Making donations can be just as complicated as financial investments — a challenge that has spurred a recent surge in funder collaboratives, in which individuals or institutions join forces with a shared philanthropic goal.
Such collaboratives have seen a spike in recent years, with more than half of philanthropic funds launched in the past decade, according to a survey of 200 such funds by The Bridgespan Group, a Boston-based firm that advises philanthropists and nonprofits. Respondents estimated annual giving of $2 billion to $3 billion in 2021.
When Mark Stoleson and his partners co-founded Legatum, a Dubai-based investment business, in 2006, they embarked on a parallel mission to allocate some of their capital to helping others. Stoleson and his co-founders searched for an organization that could provide prospectus-level information and analysis on philanthropic opportunities — but couldn’t find one.
So one of the partners established Geneva Global, among the first platforms for funder collaboratives or collaborative philanthropy. Geneva Global uses rigorous due diligence, reporting and management to present philanthropic opportunities in a way that family offices, ultrahigh-net-worth people and other capital allocators can understand, Stoleson said.
“If you want to turn your money into meaning,” he said, “then you need to be just as mindful about your philanthropic investments as you are with your financial investments, not unlike you would with a company that you might want to invest in.”
- Funder collaboratives are joint efforts by individuals or institutions with a shared philanthropic goal.
- More than half of them launched within the past decade.
- They operate with a lean management team and focus on a specific cause.
- Their advantages to family offices and ultrahigh-net-worth individuals: lower costs and fewer resources required, increased transparency and targeted reach
After learning from the success of Geneva Global, in 2006 the Legatum co-founders established The END Fund, the only private philanthropy initiative focused on ending neglected tropical diseases.
Although different models exist, many funder collaboratives operate with a lean management team that relies on those closest to the problem to advise where the funds will have the greatest impact. Most funder collaboratives focus on specific causes, bringing expertise that other organizations — including nongovernmental ones — typically lack.
The reduction in costs and resources, increased transparency and targeted reach resulting in greater impact have proved to be an attractive model that’s expected to continue growing.