We at Spring Impact work with impact-led organisations to help them achieve impact at scale. We support organisations to design and test scale strategies, scale models and organisational models for scale, and provide coaching support to organisations along their scaling journeys.
We have worked with over 300 organisations in more than 50 countries over the last decade, and unsurprisingly, have found that funding is the number one barrier that organisations face in their scaling journeys. For this reason, we are increasingly working to support funders to adopt a ‘scaling mindset’ in their funding strategies.
While there are many components of a ‘scaling mindset’, this article focuses specifically on how funders can adopt a scaling mindset in funder collaborations. We have used best-in-class examples globally as inspiration for what may be possible in a domestic setting.
Our suggestions are applicable to all kinds of capital, from grant-making to catalytic capital and sustainable investments. We believe the full spectrum of capital is needed, and collaborations are needed among different kinds of funders, if we are to make meaningful progress in tackling big problems.
Five ways funders can use a scaling mindset to collaborate for impact at scale
1. Collaborate to solve problems and shift systems - not just to scale solutions
To create lasting change at scale, funders and implementers alike must centre problems, not individual organisations, models or solutions. Societal and environmental problems need to be tackled through multiple pathways, including service delivery, policy change and mindset/behaviour shifts. No individual funder can do this in isolation.
Funders tell us that when they bring together coalitions focused on solving problems, they increase learning, avoid reinventing the wheel, and unlock large-scale, multi-year funding - because funders have bought into a vision, rather than an individual project.
Co-Impact is a good example of this. They have brought together 57 philanthropists and foundations from 17 countries to support systems change, with a focus on improving underlying government and market systems. One problem they are tackling is gender inequality and a lack of women’s leadership in the the health, education and economic opportunity sectors. To tackle this problem of ‘gendered systems’ they are raising $1bn for a dedicated Gender Fund to provide women-led, locally rooted organisations in Africa, Asia and Latin America with large-scale, long-term and flexible funding.
Collaborating in this way requires funders to understand the funding ecosystem in a particular sector, and find like-minded and complementary funders to work alongside. Co-designing funding strategies to solve a problem is the obvious springboard, but this is not a one-off exercise: funders should regularly come together to revisit the system in which they operate and see where there might be gaps or opportunities to provide further support.
2. Share data to improve decision-making and attract new funding
Data plays an important role in achieving impact at scale. Exchanging market- or sector-level data can help funders make better decisions by providing insight into the effectiveness of different interventions and identifying areas of need that can benefit from additional funding.
Funders can also benefit from exchanging deal-level information. While there are limitations to this kind of data-sharing, due to confidentiality, liability and institutional constraints, it can widen the funder universe in a particular sector by lowering the perception of risk, in particular for new funders, as well as reducing the resources required for due diligence.
FMO (a Dutch Development Finance Institution) and Ceniarth (an impact-focused family office) are two examples of catalytic capital investors that share deal-level information with fellow funders. They share underwriting materials - such as credit papers and financial models from investees - with prospective co-investors, subject to confidentiality agreements, to attract new funders and increase the speed and efficiency of transactions.
3. Collaborate to smoothen the capital continuum
Collaboration among funders can help to plug ‘valleys of death’ in the scaling journey, ie to prevent the organisations, projects or programmes they are supporting from falling through the cracks due to a lack of capital as they seek to scale. This requires funders to take a bird's-eye view of the capital continuum for their sector - knowing who comes before (ie the pipeline) and who comes after (ie where to funnel graduating organisations, to guarantee ongoing access to capital once the funding period has ended).
Having this bird's-eye view also means funders can more easily see where the gaps are on the capital continuum, eg between pilot phase and early-stage growth, or between later-stage growth and scale. Funders can then design interventions to try and fill those gaps. Pre-seed funders can provide post-pilot finance to help companies go further along the continuum and become attractive to seed funders. Seed funders can reach down the continuum to provide more hands-on support to early-stage companies. Growth funders can reserve follow-on capital to support companies as they continue their growth towards commercial viability.
