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How can funders achieve systems change?

Many funders are adopting a systems change perspective to solve the world's most pressing social and environmental problems. But what does it mean and what does it require funders to do differently?

In recent years, there have been a growing number of funders, and in particular philanthropic foundations, that have shifted away from simply addressing the symptoms of social and economic inequalities and environmental degradation, and have committed to addressing the root causes.

They do this by taking a systems change approach. At its heart, systems change is about locking in change, and altering the underlying structures and support mechanisms which make the system operate in a particular way.[1]

It can include changes in policies, routines, relationships, norms, resources, power structures, and values. Importantly, systems change can happen at any level: global, regional, national, or local. ‘System’ often conjures up the image of something big and global, but this is not the case. A ‘system’ refers to the wider structures that support and perpetuate a problem, at any level.

How can you effectively achieve systems change?

In 2020, Itad partnered with Porticus, the philanthropic organisation of the Brenninkmeijer family business owners, to conduct an independent review of its 12 grant-making portfolios (these cover everything from criminal justice reform, to promoting more sustainable business). A big part of the review was assessing the progress Porticus was making in contributing to systems change across its different focus areas.

Read our Report: Porticus Portfolio Review – Summary of the final synthesis report

From our experience with Porticus and others, we have put together five key considerations for organisations funding systems change:

1. Understand the system/or part of the system you want to influence

To influence a system, you need to understand it in all its glorious complexity. What’s the nature of the problem and its causes? Who are the key actors involved and how do they relate to each other? What are the laws, policies, and regulations frame the problem?

Mapping this detail is called a systems map. It provides a detailed picture of the actors and factors that perpetuate and sustain a social problem.

Understanding this is important because it provides the basis for deciding your entry point into the system. With this clear, a funder can begin to design its own strategy and map out the contribution it wants to make to affect change (sometimes called it theory of change). Porticus, for example, commissioned a study to map the actors involved in and causes of interreligious tensions across the Middle East and Europe and used this to inform its strategy and theory of change for supporting interreligious dialogue.

2. Work collaboratively with a diverse range of partners that can interact with the different parts of the system

Systems change is hard. Social, economic, and environmental problems are often entrenched, vested interests in the status quo can be strong, and actions are needed at multiple levels.

This requires the mobilisation of a wide range of capacities, relationships, and networks. Recognising this, funders need to cultivate diversity in their grant portfolios and build strong relationships with others. For example, one foundation we recently worked with, has built a portfolio of investments that brings together think tanks, community-based organisations, national and international NGOs, and faith-based organisations, working at local, national, and global levels, to shift policies, laws, and norms and practices, that prevent women and girls accessing modern contraceptives.

This is in recognition of the need to mobilise a wide range of capabilities and tactics and work at different geographical scales to remove the barriers to modern contraceptives and secure women’s reproductive rights

3. Extend your planning horizons; invest for the long term and build capacity

Systems change takes time and requires funders to invest resources over the long term. A strategy based on achieving systemic change in three years is not realistic.

Partners need to be provided with long-term funding and be given the flexibility to adapt to evolving needs. Investing in strengthening organisational capacity is an important part of this and is often best achieved through providing grantees unrestricted core support.

It’s not possible to predict when a system will shift in a new direction, but when it does, the ability to act quickly and push for change is key. This requires having strong, effective organisations waiting on the sidelines, and ready to act. Funders play a central role in supporting this.

For example, a few years ago we partnered with a UK government-funded initiative to strengthen the use of evidence in policymaking across LMICs and followed its work over three years conducting periodic evaluations.

One of the main findings from this work was that having strong advocates of evidence use at the national level, that have strong relationships with government stakeholders and can move fast when opportunities open to push the evidence agenda, is key to how the use of evidence in government policy making becomes institutionalised.

4. Use more than just your money; mobilise the full range of capacities that you have available

Systems change requires a funder to use more than just its money. Funders have a unique position in that they sit above individual organisations. They can see the bigger picture of all the actors involved in the system.

They need to capitalise on this and play a role in coordinating across a system, building networks between different actors, and investing in evidence generation to help all players involved in the system learn (see below).

For example, in Porticus’s purposeful business portfolio, alongside grant making, Porticus staff are actively involved in bringing together standard setters for sustainability reporting, promoting joint working, and supporting research that plugs important gaps in understanding on how to incentivise the private sector to integrate social and environmental concerns into their core business.

Shifting a system also requires influencing policies and laws. While funders support organisations to do policy advocacy, they too have an important voice that should be leveraged. CIFF is a good illustration of this, it is both a major funder of advocacy on climate change, but also an advocate in its own right. Its founder and Chair, Chris Hohn, is frequently in the news, advocating for businesses to do more on cut their carbon emissions and lobbying central banks to address the financial risks posed by climate change.

5. Invest in evidence and learning, because your strategy will evolve

Funders must be careful not to think that simply having a well-developed, evidence-based strategy is enough to achieve systems change. Social and environmental problems are complex. Therefore, funders from the start, need to plan for testing and adapting their strategies as they go along. This requires investing in systematic evidence generation and learning.

This adds the most value when the learning, reflection, and adaption are done in collaboration with grantees, and the lessons are shared across the system so others can learn as well. This is a role Itad are often brought into play in, in the form of monitoring, evaluation, and learning partnerships. In this role we support funders and partners to identify their evidence and learning needs, support evidence generation, and facilitate collaborative learning and adaptation.

For example, we worked alongside the International Decision Making Support Initiative for four years, helping the network understand the impact of its efforts to institutionalise the use of evidence in the allocation of health resources and learn how to adapt its approach across different country contexts.

To find out more on our work on systems change, check out the following resources:

  • A think piece on evaluating transformational change, drawing on our experience of several climate change evaluations
  • A discussion paper on systemic change in the context of market systems
  • A blog on how effective management of a funder’s portfolio can support systems change

[1] Foster-Fishman, P. (2002) How to create systems change. Lansing