Collaboration : Flying in formation

With over 25,000 charities currently registered nation-wide, New Zealand has one of the highest ratios of charities per person in the world. This is prompting fears of unnecessary competition and duplication of activity. In the private sector, industry rationalisation such as merger, acquisition or closure would probably eradicate the problem. In the charitable sector, however, merger is dirty word.
Over in the United Kingdom, recent survey found that only three percent of charities had ever considered merger as strategic option. In the past four years there were only 260 mergers out of total population of 171, 000 charities: paltry 0.15 percent.
In light of this reluctance to merge, collaboration has been seen as an important way to enhance the quantity, quality, accessibility and cost-effectiveness of services, and reduce gaps and overlaps in the provision of outputs in the charitable sector.
The principles of good collaboration are well established. The main challenge for philanthropic trusts and government, I contend, has not been to get charities to collaborate well, but rather to get them to do it at all.
Financial incentives such as priority funding for collaborative bids, milestone funding to check the legitimacy of collaboration, and foundations funding together (thereby leading by example) tend to attract the most attention. Since resource scarcity is one of the main drivers for collaboration, and access to funding is one of the most obvious leverage points, it will be no surprise these financial incentives to collaborate have been popular in New Zealand, especially with our foundations.
However, there is more to incentivisation than just financial levers. The broadest view of the meaning of ‘incentive’ – an incitement, provocation or spur – encourages us to consider the potential of non-financial incentives as well.
These include: convening dialogue around key issues and core purpose; education programmes aimed at promoting best practice and developing collaborative not-for-profit leaders; providing analysis of successful collaborations; mapping issue areas and deliverers; providing collaboration matching and brokering services; making admin systems more collaboration friendly; and supporting the development of shared services.
So which are most likely to work? Interestingly, when last year I investigated the issue for research project as part of my University of Auckland MBA programme, I found that leaders of charities and foundations see the world in slightly different way.
In general, the foundations canvassed ranked financial incentives as having the highest potential. However, charities ranked convening dialogue, leadership development and promoting shared services above financial drivers.
And while it is accurate to say foundations were more supportive of financial incentives than charities, it would be wrong, to say that they were universally supportive of using them in isolation.
People from several private foundations made negative comments about the unintended consequences of financial incentives. One cautioned for the careful use of such incentives, saying they can be either “a gateway to long-term change or window dressing”. Another warned that “high money can start to distort behaviours”.
In their work ‘The inter-agency services collaboration project’, published by The Wellesley Institute in Toronto, Canada, Joan Roberts and Pauline O’Connor recommended that funders needed to avoid “forced collaboration” and not “impose their own agendas”.
It appears that many charities see financial incentives as falling into this area: being done to, rather than with, them.
In my own research one person from local health charity commented that they could “see the merit of resource-based incentives but not on their own or accompanied by ‘you must do this’ attitude”.
As another local health charity put it: “I can see incentives working well as part of larger strategic goal not as gun to the head. We need to be sold rather than told.”
Charities were far more supportive of non-financial incentives, particularly those that helped build trusted relationships and set direction and consensus. “I prefer inspiration rather than the stick,” said one regional migrant charity.
“Let’s educate, talk and empower first,” said national health charity source. “I certainly would not go with just financial as I think it is frighteningly missing the point.”
Foundations also saw merit in non-financial incentives and spoke positively about their ability to build long-term attitudinal change. “Non-financial incentives take longer to work but have the potential to permanently change human behaviour,” commented private foundation. “Focussing on the environment and purpose will bring more long-term success – you need to ‘get it in the water’, normalise it.”
Ultimately foundations and charities seem to agree that non-financial incentives have the potential to create long-term change. And the main point of difference becomes the amount of financial incentive present in balanced incentive portfolio of incentives including both financial and non-financial options.
“A mix of both is what we are finding works,” said someone from private foundation. “Whilst I am tempted to say financial in the short term and non-financial in the long term, in reality I think you need both for the duration,” said gaming trust respondent.
A focus on financial incentives has limited wider-scale consideration of the full range of tools that could be used to encourage collaboration. It has also coloured perceptions of the practice. One person from private foundation went as far as characterising the use of incentives with charities as “blackmail, bribery and arm-twisting”.
By widening their view of incentives to include non-financial initiatives, foundations – and perhaps even government and businesses – may be able to encourage sustainable collaborations that are capable of solving complex, cross-cutting problems by transcending organisational boundaries. M