The two official definitions of the word ‘incentive’ in the Oxford English Dictionary are 1. “something that arouses feeling, or incites to action; an exciting cause or motive; an incitement, provocation, ‘spur’” and 2. “An incentive payment, scheme, etc”, (1989). Funders attempting to incentivise collaborations appear to have placed more weight on the latter definition rather than the former. However, whilst financial incentives are an important area for investigation, the potential utilisation of non-financial incentives is an equally important consideration.
In determining the range of possible incentives, the academic literature provided both direct and indirect support. A number of authors considered individual incentives directly in their work, whereas others, through exploration of positive (and negative) characteristics within collaboration allowed us to devise incentives that would encourage (or mitigate) these characteristics. The result is the identification of 19 incentive options that could be explored fully during the field research stage.
3.1 Financial Incentives
Since one of the main drivers for collaboration is resource scarcity (Butterfoss, et al., 1993), and restrictions of access to funding is one of the most obvious leverage points that can be used by funders, it will be no surprise that financial incentives to collaborate were popular (with funders at least). Since financial resources are critical to organisational survival incentives self-interest and survival instinct could be an additional motivator for the not-for-profit organisation to respond to the incentive (Provan & Milward, 2001).
Incentive Option 1: Priority Funding For Collaborations - It is already common for funders to encourage collaboration by either ring-fencing funding so that it can only be applied for by collaborative partnerships or clearly stating their preference to fund collaborative ventures. In addition, it would be possible to have financial contracts that have provisions for fund transfers and reallocations in case of sub-optimal collaborative activity (Hill & Lynn, 2003).
Incentive Option 2: Joint Funding - Whilst 99% of joint funding is ‘accidental’, a result of not-for-profit organisations applying to multiple funders in order to develop the resources required to survive, the practice of funders collaborating to fund delivery collaborations is an accepted incentive (Nowland-Foreman, 2008). In this vein, Tindall Foundation, Todd Foundation, Wayne Francis Charitable Trust and JR McKenzie Trust launched the “Working Together More Fund” in 2009 in New Zealand as a method to fund and model collaboration (Wilcox, 2009). This approach was considered likely to encourage funders to work together in a more holistic way on different parts of the process rather than funding alone (Nowland-Foreman, 2008).
Incentive Option 3: Block Funding - Block funding is an unrestricted grant often to a specific locality for a community improvement purpose. In theory, the unrestricted nature of the funding allows the avoidance of silo-based approaches to complex social challenges and encourages creative collaborations. An example of where this approach was taken was the Health Action Zone strategy in the United Kingdom where providers were expected to partner and collaborate to provide comprehensive efficient services with the funds and any savings are kept within the Zone (Browne et al., 2004).
Incentive Option 4: Milestone Funding - In their consideration of stakeholder theory, Eweje and Palakshappa proposed that “as stakeholder groups gain and lose power, managerial activities will change focus” (2008, p. 17). The stakeholder power of a funder is probably at its highest when it is requiring action from the not-for-profit organisation to release funding. Consequently, milestone or instalment payments that require evidence of collaboration at each stage could potentially incentivise collaboration throughout projects rather than just at the beginning.
3.2 Non-financial incentives
3.2.1 Convening
Convening is seen by many foundations as a key part of their role as agents of social change. As this is a major opportunity for direct interaction with charities it may be a good opportunity to promote collaboration.
Incentive Option 5: Identification of Public Value Failure - Bryson et al believed that environmental factors can greatly affect the formation of collaborations and that perceived sector failure by traditional non-collaborative approaches on major social issues could be an effective spur to the establishment of alternative, more collaborative strategies (2006). If public, private and not-for-profit sectors have all been unsuccessful we have a “public value failure” (Bozeman, 2002, p. 145). Bozeman suggested that this failure could only be addressed in three ways: live with the problem, take symbolic action that does little to address the real issue, or collaborate (2002). Establishing general agreement on the failure of previous non-collaborative approaches to solve problems could incentivise the formation of new collaborations (Bryson, et al., 2006). The evidence of public value failure to successfully tackle key social issues would need to be academically rigorous and widely communicated. “Grassroots coalitions”, “professional coalitions” and “community coalitions” (Butterfoss, et al., 1993, p. 317) all have the power to utilise crisis situations to increase their power. As an example of this approach, Auckland Communities Foundation is currently engaged in a collaborative research project called MacroAuckland utilising existing published social research to stimulate new collaborative projects where previous efforts to instigate social change have failed in the city.
Incentive Option 6: Convening Dialogue - In their meta analysis of works on effective collaboration, Mattessich, Murray-Close et al identified the central importance of developing mutual respect, understanding and trust between collaborative partners (2001). They used the example of a study by Block et al in Chicago where the success of a domestic violence collaboration was accredited to “lengthy discussions at meetings” that helped members understand “the others’ perspectives, develop shared values, and reach consensus” (p. 15). The importance of this initial convening role on successful outcomes has also been prominent work by Fisher, Ury et al (2007) and Kahane (2008).
Incentive Option 7: Focus on Charitable Purpose - The clear articulation of purpose has been identified as one of the most important elements in the formation of effective collaborations (Butterfoss, et al., 1993). Copps believes that encouraging attention on charitable purpose can enable organisations to move beyond organisational self-interest and consider collaborations (or even mergers) that are more likely to achieve the purpose (Copps, 2009). Skilled convening and facilitation could be used to help to develop a powerful motivating purpose that would drive collaboration formation and success.
3.2.2 Analytical Review
Influencing the internal environment of an organisation or collaboration is a strategy that should only be pursued with care and consideration since it might be perceived as forced collaboration which is usually highly unsatisfactory. However, incentives that can create a positive internal attitude to collaboration are worthy of consideration.
Incentive Option 8: Diagnosis and Remodelling of Previous Success - Where there is a history of successful collaboration, this provides a strong basis for future collaborative activity against a background of trust, respect and understanding (Mattessich, et al., 2001). In contrast, where there is a history of competitive behaviours there will be an inhospitable environment for collaboration. Funders could encourage the parties from successful collaborations to thoroughly evaluate the basis for the success of their collaboration (Bryson, et al., 2006) and encourage them to work together again. An example of this approach can be seen in a multi-agency collaboration on children’s mental health in San Mateo in California in 1995 which built upon a history of highly effective collaboration between the lead collaborators.
Incentive Option 9: Asset Allocation Mapping - As self interest is a recognised motivator for organisations and individual in collaborations (Mizrahi & Rosenthal, 2001; Provan & Milward, 2001), collaboration could be incentivised, in theory, if it demonstrated that it provided the ability to achieve something that individual organisations would be unable to achieve alone. An asset-based development approach where collaborative organisations were selected on the basis of their potential contributions (J. M. Roberts, 2004) could be stimulated by an asset allocation mapping exercise where a large group of potential collaborators were brought together to identify their key strengths and potential contributions to a collaboration. The act of convening groups like this to work together on the mapping exercise is likely to encourage a more productive collaborative approach (Bendet, 2010).
3.2.3 Education
Incentive Option 10: Leadership Development - Highly effective leadership has been identified as important in the development and maintenance of effective collaborations (Dowling, 2004; Majumdar, 2006), but the concept of co-leadership is still relatively under-explored since it was first coined just over a decade ago (Heenan & Bennis, 1999; Jackson & Parry, 2008). As the development of appropriate skills for collaboration is seen as important to collaborative success (Butterfoss, et al., 1993; J. Roberts & O’Connor, 2008b), there is the potential to develop specific leadership development programmes that could concentrate on the development of co-leadership skills and mindsets. This leadership development could be conducted simultaneously with key members of the collaboration throughout an active collaboration using actual experience to reinforce the learning.
Incentive Option 11: Collaboration Promotion Organisation/Network - If negative attitudes acts as barriers to collaboration (Bryson, et al., 2006; Majumdar, 2006), it follows that collaboration is more likely to occur if positive attitudes to it are prevalent. One incentive opportunity in this area would be the creation of an organisation, ‘think tank’, academic centre or network that worked to further understand collaboration at a deeper level and promoted evidence-based examples of positive collaborative working. If a network were constructed that featured the characteristics Nooteboom identified in explorative inter-firm collaborative learning networks (i.e. limited size, high density, high connectedness, low concentration of ownership and control, high frequency of interaction, high openness, high reputation and high trust) (2004), it could model collaboration as well as lead its promotion.
3.2.4 Intermediaries
As can be seen in this literature review, there are a great many academic and professional experts who are interested in the area of collaboration, no doubt prompted by its potential promise in improving effectiveness and the intriguing, multi-layered complexity of its operation. This expertise could be harnessed to provide intermediary services that helped to guide organisations through the complicated issues associated with effective collaboration.
Incentive Option 12: Collaboration Brokerage - In his report on collaboration for the Tindall Foundation, Todd Foundation, Wayne Francis Charitable Trust and JR McKenzie Trust, Wilcox suggested that a service be developed to directly assist with frontline collaboration initiatives (2009). This service would discuss with grantees the options for enhanced effectiveness, reduced costs, improved governance and management through shared services or mergers. It was envisioned that initial advice could be given by appropriately experienced and demonstrably capable people. This approach is similar in principle to the full-time integrating role that was envisioned by Galbraith in building effective inter-unit collaborations (2006).
