Multi-stakeholder networks are an increasing, and increasingly vital, feature of the social sector, yet they remain inadequately resourced, even by comparison to the broader nonprofit space.

 

What we commonly encounter at Collective Mind in our work as advisors and consultants is that funders are often focused on sectors, issues or topics. They may fund a network as complementary to other, traditional organisational grantees within their area of interest, but they don’t necessarily seek out or focus specifically on networks as an explicit or distinct funding strategy. One reason is that donors may not be fully aware of the distinctive character of networks, the types of change they can achieve, or how long it takes to achieve it. At the same time, networks struggle to clarify their distinctiveness and the implications for what they can achieve and to demonstrate their impact or to articulate a compelling value proposition. Funding for networks is thus structured for programmes or projects rather than network activities, staffing, and collaborative infrastructure. It is inadequate or inappropriate – or both – for the network to effectively engage its members in collective efforts.

Our in-depth research on funding networks bears out that current practice is based on an obsolete and inappropriate operating model, devised for non-profits and fails to meet the complexity of networks. A new operating model for funding networks would define the people, structures, and processes that are appropriate for funding networks. It would be generated from a deep understanding of the nature of networks: encompassing diverse stakeholders within horizontal, as opposed to top-down, organising models that facilitate and coordinate those stakeholders’ efforts towards system-level change.

Funders must redesign how they fund networks

From our research, we’ve laid out the following principles for designing a new, more relevant operating model and we’ve organized these principles within the key components of people, structures, and processes.

 

People: Who’s involved and how

Networks are relational. Funding a network is funding the network’s membership. They have the potential to contribute to systems change because they can embody the elements of a system and through active, meaningful engagement by network members,  new forms of behaviours, patterns, and structures can emerge. This engagement is what funders must support.

Widen the funding relationship from just network staff or the network’s host to the full network membership.

A traditional approach to funding often sees a single holder of financial and programmatic responsibility, typically a host or backbone organisation. But while that may be administratively expedient, it can undermine both network operations and potential impact.

When funding is channelled through a host or backbone, too often the backbone or network manager(s) are assumed to have a greater level of responsibility, accountability, and control than is both possible and appropriate. As one of our case study respondents noted:

‘They fund us because they trust us …but they also put too much pressure on us to act as the only voice of the network…This mentality and relationship structure perpetuates inequity. Small, grassroots organisations simply do not get funded. Voices from marginalised communities are not heard.’

While funds may still be channelled through a single organisation, the network’s full membership should be involved in designing and implementing strategies, plans, and activities that utilise those funds. Processes, structures, and systems should be put into place – or accessed where they already exist – to use funds collaboratively.

Interact with, or participate in, the network by being adaptive and flexible based on what the network wants.

The nature of the funding relationship is inherently power-laden, which is especially mismatched in the case of networks that function best when power is distributed and dispersed across the membership. Donor influence can be manifest in numerous ways and, in the worst cases, funders may use networks as a means to their own ends: as one donor respondent noted: ‘we have…learned to be respectful of its constitutional objectives rather than utilizing it for our objectives… as this can have negative impacts on the network itself.’

All the donor respondents in our research noted the influence and power they have within the networks they fund – and articulated ways to mitigate it.

In particular, respondents noted the importance of effective network governance and the donor’s responsibility to defer to decision-making within the network. As one put it:

‘to mitigate the distorting effect our presence as funders might have on the dynamics and decision-making in a network, we have tried to exercise the utmost caution in how we show up and what we say. We have also tried to show up with deference to the networks’ leaders and members and the experience and expertise they bring regarding the issue.’

At the same time, recognising their influence doesn’t mean that funders shouldn’t engage with the networks they fund. They can play a constructive role. One network respondent stated: ‘I have had [funders] help create new connections and ask novel questions, which are both extremely valuable. I think if a funder has a question about the way things are working, they should never be shy to ask unless it really borders on micro-management.’

In other words, the most appropriate relationship for a network donor can be that of a partner, not just a funder, but this should be led by the network itself. Our donor case study respondents said that they base their role(s) on what the network wants to accomplish and asks of them. As one  put it: ‘we play the role that the network (or grantee managing the network) asks us to play and come alongside them.’

This requires a profound recognition of your own influence within the network and also the building of open communication, transparency, and trust – the willingness of the donor to trust the direction of the network and the network to communicate openly with the donor about how to best support them.

It further requires eliciting guidance and feedback and the openness to apply it.  Such an approach fundamentally shifts power among the parties involved, which network funders must be prepared for.

 

Structures: How to structure funding

How funding is structured – in terms of what is funded and how it’s funded – must match the multistakeholder, relational aspects of networks, how they operate, and what they can achieve.

Fund the network’s collaborative infrastructure.

Collaborative infrastructure is the structures and processes through which members organise and take action within the network. These foster community building, knowledge and learning sharing, coordination of activities, execution of joint actions, and more. They facilitate engagement and participation by network members, without which nothing can be accomplished.

A key component of a network’s infrastructure is its network management. Multiple case study respondents, both networks and donors, noted the indispensable role that network managers play in a network’s effective operations and achievement of outcomes.

Because the role is vital, funding network staff is essential. Staffing must be ensured in order to foster spaces for learning, sharing, and action and to build cohesion within the network as the foundations for shared impact. Typically viewed as undesirable ‘overheads’, staffing costs are in fact one of the most fundamental inputs to a network’s success and should attract significant investment.

Fund the network’s collaborative activities as co-designed by the membership.

As one case study respondent noted, when ‘networks struggle to ensure participation and involvement by large proportions of their memberships [they] end up being driven instead by the governing body and/or by the Secretariat …[and] start looking more like organisations and less like networks.’ To avoid this trap, funding must focus on collaborative activities that are co-designed by the network’s members. Member co-design can lead to stronger engagement and a more accurate understanding of members’ goals and needs. Although true co-design may not always be achieved because of limited capacity of participants, avenues for ongoing feedback need to be integrated throughout design, implementation, and evaluation processes.

A focus on co-design and engagement means privileging process over immediate or direct results. Processes are required to build trust, establish a shared vision, and define ways of working together. Such processes can’t be overridden to focus on quick results without undermining the power and long-term potential of the network. As one network respondent stated, ‘supportive donors understand that the work of collaborations takes time and resources to simply meet together – building trust and reciprocity and [the] ability to work together is essential.’

Fund longer-term arrangements or committed relationships.

These processes take time, which may be at odds with a funder’s shorter-term goals or typical grant cycles.

However, as one case study respondent said:

‘Donors need to be able to provide financial and other resources in ways that are commensurate with the pace, adaptability, and the staff capacity of networks. This means multi-year, general operating support if possible, adopting a trust-based, equitable, and collaborative learning orientation in their reporting and evaluative requirements.’

Where multi-year funding isn’t possible – for example, due to a funder’s own internal constraints – the limitations of shorter funding cycles can be offset by building committed longer-term relationships.

Fund flexibly

One network respondent felt unrestricted funding is ‘helpful in providing us with more flexibility and autonomy to develop work that matters most to our theory of change’.

The ability to shift funding easily can open up possibilities – like following up when one intervention generates the need for another – and allow the network to be adaptable in developing its multi-stakeholder work.

The problem is, as one network respondent explained, ‘we really need to take greater risks, build local capacity, expand our evaluation footprint, expand our advocacy and communication efforts, conduct systems mapping exercises, and, most importantly, authentically engage communities through grassroots efforts. These activities are critical to making an impact, but we cannot find funders willing to invest in these types of activities because the return on investment is difficult to demonstrate.’ Funding must match not just what the funder desires but what the network is focused on and can achieve with the right support.

 

Processes: How to work together

Strong collaborative dynamics can mitigate the risks associated with funding networks and open channels for the communications and trust needed to maximize these investments. The foundation for strong collaborative dynamics is a shared understanding of what we’re doing, how well we’re doing it, and what we expect to achieve.

Assess network operational effectiveness.

Assessing a network’s operational strengths and pain points in an ongoing fashion is the groundwork for practical adjustments that can strengthen the network.

The relational nature of networks implies that gauging this should engage the full membership. One network respondent, for example, noted that they’re ‘working toward an annual member evaluation that assesses connections between members, tracks ripple effects from network connections, resources, and direct support to outcomes in communities, and collects member feedback on our network systems and structure.’

Likewise, the metrics for networks must assess the relationships within it, as these are crucial to their potential outcomes and impact. One donor mentioned that they look at metrics like network density, cumulative strength of ties, and size of the network when undertaking organisational network analysis.

Of course, such an assessment is only as valuable as the actions taken in response.

Measure, monitor, and evaluate outcomes and impact adaptively.

In networks, the linear relationship of funder-grantee-beneficiary is replaced by a web of connections with multiple pockets of ‘beneficiaries’ within and beyond the network and a wide range of possible results. And, given the collaborative nature of work networks undertake and the focus on systems change, it’s often exceedingly difficult to demonstrate impact from specific network initiatives. As a network respondent put it, ‘many things are in our [network’s] scope of influence but not necessarily in our scope of control.’

Because of this, many of our donor case study respondents noted that instead of requiring predetermined outcomes, they’re interested in ‘the network’s particular goals, how they progress towards these goals, challenges that are encountered in that process, and how they will adapt from lessons learned.’

Other respondents, both networks and donors, said they use a theory of change and track higher level outputs and outcomes ‘such as number of community members reached, number of new activities or substantial programmatic changes benefitting communities, community members in decision-making, and emerging collaborations’ or ‘indicators that point toward improvements related to our issue’.

Given the challenges, both networks and funders must grapple with these inherent complexities to demonstrate something meaningful and avoid reporting on outputs that, while tangible, don’t demonstrate real change.

Where to from here

There are inherent risks in funding networks but the inability or unwillingness to fund networks appropriately to match their unique setup and functionality undermines any investment from the start. Funders should consider how these design principles apply to them and embed them at both the level of individual staff engaged with networks and institutionally. A self-aware, thoughtful approach that acknowledges the inherent complexities of funding networks can unlock the potential of both networks and their funders’ investments.

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