When Networks and Funders Meet

Reposted from the Connecting to Change the World blog with permission.

Lessons for Funders Investing in Networks

A funder’s money is a powerful force for controlling the people or organizations building a network. There’s a natural tendency for network builders to defer to the source of money. So the funder may have the power to dictate the design—purpose, membership, governance, and other elements—of the network. And the reasons to exercise this power may be reinforced by the funder’s desire to claim credit for whatever the network achieves. But sooner or later, control and credit have to become more distributed among the network’s members. As the authors of “Cracking the Network Code: Four Principles for Grantmakers” noted: “Funders succeed with networks by providing sufficient resources to support the network without overpowering it.” From our work with networks and funders, here are a few do’s and don’ts for funders, in particular when starting up a network:

1. Don’t dictate the network’s purpose; co-create it with potential and existing partners. If a funder directs a network’s purpose and activities, network members may comply to get the funder’s money, but they wont feel committed. As a result, the network may not perform well and it’s not likely to be generative. Better to develop things in consultation with network members so it meets their needs too.
2. Be open to surprises; don’t try to pin everything down.  Early in a network’s life, it’s unwise to put its development on a production schedule and to commit the network to specific outcomes and timelines. Funders have to be patient enough with the network to invest in its front-end collaborative capacity and allow it to forge its own direction.
3. Let network membership expand naturally through members’ connections, not through funder dictates. When a funder determines a network’s membership, several things can go wrong. It may assemble members who are not personally committed to the network or are not ready to collaborate effectively. Their primary relationship will be with the funder that selected them. The funder may manage the addition of members to suit its needs, rather than allowing expansion to occur naturally based on the members’ desires to add connections that create value.
4. Intentionally dilute the funder’s power over time. Instead of maintaining control over a network, a funder should help develop a network governance structure in which it is just one of many decision-makers, but still can provide leadership.
5. Don’t override network members’ concerns or interests. It’s natural for network members to defer to a funder, especially when the funder is being insistent on something. Instead of pre-empting challenges to their thinking, funders should participate in the network’s decision-making process and learn what others are thinking, without forcing others to acquiesce to their wishes.
6. Patience is essential and will be rewarded. Building a high-performing network is a marathon, not a sprint. It takes time to get started well, to build capacity, and then produce impact. Funders have to be willing to support the underlying capacity and operations of a network before expecting results.

There’s more advice and more detail in Connecting to Change the World, the “Bonus Track” section.