Systems Change: The Funders’ Perspective
In recent years, a growing number of funders in Europe and North America have begun to invest in systems change. This briefing paper — derived primarily from “Systems Change Isn’t One Thing. Financing Should Reflect That”, and “Investing in Systems Change Capacity” published by Stanford Social Innovation Review, and “Embracing Complexity: Toward a shared understanding of systems change,” published by the Ashoka Foundation — outlines the priorities of these “systemic funders”, the qualities they are seeking in system change leaders, and the challenges of monitoring and evaluating systems change.
Systems Change
Systems change aims to alter, shift and transform behavioural structures, customs, mindsets, power dynamics, and rules, with the intent of solving societal problems – with lasting effects on a local, national, and global level.
Systems change itself is a neutral concept, as a system can change in many different directions, and a gain for some can be a loss for others.
Systems change is too much for one single person or one organization to achieve.
Homelessness, climate change, inequality, crime: many of today’s societal issues are so complex and on such a scale that they cannot be resolved by any one perspective, organization, sector or even government.
A key aspect of systems change is collaboration: true systems change occurs when multiple players across sectors, disciplines, and social groups work together towards a common goal. Building network capacity across many groups—beyond programmatic investments in specific grantees—helped to achieve the type of systems change desired.
While systems change thinking certainly encompasses direct action, policy changes and tangible interventions, it’s about seeing these activities within the wider context and working collaboratively on a multi-pronged approach.
Systems change is best understood as comprising three distinct types of change: experimentation, redesign, and optimization. Clarifying these interconnected modes of change helps distinguish understand the different processes at work: “experimentation” means a change in goals and values, and defining what is possible, “redesign” means a change in rules and processes to create an enabling environment, and “optimization” means spreading the implementation of that change as broadly as possible.
At the beginning of a potential transformation, a fundamentally new and disruptive activity or practice arises that will require broad economic, social, political, and/or cultural changes for its wide application. Whether or not those leading the activity may or may not have a transformational intent, the innovation is transformational if it requires an “opening up” of the traditional system’s assumptions, values, and fundamental goals.
After potentially viable prototypes are identified, a transformational innovation requires changes in the enabling environment that could support its widespread adoption. This is the “field development” stage of building new policy frameworks, as well as both organizational and physical structures to support the implementation of the transformational innovation. When the new enabling environment is destabilizing, habits, preferences, structures, and popular practices must also be changed.
Systemic Funders
Systemic funders are clear about the systems they aim to change. Systemic funders have a clear vision of their targeted “end state” and make an effort to understand the systems that need to be changed to achieve it. In doing so, they are aware that their own perceptions affect how they define the boundaries of their systems of interest and proactively work with different constituents to broaden their understanding of the system as a whole. Moreover, they acknowledge that they, too, are part of the system, and that their own organization might directly or indirectly contribute to the systemic patterns they aim to change.
Systemic funders provide monetary support that can be used to flexibly cover different operating expenditures, such as travel, advocacy efforts, networking and events, monitoring and evaluation, and initiatives to create trust by supporting other systems change leaders.
Systemic funders acknowledge that the path of an initiative will change along the way. Many funders expect to decide on funding for a project based on it having a path that is predefined from beginning to end. They are thus tying success (and continued funding) to an organization’s adherence to this path – even if it might become clear over time that it is not the best use of resources. This logic does not work for systems change efforts, as the inherent complexity of a systems change effort often leads to pivots that could not be anticipated at the start of an initiative, perhaps because the systems change leaders’ understanding of the underlying causes of the problem deepened as they worked on it.
Systemic funders are realistic about the time it takes to achieve systems change. Results that are directly visible can be very gratifying for funders but are rarely in line with a systems change approach – systems change can take years to achieve and individual actions usually only have an indirect impact. They aim to distribute grants of $500,000 over five years.
Systemic funders are aware that funding is about more than giving money. In many cases, funders can provide valuable nonmonetary support, including knowledge sharing, access to networks, amplifying the systems change leaders’ messages, or delivering specific expertise (e.g. legal issues, policy processes, strategic advice). Systems change leaders perceive fundraising support as the most important nonmonetary support, followed by different types of consulting support (e.g. strategy, communication, organizational design). Systems change leaders also need support in communicating, networking, and gathering data to understand “what’s happening elsewhere of a similar nature.”
Systems change work heavily depends on the knowledge and experiences of people within the system of interest. Systemic funders proactively engage with communities and individuals who know the specific system very well to identify leaders of nascent systems change efforts.
Systemic funders support systems change leaders with transformative visions, not projects. Systems change begins with individuals who have a deep understanding of a problem and a vision for changing it. Frequently, they have a personal involvement with the system they are working in and direct exposure through on-the-ground relationships. They have an entrepreneurial mindset and cognitive empathy, which allows them to create real and lasting change. At the same time, these visions often do not neatly translate into clear projects with defined activities and measurable outputs. Rather, the ideas for how the vision might be reached evolve, as the systems change leader learns and possibly changes course along the way.
Systems Change Leadership
Systemic funders actively look for systems change leaders to support. They do not merely wait for applications and proposals to reach them, but actively search for systems change leaders with promising visions and goals.