An example of this is Sport England's Volunteering Fund. Sport England mapped how other funders were supporting their grantees, and learnt that there was a significant gap between Sport England's early-stage growth funding and the funding required to test and implement new scale plans. As a result they established the Volunteering Scaling Programme: dedicated funding and capacity building support to give organisations the space and time to plan whilst scaling their impact.
Funders tell us that when they bring together coalitions focused on solving problems, they increase learning, avoid reinventing the wheel, and unlock large-scale, multi-year funding - because funders have bought into a vision, rather than an individual project.
4. Collaborate to pool support services
Pooling capital is an obvious benefit of funder collaborations. But funders can also collaborate to pool support services, particularly capacity-building support services. In many ways, the ecosystem has become a conveyor belt for impact-led organisations, with leading funders, accelerators and platforms all funding, supporting and profiling the same elite handful of organisations. And too often ecosystem players are reinventing the wheel, providing the same kinds of support but using different language, tools and methods.
Pooling support services involves bringing service providers together to refine their relative value propositions, adopt a shared language and build on each other’s offerings to fill capacity gaps. A good example of this is Blue Meridian Partners, a collaborative philanthropic community in the US seeking to tackle the problems that trap young people and families in poverty and limit economic and social mobility. Through some of their accelerators and portfolio support programs, Blue Meridian Partners bring together a range of service providers to provide cohesive, complementary and holistic support to their portfolio organisations.
When funders collaborate to pool support services, it helps organisations to better navigate the ecosystem and find the support they need. It can also result in better, longer-term support being provided to organisations, if funders can push the focus away from short-term technical assistance projects - targeted at closing specific gaps in an organisation’s planning, operational or governance capacity - towards longer-term organisational development. This will ultimately help build more resilient, effective and scalable organisations.
5. Collaborate with implementers, not in a closed shop
Many funders we have spoken with say that the most impactful funder collaborations they have been involved with are those that include a broader range of actors - particularly implementers, ie those delivering solutions. Creating these wider collaborative spaces requires a great deal of trust-building and can take time to yield results, but is necessary for systems change.
Funders have an essential role to play in these spaces by supporting implementers to shift their mindsets from competition to collective action. They can do this by holding space for collaboration, helping implementers to understand where they can best contribute to solving a problem, brokering connections between implementers, and funding implementers for the time they invest in building ecosystem initiatives.
An example of this kind of collaboration is the Life Skills Collaborative (LSC), founded by a group of five funders focused on promoting life skills education in India, which includes 12 implementing organisations. The LSC aims to leverage its collective power to embed life skills in government education systems, and has partnered with four state governments to date.
Collaboration with implementers is also important to address the unequal power dynamics inherent in funding. It creates space for dialogue and accountability between funders and other stakeholders, and gives those with most expertise and lived experience a seat at the table.
Conclusion
For funders looking to achieve impact at scale, a scaling mindset is essential. By working with other funders to share data, smoothen the capital continuum and pool support services, and by centring problems and involving implementers in collaborative efforts, funders can make better decisions, reduce duplication of effort and increase the scaling prospects of the initiatives and organisations that they support.
To find out more, please get in touch with us.
Alice Metcalf (ali@springimpact.org) is a Senior Consultant for Spring Impact, leading and supporting on the delivery of projects, both national and international, across a range of sectors. Alice also leads Spring Impact’s influencing work, working with funders to rethink what good funder practices look like to achieve impact at scale.
Emma Colenbrander (emma@springimpact.org), as Director at Spring Impact, works with a range of mission-driven organisations to support their scaling journeys. Before joining Spring Impact, Emma founded and led the Global Distributors Collective, an alliance of over 200 organisations that work to drive distribution of beneficial products to low-income households.
Share your experience
Do you have a viewpoint on the benefits or challenges of funder collaboration? Whether it comes from experience as a grant-maker, grant-seeking charity or another perspective, get in touch to share your thoughts - and help us improve funder practices together.
