More than the sum of our parts: how pooled funds are shaping the UK philanthropic landscape

Funder intermediaries are a fast-growing trend in philanthropy, as the Funders Collaborative Hub demonstrates, with over 160 collaboration opportunities currently listed on its website. These initiatives cut across a wide set of issue areas and geographies, and range from newly emerged groups to more established collaborations. The expectations vary – some focus on information sharing or peer learning, others aim to align funding processes or coordinate funding. But what they all share is an acknowledgement that social justice work is too challenging for any one funder to tackle alone and that by working together we are more than the sum of our parts.

As independent consultants working in the philanthropic space, we have experienced an array of different funding approaches and models. Most recently we have run (in the case of Lena, with the UK Democracy Fund) and established (in the case of Alice, with the Power of Pop Fund) pooled funds. This type of funding model sits at the most aligned end of the collaboration spectrum. Pooled funds can take different legal forms but ultimately require multiple funders to contribute money and delegate decision-making authority into a separate entity to advance a particular objective or strategy. The Funders Collaborative Hub currently lists 48 opportunities that involve pooled funding, indicating that in recent years, this form of collaboration has become a more prominent feature in the UK philanthropic landscape.

In the US, pooled funds have been a long-standing feature of the funder ecosystem and there is a growing body of analysis about them. However, there is remarkably little research and discourse about pooled funds in the UK. This prompted the Joseph Rowntree Foundation to commission us to conduct a qualitative research study about pooled funds as a model in the UK funding landscape.

We were interested to explore a range of perspectives about the value of pooled funds and so we deliberately interviewed funders, intermediaries, and grantees who have received different types of funding, to gain a rich and balanced insight into pooled funds as a vehicle: what unique opportunities do they really bring? What are the challenges inherent in this model? And what needs to happen to ensure that they reach their potential?  

Motivations for collaboration

When looking into why pooled funds have grown in number and prominence, we found that some funders want to sustain the more collaborative funding behaviour they first engaged in during the pandemic. Others pool funding on issues that they perceive as new or difficult, to share the risk. Yet others see it as a strategic choice: in the face of complex, all-consuming crises – Covid, climate, economic decline – there is the sense that even as a big funder, issues cannot be tackled alone. Finally, many funders are asking questions about their own power and are exploring avenues to fund in a more equitable and participatory way – something pooled funds have the potential to achieve.

Tremendous potential

It is too simplistic to say that a pooled fund is an inherently ‘good’ or ‘bad’ model. Our research delves into the complexity of pooled funds and explores how much will depend on the fund itself, its guiding purpose and its context. However, our research showed that pooled funds offer tremendous potential and there was an overriding sense that they can champion an innovative and refreshing approach to philanthropy. Perhaps most significantly, pooled funds engage in a different way of funding: one that is strategic, equitable and collaborative. They can also help funders to ask themselves difficult questions; to reckon with their own power and to explore ways in which to place greater equity and trust in their grant-making.

Of course, the research highlights that there are also significant challenges both with setting up and maintaining pooled funds, many of which are linked to inadequate resourcing, a lack of understanding of the pooled fund model and a reluctance among funders to cede power and control. These issues will need to be addressed for pooled funds to reach their potential. This will require hard, but necessary conversations about the imbalance of power inherent in philanthropy and the opportunities to redress this through more equitable models. 

Tools for practical engagement by funders

To support funders in this thinking, and in their practical engagement in pooled funds, our research includes two tools.

First, we identified six key ingredients for a pooled fund to be effective. This is a tool for reflection, discussion and assessment – and in our research we apply it to the Civic Power Fund, a pooled fund we found to be an exemplar of good practice.

Second, we produced a series of guiding questions. These are intended for funder staff and trustees to consider in relation to funding collaboratively in general, and more specifically with respect to initiating or joining a pooled fund.

A major mindset shift

Pooled funds are becoming more mainstream in the UK philanthropic sector and our view is that they are likely to remain a fixture in the foreseeable future. In light of this, funders - and trustee boards in particular - need to be apprised of their value and worth. The scale of the social, economic and environmental challenges we face will require deep, lasting collaboration and funders should reflect on this when evaluating their overarching strategies. This is likely to require a major mindset shift and a reckoning around power structures. Pooled funds offer funders a tool to make this power shift and collaboratively achieve their strategic aims.

Join us to learn more

If you would like to learn more about this research, please join this webinar hosted by the Joseph Rowntree Foundation on 13^th May.