by Rebecca Laes-Kushner and Roy Córdova
All too often, NGOs work in bubbles, unaware of similar or complementary work happening nearby . Donors fall into similar silos, funding projects in isolation rather than collaborating with peers who fund similar services in other regions or additional projects serving the same population. Which is a shame.
Imagine a donor supporting preschool education to at-risk or low-income families, while another funds healthcare services in the community and a third supports literacy classes for adults. When brought together to increase services to the preschoolers and their parents, these efforts could create a powerful ecosystem of support—but instead they remain fragmented.
Pooled funding: a smarter way forward
Pooled funding offers a smart solution. Multiple donors contribute to a shared pot of money to support projects they all care about. These pools are often thematic (healthcare, agroecology, civil rights and WASH) or regional, ensuring resources are coordinated and complementary.
Governance matters. Pooled funds can be managed in different ways:
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- Board made up of donors or independent trustees
- Decision-making by consensus or majority vote.
- In some cases, non-donors, such as civil society organizations even hold seats at the table of some pooled funding schemes.
- Equal voices for all contributors, or weighted influence for larger donors.
| Advantages are clear: reduced administrative overhead, better coordination, faster decisions and more opportunities for synergies. This is especially critical in humanitarian contexts where speed saves lives. |
| Challenges exist too: aligning different donor philosophies and working styles, preventing dominance by big funders and ensuring mechanisms for conflict resolution. Training donors in collaborative decision-making and embedding transparency are essential. |
The largest issue fund is Blue Meridian Partners, which brings “philanthropists together to pool capital and scale solutions that target drivers of poverty from cradle to career.” Over 20 donors help fund Blue Meridian’s pool. Investments, as they’re called, can go up to $200 million over 10-12 years, distributed in phases of 2 to 5 years. Payments are based on meeting performance milestones. In addition, recipients receive counsel and support from Blue Meridian staff.
“…philanthropy’s prevailing model hinders leaders’ ability to think bigger and act boldly to pursue nationwide growth. The market prioritizes small-dollar grants over the large, unrestricted growth capital leaders need to meet the scale of the problems they address. Larger grants, especially of $1 million dollars or more, are rare and often come with restrictions, stifling innovation and expansion.”
–Blue Meridien Partners
Participatory Grant-making: Shifting Power
Traditional grant-funding program often burdens NGOs with rigid criteria and endless applications. Typically, a donor issues a request for responses (RFR) or terms of reference (ToR) that describes what the donor will fund (type of project/services, region, new vs. existing projects) and who the donor will fund (large or small NGOs, minority or women-led).
NGOs then apply to receive funding – even if aspects of the funding guidelines do not exactly match the project in mind. For example, an NGO seeking money for a successful project may need to repackage it or change aspects so it meets the criteria of being a “new” project that the donor wants to fund. In addition, applying for funding creates an administrative burden on NGOs, who must hire grantwriters on staff or as consultants. Small NGOs and CSOs struggle to compete and most CSO leaders and even many NGO leaders lack the skills for effective grantwriting. Most funding cycles are short, for only one or a couple of years, meaning the personnel requirement is large and continuous.
In response to these systemic issues, another new trend is participatory grant-making (#PGM) which flips the model. This approach moves power from the donor to the communities being served. Communities lead or co-lead the funding process, deciding grantmaking criteria and reviewing proposals to determine who receives funding. Donors, donor staff and sector experts also participate in some models. People with lived experience are important committee members since they have the best insight into what specific programs are needed.
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Benefits:
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Drawbacks:
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Key Takeaways
• Shared governance is essential. Whether pooled or participatory, funds must balance donor influence with local ownership.
• Efficiency vs. flexibility. Streamlined systems are valuable, but they must remain adaptable to context.
• Representation matters. Diverse voices—local NGOs, youth, experts, and communities—must be part of governance boards.
• Transparency builds trust. Clear allocation criteria and accountability mechanisms are non negotiable.
• Learning orientation. Systematizing evidence and experiences ensures funds evolve and remain relevant.
Donors have greater opportunities to engage in more meaningful ways and at scale – though both PGM and pooled funding options need to be constructed carefully. The system should add legitimacy, representation and efficiency without power imbalances or complex governance structures.
In short, pooled and participatory funding models are not just financial mechanisms—they are governance innovations. Done well, they redistribute power, strengthen ecosystems, and ensure resources reach those who need them most.