6.1 Effective Timing of Incentivisation
Considering the frequently protracted nature of collaboration initiation, development, operation and review, it is useful to consider the most appropriate times that incentives can make an impact “across the whole funding process: gathering information and identifying and understanding community needs and assets; the proposal and funding stage; and monitoring and evaluation” (Nowland-Foreman, 2008, p. 2).
When the rankings for each incentive is plotted in relation to the part of the collaboration process where they occur (Diagram 2 – Timing of Incentives) then an interesting pattern emerges (foundations are moneybags, charities are hearts).
Diagram 2 – Timing of Incentives
As can be seen in the diagram, the financial incentives that are highly ranked by foundations relate to a stage which is quite a long way through the collaborative process. However, in general there seems to be more support from both foundations and charities for incentives that take place in the needs assessment or getting ready stages of the collaboration formation. The most obvious of these are the convening incentives Convening Dialogue, Identification of Public Value Failure and Focus on Charitable Purpose. Also ranking highly in these early stages of the process are Leadership Development and Collaboration Promotion Organisation (both Education incentives), Asset Allocation Mapping and Supporting Shared Services.
It is also worth noting that the evaluation stage incentive Diagnosis and Remodelling of Previous Success also ranks highly suggesting that the investment of time and energy by foundation in helping charities to start and end collaborations well might be most effective.
The low ranking of the majority of the Intermediary options (in the Negotiation Phase) may well be due to the inappropriateness of transplanting ideas from much larger countries like the USA into a small country environment where everyone knows each other. There was also an instinctive suspicion of middlemen by charities in particular and a fear that they would dilute the money actually getting to the cause.
6.2 Financial versus Non-Financial Incentives
The results suggest that foundations and charities have fundamentally differing views on the relative merits of financial and non-financial incentives. However, whilst it is accurate to say they were more supportive of financial incentives than charities, it would be wrong, however, to say that foundations were universally supportive of using financial incentives in isolation, as they made many negative comments about their unintended consequences (“financial incentives need to be used carefully. They can be a gateway to long term change or be ‘window dressing’” – Private Foundation. “High money can start to distort behaviours” – Private Foundation).
Roberts and O’Connor recommended that funders needed to avoid “forced collaboration” and not “impose their own agendas” (2008a, p. 228), and it appeared that many charities see financial incentives as falling into this area - being done to them rather than with them ("I can see the merit of resource based incentives but not on their own or accompanied by a “you must do this attitude” – Local Health Charity."I can see incentives working well as part of a larger strategic goal not as a gun to the head. We need to be sold rather than told” – Local Health Charity. “A short term fix”. “A vote of no confidence”- Regional Migrant Charity.) Charities were far more supportive of non-financial incentives in general, particularly those that helped build trusted relationships and set direction and consensus (“In the long term non-financial incentives are more likely to be effective" – National Youth Charity. “I prefer inspiration rather than the stick” – Regional Migrant Charity. “Non-financial is more likely to bring the right result” – Regional Health Charity. "Not enough attention on relationships and, therefore, potentially sub-optimal results in the long term” – Local Community Charity. “Let’s educate, talk and empower first. I certainly would not go with just financial as I think it is frighteningly missing the point. To be viable in the long term needs both with non-financial helping to define the terrain” – National Health Charity.
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” – Private Foundation. "Focussing on the environment and purpose will bring more long term success - you need to ‘get it in the water’, normalise it”. “It is the soft stuff that is most important - relationships are the real key. We need to focus on the incentives that are around relationships because we should be working together because we want to not because we have to” – Private Foundation.
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 a balanced incentive portfolio of incentives including both financial and non-financial options. “A mix of both is what we are finding works but the motivation has to come from the not-for-profits” – 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” – Gaming Trust. “The ultimate is probably to use both at the same time. Priority funding and the collaborative brokerage with strong evaluation - possibly even link it with milestone funding" – National Health Charity. “In the short term, financial incentives can get things started. In the medium term, the focus on purpose and funders collaborating is essential” – National Youth Charity.
6.3 A Proposed Balanced Incentive Portfolio
“We need to ask why are we doing it first and then look at the tools at our disposal” – Local Health Charity.
“I think you need a portfolio and a model behind it. By doing so would increase the potential of each option” – Regional Social Services Charity.
By synthesising the literature review and the field results, a strong and balanced portfolio for encouraging effective collaboration can be assembled with reasonable confidence that it will be well received by progressive New Zealand charities.
First, Convene for vision and trust
The meta analysis by Mattessich, Murray-Close et al identified the central importance of developing mutual respect, understanding and trust between collaborative partners (2001) and this appears to be the essential prerequisite for effective collaboration as far as our charities are concerned. This focus on relationships can help to overcome the power imbalance challenges so prominent in the literature review (Gray 1989; Mintzberg, Jorgensen et al. 1996; Drumwright, Cunningham et al. 2004).
The next building block on the foundation stone of those trusted relationships is a clear and audacious vision and purpose.
