Who Pays for the Glue?

Funders like things they can point to. A classroom, a health clinic, a solar pump or a cooling centre can be photographed, counted and reported. The difficulty begins when the thing holding several interventions together is invisible.

Someone has to manage the coalition. Someone has to maintain the shared data. Someone has to translate between government, communities and investors. Someone has to notice gaps, resolve duplication and keep relationships alive when the original project ends. This work is often called overhead.

That may be one of the sector’s more expensive mistakes.

FSG’s research on backbone organisations found that cross-sector initiatives require dedicated capacity for strategy, aligned activities, measurement, public engagement, policy and resource mobilisation. It also found that individual organisations cannot simply absorb these functions on top of their existing work.

The reason is straightforward. Coordination often behaves like a public good. Many organisations benefit from it, while no single organisation captures all of the value. That creates a predictable funding problem.

Suppose ten organisations benefit from a shared data system. Each has an incentive to let someone else pay for it. Suppose a coalition needs a neutral secretariat. Every member wants the secretariat to exist, but each also wants to protect its own programme budget. The result is underinvestment in the thing everyone depends on.

Climate resilience contains this problem everywhere. Early-warning systems require coordination across forecasting, local government, emergency services and communities. Heat action requires health agencies, labour institutions, employers, utilities and municipalities. Adaptation finance requires governments, technical experts, project developers, communities and financiers.

The glue is not decoration. It is what allows the pieces to become a system.

Philanthropy appears unusually well suited to finance this kind of work because it can tolerate indirect value. A foundation can fund something whose eventual benefit appears in government performance, private investment or community capability rather than in the foundation’s own programme.

But this argument can become lazy very quickly. Almost any poorly specified capacity-building project can claim to be “connective tissue.” So the question is not whether glue deserves funding. The question is whether the glue is load-bearing.

What breaks if it disappears? Does information stop moving? Does the coalition lose its shared picture? Do actors revert to duplication? Does government stop using the evidence? Does project preparation collapse?

If nothing material changes, the function was probably not infrastructure.

This suggests a better way to think about philanthropic leverage. We usually ask how much additional money a grant mobilised. That is useful when money is the bottleneck. But a grant may create leverage in other ways. It might reduce the cost of coordination, establish a standard used by many institutions, allow government to adopt an intervention, or build local capability so the external intermediary becomes unnecessary.

Those are forms of leverage too.

Perhaps philanthropy’s comparative advantage is not merely that it can take more financial risk. It can finance forms of value that are difficult to attribute. That is exactly the kind of value markets and bureaucracies tend to underprovide.

And it may be where some of the most important work begins.

Sources

FSG, Understanding the Value of Backbone Organizations.
Kania & Kramer, Collective Impact.
Systems Orchestration, Coordinating Complex Change