For any group or organization to be effective, it needs to be able to make decisions about how to allocate its resources. Especially for organizations aiming to be self-managing, participatory, or ‘teal’, collaborative decision-making models for allocating funds are not very developed yet. Tools such as Cobudget can make collaborative budgeting and funding process easier, but there is much more to successful budget allocation than using a tool!
To understand how to do collaborative financial decisions well, it is useful to look at some of the practices that have been developed in self-organized communities and networks such as Enspiral, a network of entrepreneurs and freelancers helping more people ‘work on stuff that matters’.
One of such practices developed in Enspiral is called the ‘Collaborative Funding Round’, which is a time-bound participatory proposal process, also called a Cobudget Round (because this is the tool Enspiral uses to run them).
Why Collaborative Funding Rounds?
The development of the Collaborative Funding Rounds practice stems from two common challenges that groups tend to face when looking to do collaborative funding:
How can we enable more strategic thinking and conversations about how to spend our money?
What structure for our collaborative funding practice will provide themomentum and focused attention needed to make timely, good decisions?
Here are some of the advantages of using rounds instead of having a continuous funding process:
Focus and traction. One of the challenges with collaborative proposal processes, as with most communication in all types of groups, is getting people’s focused attention. Rounds help to focus people’s energy and attention into a certain time span, resulting in high activity.
Easy to design iterative experiments. By having a clear beginning and end to your round, you can design contained experiments to test certain ideas, and then re-configure or tweak the model for your next round. Especially if you run retrospectives in between rounds to reflect on how it went and how to better meet the needs of your group, the learning curve will be high and your process will get better with each round.
Comparability of proposals. When you run a round, proposals are all pitched within a defined time span, rather than spread out over long periods of time. This means that group members will be able to compare proposals with each other when funding them. People with similar ideas are also more likely to see redundancies and areas for collaboration if they are pitching at the same time.
Funds may be spent more strategically. Since rounds give the group more focus and show a large number of proposals at once, this makes it easier to facilitate strategy making processes and prioritize which proposals will help achieve the group’s goals.
Do it yourself: The five steps
If this practice sounds like something you would like to try with your organization, check out this simple guide to collaborative funding where we have documented how this practice works in 5 steps: