Academic researcher, Dr Katy Adams, explores how competitive funding can make collaborative working between non-profits less visible and less valued, despite its importance to organisational impact, and considers how funders can help to change the situation.
The paradox of competitive funding
Non-profits seeking funding are evaluated individually, alongside other organisations competing for the same resources. Much of their impact, however, depends on their long-term collaborative networks. These help them share advice, signpost people to the right services and support each other through daily challenges. For smaller non-profits, which generally lack resources, these connections are invaluable, and being embedded in such an ecosystem can have considerable influence over what a non-profit can achieve.
This creates a paradox: whilst non-profits are busy collecting the evidence they know that funders require, the importance of their connections with others in creating their success can go unrewarded. Although many funders now ask for information about a non-profit’s partnership working (and some even explicitly fund collective operations), funding systems often award less attention to the significance of wider networks for non-profits’ impact than the importance of their individual efforts. This leaves these connections open to the risk of inadequate support and resourcing.
Non-profits’ reliance on networks and relationships
The connections and joint working patterns between smaller non-profits often emerge indirectly. Organisations may come together as part of a wider local project or get to know each other over time as staff and beneficiaries move between them. (I’ve often seen cases of individuals supported by one organisation begin to volunteer elsewhere, creating a link between the two.) They can also be created strategically, such as through meet-ups organised by the local council or infrastructure organisations.
Working alongside others is not always positive. I’ve had conversations which have revealed animosity or clashes in culture or ambition between organisations. Nevertheless, my experience working in and researching smaller non-profit organisations has repeatedly shown the extent to which they rely on networks of trusted connections to share resources, information and experience. These save them time, reduce duplication, and motivate volunteers and staff. They also make it much more likely that organisations can achieve their intended goals. For most non-profits, being part of a wider network strengthens not only their operations but also their ability to achieve real success.
Developing stronger, more effective organisations requires funders to pay attention not only to what non-profits achieve, but also to the relationships and connections which make this possible.
The competitive nature of individual funding
Most non-profits rely on external sources of funding, including individual and corporate donations, foundation grants, and public contracts. Some of this funding actively supports partnership working and stronger connections across the sector, and funders increasingly want to know more about how non-profits fit into local networks. Funds often continue, however, to be distributed according to comparisons of perceived individual merit and impact.
There are many benefits of funding the achievements of individual organisations. It helps with quality control, highlighting non-profits’ areas of weakness, drives innovation by encouraging non-profits to stand out from the others, and respects donors’ right to choose where to direct their funds. Its criticisms, however, are also well-known. Time and resources are taken away from operations and spent instead on marketing, applications and pitches, creating a burden which weighs particularly heavily on smaller organisations with limited fundraising capacity. What is discussed less often, however, is how awarding funds based on individual outcomes impacts on non-profits’ collective working.
How funders shape non-profit action and investment
Funders’ focus on individual outcomes has two chief consequences. Firstly, it can make it harder for non-profits to justify investing in relationships and networks, since they may perceive that this effort won’t be appropriately rewarded and will detract from what increases their likelihood of securing funding.
Secondly, it can shape the data non-profits gather on a day-to-day basis. Only rarely do I come across non-profits which monitor their connections with others in the sector as closely as they do their other outputs. More common are linear narratives of how they identified and solved a problem or issue, with mentions of other voluntary sector actors limited to notes of referral sources and signposting destinations. Although their ability to achieve these solutions is strengthened by their connections with others, these are not often recorded.
Take, for example, a food-crisis support charity in the East of England I recently came across. This charity relies on information from other organisations about where need is greatest in the local area, so it can target its distribution schedule accordingly. The time workers spend building and maintaining the relationships that allow such information-sharing is rarely included in planning or captured in data, despite how important it is for the charity’s ability to support the local community. Non-profits have learnt to measure what funders demand.
This behaviour by non-profits is entirely rational, reflecting a prudent use of often limited resources. It results, however, in limited monitoring, recording or recognition of how they work with others and depend upon them, despite the prevalence, benefits, and at times necessity of these relationships.
The consequences of funders’ choices
When funding decisions are based primarily on individual achievements, non-profits present themselves and their projects accordingly. Funding strategies which fail to recognise and resource the work required to sustain cooperation and its contribution to impact therefore result in the value of relationships and partnerships not being adequately measured or appreciated. This leads to a further emphasis by funders on individual achievement and an on-going lack of investment in day-to-day joint working. When this emphasis occurs on a macro-scale across multiple funders, this risks the sector’s collective capacity and makes it harder for those supporting the sector as a whole, such as infrastructure organisations, to demonstrate their effectiveness.
We need to consider the attention paid to collaborative working when making decisions around how to award funding. Funders need to think about how to better recognise and resource the networks which underpin non-profits' impact. How can they better support the role a non-profit plays in its wider networks, or increase the capacity and effectiveness of infrastructure organisations and partnership opportunities? Is this something which requires collective effort rather than individual action? And is it possible to do this without undermining the benefits of competition or placing more demands on applicants? We don’t need to abandon competition, but rather consistently and collectively appreciate how funding outcomes are often not achieved through organisations acting alone, but through effective networks and supportive relationships. Developing stronger, more effective organisations requires funders to pay attention not only to what non-profits achieve, but also to the relationships and connections which make this possible. Otherwise, they risk overlooking precisely what makes such achievements possible.
The Funders Collaborative Hub publishes a range of perspectives. The views expressed here are those of the authors, not necessarily those of ACF.