Systemic funders see systems change leaders as catalysts working through collaboration and distributed leadership to drive change.
Systems change leaders combine a deep understanding of the systemic issues they want to address; an ability to engage and align diverse stakeholders around shared goals; and an emphasis on empowering action and collaboration by a broad network of organizations.
Systems change leaders need the ability to develop a broad future vision, build trust with others, and lead by example. They usually define their work not in terms of individual projects, but in terms of multiple, long-term efforts, which puts their work at odds with funding that emphasizes short-term success. Moreover, short funding cycles drive systems change leaders to spend a significant amount of time on applications for future funding, rather than working on their systemic initiative. Systems change usually involves collaboration with a broad range of partners, which can take a long time to establish. Systemic funders thus accommodate these extended timelines, especially when the intended systems change requires the action of third parties such as government entities.
Systems Capacity, Networking and Monitoring
Systems capacity is an outcome in itself. Many funders have found, through experience, that the capacities that organizations and movements have, as well as the conditions in which they operate, are as important as the outcomes they produce. Success is, therefore, building a strong system, rather than any programmatic outcome that those in the system are striving toward. A strong system accelerates progress in opportune moments, deepens implementation of wins, and better protects gains when they are under threat.
Systemic funders help systemic organizations find, engage, and connect with each other, such as, by inviting them to conferences and workshops. They encourage systems change leaders to explore where they can contribute most to systems change goals and where others may be in a better position to do so while being mindful of differences in organizational culture, speed, and staff capacity.
Systemic funders invest in learning and capability building. They are aware that even if the vision for systems change is clear, the path to achieving it may not always be. Most systems adapt to disruptions, and as a system evolves, so must the approach for changing it. Thus, systemic funders provide resources for systems change leaders to evaluate whether their approaches are working, reflect on their experiences, and learn from them – even if this might reveal “failures” that result in course corrections or pivots.
Systemic funders are encouraged to provide resources to support the establishment of an evidence base where none exists. Often the initial indicators do not capture the full picture and a unique set of evaluation criteria that includes numeric key indicators but also qualitative indicators has to be developed, usually with the help of an advisory firm that specializes in evaluating systemic change.
Systemic funders urge systems change leaders to be ambitious but also realistic. By its very definition, systems change is an ambitious approach to the pressing challenges of our time. Although the challenges are big, systemic change is often driven by leaders in local communities, meaning that neither the systems change leaders nor systemic funders need huge budgets to make a difference. While the narrative that big changes can only be made by big organizations may be discouraging, smaller funders can indeed contribute just as much to systems change efforts if they identify the right level of ambition.
The ‘CLEAR’ framework for Systems Change:
1. Convene and commit. Key stakeholders engage in moderated dialogue to address a complex issue of mutual concern. They define shared interests and goals, and commit to working together in new ways to create systemic change. For example, the We Mean Business Coalition engaged nearly 1,000 leading companies to advocate for ambitious, science-based climate policy, and has made over 1,500 action commitments.
2. Look and learn. Through system mapping, stakeholders jointly build a shared understanding of the components, actors, dynamics, and influences that create the system and its current outcomes, generating new insights and ideas. For example, The Global Alliance for Improved Nutrition targets specific gaps in the nutrition system, working to catalyze and scale market-based solutions, and targeting vulnerable populations who are most in need.
3. Engage and energize. Strong stakeholder engagement is built through continuous communication to build trust, commitment, innovation and collaboration. Inspiration, incentives and milestones help drive progress and maintain momentum. For example, the New Vision for Agriculture initiative engaged over 650 organizations and 1,500 individual leaders around the world, catalyzing action in 21 countries including over 90 value-chain projects.
4. Act with accountability. Shared goals and principles set the direction of the initiative, while measurement frameworks help track progress. Coordination and governance structures can be developed as initiatives mature. For example, the Every Woman Every Child movement mobilized hundreds of action commitments towards its global strategy, monitoring progress through a unified accountability framework, with oversight from a high-level steering group and coordination by a global secretariat.
5. Review and revise. Stakeholders review progress regularly and adapt their strategy accordingly. Adopting an agile, flexible, innovative and learning-centred approach allows for evolution and experimentation. For example, the 2030 Water Resources Group evolved its organizational structure through several stages, commissioning external evaluations to both review its progress and recommend opportunities to increase its impact.
Further reading:
- Embracing Complexity: Toward a shared understanding of systems change by the Ashoka Foundation
- Investing in Systems Change Capacity by Stanford Social Innovation Review
- Systems Change Isn’t One Thing. Financing Should Reflect That by Stanford Social Innovation Review
- Courage to Transform: Funding Systems Change for Lasting Impact by Rockefeller Philanthropy Advisors
- Systems Change: Pursuing Transformational Philanthropy by National Center for Family Philanthropy
- What We Mean When We Say We Fund Systems Change by Northwest Area Foundation
- Systems Change Grant by the Inatai Foundation
- Seven Steps to Funding Systems Change by the Ashoka Foundation
- The Systems Change Lab
- Blue Marble Evaluation: Premises and Principles by Michael Quinn Patton