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Notes from the Field

Wooing Key Strategic Partners

Some funders are employing a holistic model for community development projects.

The views expressed in this report are those of the author(s) and are not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System.

I recently became aware of a trend funders are using to identify key strategic partners. Before joining the Cleveland Fed last year, I worked in the nonprofit industry. One of the challenges we faced was competing with other nonprofits for a finite pool of money that funders typically awarded to individual grantees. Organizations like mine all worked separately to make a case for how we could put those dollars to best use. The success of a project was determined by the capacity of the individual organization to deliver and the impact the project had on a neighborhood.

Now funders are employing a more holistic model, where multiple entities work together to solve complex issues facing communities. Multiple organizations working together can not only enhance and deepen understanding of the breadth of these issues, but they are also better equipped to devise and effect solutions. This collaborative approach aligns a cross-section of agencies, including non-profit, government, corporate, and philanthropic, and allows for coordination of resources. Organizations working together toward the same goal can use the same methods to measure outcomes. This collective impact approach can be applied to a range of complex issues involving community development, education, workforce development, and health.

So, what does this mean for organizations seeking a foundation’s support? One key is to become the lead organization in a strategic partnership. Funders are looking for organizations to take a leading role in strategic partnerships. Strategic pairing of organizations allows for capacity building for communities. With resources becoming scarcer, funders are looking to achieve the highest and best use of their investment dollars with organizations that collectively can produce the desired outcomes.

Here’s an example of what can happen. A nonprofit whose board I serve on will receive funds because it is a lead organization in a strategic partnership. What this means is the organization will go from building one or two homes a year to redefining its community’s central business district. It will be able to bring multiple new businesses into the neighborhood, change the dynamic of a community by providing an art center, and provide affordable safe rental housing in its community.

We are also considering providing a community kitchen. Many exciting ideas came out of a community quality-of-life planning session this past summer. These changes occurred because there was cohesiveness among many organizations and the right leadership in place to organize multiple entities. This wasn’t an easy process; it took years of getting the right leadership in place to achieve these goals and be in the position to impact this neighborhood in a significant way. In the end, though, such collaborations can yield wonderful benefits to a community.

And that’s the name of the wooing game these days.