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Category Archives: Nonprofit sector

The Rewards and Pitfalls of Collective Impact

Collective impact (CI) is an exciting trend in the nonprofit sector within the past decade. Many organizations, often from all sectors, unite to “move the needle” on a complex social challenge like eliminating poverty or achieving educational equity. The classic article that describes CI is Collective Impact, and a leading example of a CI initiative in the Seattle area is the Roadmap Project.

At the 2014 Independent Sector conference in Seattle this week, I had the opportunity to discuss funding trends, including CI, with a group of nonprofit executives and funders from across the country. The conversation highlighted both benefits and challenges associated with the model. The following is a list of things we discussed, with some grantees organizations offering interesting specific examples of how the approach can have unintended consequences.

Benefits include:

  • Better odds of achieving systemic change through collaboration and uniting the expertise and effort of many organizations
  • Alignment of outcomes
  • Research and evaluation component to prove whether specific interventions are effective
  • Easier avenue for funders to invest in a particular area, with their pooled funding distributed by a backbone organization to a number of nonprofits doing relevant work on the issue
  • Opportunities for funders to be more highly engaged
  • Forum for diverse stakeholders to build relationships, learn from each other, think systemically and develop a more sophisticated understanding of the issue and potential solutions
  • Potential to see results more quickly since so many are applying themselves to achieving the same outcomes

Challenges include:

  • Funders shifting funding to CI initiatives and defunding some grantees in the process. For example, many CI initiatives are place-based, so if your organization works on the focus issue outside the target area, you are not eligible for funding.
  • A substantial percentage of funding goes to the backbone organization (for convening, planning, granting and evaluation) rather than to direct services
  • Since there is a middleman, grantees may lose the opportunity to have a direct relationship with the funders
  • Funded nonprofits often face different and more demanding requirements to receive funding from the initiative than they had prior from the individual funders. Pooled funding can mean a pooled—and lengthy—list of requirements.
  • It can be very political to compete for CI dollars, and there is intense pressure on nonprofits to attend planning and coordinating meetings in order to establish relationships and be eligible/competitive for funding. This requirement to be at the table effectively shuts out smaller nonprofits with limited staffing capacity (including most organizations led by people from marginalized groups).
  • Collaboration is hard and time-consuming. Participating nonprofits are typically not directly compensated for their collaboration time.
  • Did I mention that there are a lot of meetings?