highly political and charged issue: a strategic backbone is not only a funding partner for the collaborative, it is also prepared to manage the politics that come with funding.
There are many ways to mobilizing funding, both by reallocating existing funding and going after new funding. An effective backbone is able to tap into their own network of funders, as well as rely on the relationships, fundraising expertise and innovative thinking of the Steering Committee to expand the breadth and depth of the collective impact initiative funding portfolio, whether through reallocating existing funding or applying for new sources of revenue. The backbone can help create foundational supports such as a clear vision and goals, deliberate alignment of strategies, effective engagement of key stakeholders and end users, and a streamlined process for funding the work.
Reallocating Existing Funding
Public funds: Public funding can come from grant programs, long-term relationships with public agencies, or even shifts in policy to redirect dollars. Often public funding is mobilized for the solutions that a collaborative is developing, rather than to support the collaborative process itself. Public funds often require high levels of accountability, and are frequently dedicated to specific purposes, so reallocating these funds often requires a change in policy. These funds are always limited and highly political, so reallocating them often requires advocates, willing public sector partners, and a supportive political environment. A backbone can help facilitate this work much in the same way they help develop and support a policy agenda and, in fact, funding allocations should be considered as part of many systemic change efforts.
Non-profit funds: Non-profits typically have a mix of public and foundation funding, as well as some individual donor giving, which supports their overall mission. As partner organizations come together around the shared goals of the project, a backbone needs to be able ask the sometimes uncomfortable question of how to make the collaborative sustainable through shifting existing funds to support mutually-reinforcing actions. One thing opportunity is to find greater alignment across non-profit partners’ deployment of their funding. For example, if multiple non-profits are all using funding to provide services to the same population in the same geographic area, redeployment of these resources to new populations and areas might expand the total population receiving needed services.
Applying for New Funding
New funds dedicated to the initiative can come from local or national funders. The backbone plays a key role in ensuring readiness to apply because of its positioning within the initiative – the backbone best knows the breadth of the effort and all its players. Thanks to this unique role, a backbone can work to ensure the initiative’s goals and needs are communicated in ways that meet the funders’ Request for Proposal’s requirements. Additionally, the backbone can prepare partners to work towards a common application; sometimes, aligning efforts on one application means facilitating the tough conversations around who are the right partners to be the recipient of funds.
It is important for the backbone to stay true to the vision when applying (directly or as a collection of partners) for funds. Sometimes, the collaborative might attract the interest needed to easily secure funding that may not be the right fit, for example, funding that has strings attached that take the initiative outside of their comfort zone or is not aligned closely with the shared agenda, or funding that is politically charged or has reporting requirements that are too heavy of a lift for the backbone. In these cases, the collaborative, led by the backbone, needs to carefully think through whether these funding opportunities are worth pursuing.
Fundraising plan for various levels of funders/funding: A key backbone role related to funding is mapping out the existing funding currently aligned, or that could be aligned, with the work of the collective. From that map, the backbone can take fundraising to the next level by creating a long-term fundraising plan, which includes various levels of funder engagement, including, but not limited to:
- Traditional funders of the initiative interested in better aligning or leveraging their existing funding;
- Non-traditional funders interested in a particular component of the goals and strategies or a specific innovative strategy; and
- Funders interested in “quick-win strategies” identified by work groups that require smaller amounts of funding that support a shorter-term strategies with some relatively quick results and impact.
A strong backbone of a collaborative that is attracting attention from funders should have a list of fundable opportunities, which have been agreed on by the collaborative, ready. Having a predetermined set of “asks” can make decisions easier and turnaround on grants faster.
In some cases, managing funding as the backbone can feel as complex as managing the whole collaborative. Funding can be from one or many different sources, with different reporting and fund management requirements, which likely vary between the type of funding. For example, the primary backbone funder, the matching funders, and the funders of program-specific work that might be supporting the network, system change, and innovation, are discrete pieces that are likely supported by several sources. Having a system in place, as the backbone, to meet all the reporting criteria can make this process easier. A good partner to engage in mobilizing funding is an organization invested in the collaboration that agrees to be the fiscal intermediary, if that role is not best-suited to the backbone.
Another key part of managing funding is being able to align grant requirements with collective goals. Evaluation and the learning can help support this process by keeping the focus on the collaborative vision and end-of-the-road.
One way in which a backbone can support a collective through funding support is to build in some unallocated budget for the Steering Committee to use, at their discretion, to engage additional supports where needed (e.g. facilitation, youth engagement, school engagement, activities out in the local communities, innovative planning activities, policy advocacy, speakers from other collective impact models, and so much more). This funding can be made available to be used as directed by the Steering Committee to advance innovative strategies that help the work move more quickly and drive toward outcomes. Importantly, the backbone manages these funds, sets-up and oversees subcontracts, and ensures the appropriate use of dollars, but is not the decision-maker as to how the funds are used. These set-aside dollars for innovation and supporting needs as they arise can be catalytic to collaborative efforts that are trying to do work in ways it hasn’t been done before.
Fiscal intermediaries – those organizations that distribute, manage, and report on subgrantees – are often used when backbone organizations lack sufficient capacity or expertise to handle those functions themselves. In a collaborative context, when there are a number of fields and disciplines, as well as perspectives, represented, fiscal intermediaries can serve as neutral organizations, making it easier to bring together diverse entities to work on the issue. Further, fiscal intermediaries may bring other skill sets, such as: research, evaluation, and analysis; training and technical assistance to the foundation or grantees; and funder staff support.
There are clear areas of overlap between the traditional roles of backbones and fiscal intermediaries, so having a backbone serve a dual role may make sense in the context of your initiative. However, tensions may arise from this dual role, and managing those tensions can be difficult.
Resolving these challenges requires:
- Resisting the urge to control the process: Even though you are responsible for reporting to the original funder, exerting a higher level of control may hurt the collective process.
- Making decisions collaboratively: Although some responsibilities must remain with the intermediary, sharing the funding decision-making process reinforces the collaborative nature.
- Being transparent: Although this is important in any collaborative process, it is even more essential when funding is involved. Be upfront about how decisions are made, what changes along the way, and why the changes happened.
- Doing your due diligence: Ensure your partners have the capacity and commitment to use the funding to support your shared agenda upfront.
- Shifting reporting requirements: Instead of the traditional model of having your subgrantees reporting directly to you as their funder, consider having them report to the collaborative to increase transparency and decrease the sense of the backbone being an accountability partner.
- Trusting your partners: Trust that your partners know how best to use their funding to advance the shared agenda. Don’t load them up with detailed work plans, milestones, deliverables, and expectations. Instead, ask them to document how they are using funding to advance the shared agenda.
- To better understand the complexities of integrating a fiscal intermediary role with your backbone role, as well as strategies to decrease the problems, see When backbone organizations become the funder: The use of fiscal intermediaries in the context of collective impact (Foundation Review; December 2015)