Incentive Option 13: Alliance Marketplace - Austin noted that the task of forming collaborations is further complicated by the nature of the “social purpose alliance marketplace” (Austin, 2000, p. 88) which is underdeveloped and inefficient. He noted that there is not a common widely used communication vehicle that enables organisations to find partners, and that the public information on not-for-profit organisations is less widely available than it is for businesses. If a fully functioning Alliance Marketplace could be developed then this could ease the matchmaking issues in collaboration formation. With New Zealand’s high internet usage and penetration, the national online registration of charities by the Charities Commission, the ‘manageable’ small size of the country and the emergence of e-marketplace concepts worldwide (Simchi-Levi, Kaminsky, & Simchi-Levi, 2003), it is conceivable that an online Alliance Marketplace could be established.
Incentive Option 14: Network Administration Organisation (NAO) - Provan and Millward identified the positive effect that a centralised Network Administration Organisation (NAO) with a role as disseminator of funds, administrator and coordinator of the network could achieve (2001). From an agency theory perspective the NAO is both “the agent of the community and the principal of the network” (p. 418). Whilst the authors noted that the existence of an NAO was not critical to collaborative success, they did find that when the collaboration partners had constructed an NAO it had made a significant contribution to stability and efficiency, and importantly performance of the whole network was easier to evaluate. Non-NAO networks by comparison required a higher level of commitment to keep them on track and were particularly vulnerable to failure as the networks became larger. Provan and Millward used the example of a large collaborative mental health project in Arizona where experienced agencies with good links and high integration failed to deliver efficient well-coordinated services and good client outcomes due to a lack of a legitimate NAO. To support the development of NAOs, funders could promote the concept to potential collaborators, provide professional advice on developing NAOs and reward collaborations that implement them.
Incentive Option 15: Prequalification Procedures - Another potential method to lift the quality of collaborations could be the use of an intermediary agency to accredit the capacity of agencies to collaborate as part of a pre-qualification process before they were considered for funding by major foundations and trusts. Since successful pre-qualification would be important for their self-interest (Mizrahi & Rosenthal, 2001; Provan & Milward, 2001), agencies would be motivated strongly to understand collaboration and develop collaboration capacity.
3.2.5 Administration and Process
Incentive Option 16: Collaborative Administration Infrastructure - Another option to incentivise collaboration would be to make key parts of the administration function more ‘collaboration-friendly’. For example, if funders could develop a common format for accessing funds this would be seen as desirable (Feasey, 2007; Wilcox, 2009). These common application forms would need to be designed in such a way that they facilitated application by collaborative groups rather than individual organisations. In Queensland, Australia, a streamlined accounting system for financial management and reporting has been rolled out to all not-for-profit organisations for use in their collaborative activities with government departments (J. Roberts & O’Connor, 2008b). Common IT platforms and the use of software that encourage and support collaboration could also be promoted (Bendet, 2010).
Incentive Option 17: Supporting Shared Services - If philosophically-aligned organisations with similar purposes already shared core administrational services (or were co-located (Hill & Lynn, 2003)) then it follows that they would be more likely to seek opportunities to collaborate. In his New Zealand study, Wilcox noted that community houses and physical centres that share resources provided a good basis for future collaboration (2009). Financial support for the sharing physical facilities – office space, equipment and sharing “back room” services – could therefore stimulate future collaboration.
3.2.6 Contracts and Accountability
Incentive Option 18: Proforma Contracts – Recognising the importance of formally recording plans, roles, policies and responsibilities in collaborations (Courtney, 2006; J. M. Roberts, 2004), the creation of collaborative agreement and charter templates (Bryson, et al., 2006) and joint agreements concerning “best practices” (Hill & Lynn, 2003) could assist make the establishment of strong collaborations easier to organise and their long-term success more likely. These formal agreements may need to be legally constituted to ensure that the needs of the less powerful collaborative members are honoured (Provan & Milward, 2001).
Incentive Option 19: Common Reporting and Evaluation Framework – The development of a common reporting and evaluation framework would make it easier to establish and monitor a set of performance measures that would keep collaborators mutually accountable (Austin, 2000; Austin, et al., 2000; Dowling, 2004; Majumdar, 2006; J. Roberts & O’Connor, 2008b). In addition to enabling collaborative leadership to managing for results (Page, 2004) and maintain focus on formal rules (Butterfoss, et al., 1993), this common framework would make it easier to identify and quantify the individual strengths of collaborative partners and more accurately assess partners in asset allocation mapping processes (see Incentive Option 9).