Therefore, effective Convening at the start of the journey is the most important incentive in the portfolio of incentives that I recommend. Foundations are uniquely placed to be able to bring together charities to build communities of practice and shape solutions to complex problems. They have to be well-informed on the issues and fully present in the dialogue. The key skills for the foundations here are an evidence-based mindset, skilful facilitation, and the ability to have the right people in the room. These need to be purposeful conversations rather than talk fests and the path to progress needs to be clear. Whether the focus is on charitable purpose, identifying where previous non-collaborative efforts have failed or simply convening dialogue, this is an essential first step.
Second, prepare organisations and their leaders
Where possible, foundations should assist the collaboration process by helping charities to unravel their sectors through Asset Allocation Mapping processes, but they need to be realistic and recognise that this will not work in all fields, particularly highly complex, fast-moving ones.
Supporting Shared Services is a sensible, technical and tactical incentive that really works is should be strongly supported by all proactive foundations.
Foundation support for Leadership Development (co-leadership and shared leadership) will bring long-term collaboration benefit to the sector and is a sensible but necessarily patient investment in human capital.
Third, carefully use funding to instigate action
Financial incentives have their place but are best following the development of a clear vision and plan by a dedicated group of collaborative partners. Therefore, Priority Funding by foundations working together (Joint Funding) should be focussed in large, long-duration commitments to well-structured, well-discussed and well-led collaborations, rather than through the best open applications.
Finally, evaluate and diagnosing success (and repeating the process)
Full evaluation needs to be conducted periodically through the collaborative project and in detail at its completion. Collaborations that work will tell us a great deal about what works and collaborative partners that get results should be proactively supported to recreate their success on new challenges.
6.4 Should Foundations attempt to incentivise collaboration?
Collaboration is certainly not a panacea.
The literature is by no means unanimous in its positive assessment of collaborative endeavour. It is clearly not right in every situation and ill-conceived collaboration can do more damage than good (“it is ridiculous to apply collaboration incentives to all applications - some circumstances do not suit collaboration” – Statutory Trust. “Ill-conceived collaborations have real potential to do harm and our key start point should be ‘do no harm” – Private Foundation).
However, when foundations and charities were asked “should foundations attempt to incentivise collaboration?” the answer was an overwhelming “yes” (even from charities that had been critical of the incentives that had been proposed).
Foundations pointed to the ability to focus energy (“evidence has shown that charities do not self organise” – Gaming Trust), the shared education ("there are real learning benefits from collaboration - picking up each other's best practice” – Gaming Trust) and the improved impact (“absolutely a good idea - all aids purpose and societal good” – Private Foundation). They were clear that at its best collaboration brought “effectiveness not efficiency” (Peak Body) and recognised that it could only be encouraged never imposed. As one Private Foundation stated: “We need to keep talking about collaboration. It provides leverage for everyone. You get stronger through collaborations”.
Charities appreciated that the measured incentivisation of collaborations was a worthy endeavour for foundations due to the way it integrated individual strengths (“it enables the charities to focus on what they are really good at rather than following the funding” – National Youth Charity) and brought new important perspectives into solving the issue (“I can guarantee that a bunch of social workers is not going to solve our most intractable social issues. We need new perspectives, need another idea in the room” – Regional Social Services Charity).
6.5 Hypothesis Revisited
The aim of the this research was to identify and test a range of incentives that might be successful in encouraging effective collaboration with New Zealand charities and test the hypothesis that “in the long term, non-financial incentives have the potential to be more effective than financial incentives in encouraging collaboration between New Zealand charities”.
Thanks to a large number of high quality academic studies on collaboration and the generosity of spirit and time by many leaders in the New Zealand philanthropy and charity arenas, these issues have been explored thoroughly. A balanced portfolio of incentives has been proposed. Whilst it features financial incentives they are of secondary importance. In terms of long term potential to encourage collaboration between New Zealand charities, skilful and thoughtful application of non-financial incentives is critical.
6.6 Generalisation
This research has for the first time drawn together a portfolio of incentives that could be assessed for their suitability to encourage effective collaboration. Whilst the results have been drawn from the charitable sector in New Zealand it is conceivable that this work could be useful in other contexts. One of the most obvious lines of further application of this work would be in relation to local and national Government funding to charitable organisations where many factors would be similar. The work could also be relevant in other organisations, industries/fields, alliances and sectors. Some of the findings may also be similar in other countries, although it is likely that they would have to be small countries with similar open cultures and economic and social systems.
6.7 Further Research
During the course of the research further avenues of study were suggested by respondents or signalled by the data collected.
The main areas for further research include:
- An extensive quantitative study with charities to determine the potential effectiveness of the highest potential incentives identified.
- A cost-benefit analysis for the use of specific incentives (Private Foundation).
- A series of case studies analysing the impact of the use of these collaboration incentives in New Zealand charities (National Health Charity).
- The creation of a simple guide for foundations and charities on “10 ways to make it easier to collaborate” (Private Foundation).