NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

The field of philanthropy has grown in dynamism and innovation in recent years. Nowhere is this more apparent than in its efforts to address the root causes of challenges like growing inequality, extreme weather events and divisive politics. These challenges, driven by complex and multifaceted factors, have necessitated a different approach to philanthropic giving — one focused more on changing the underlying systems that perpetuate societal problems rather than simply on the problems themselves.

This emerging focus on systems change has made both high net-worth donors and “everyday givers” (generous individuals who donate less in absolute terms, but more in percentage terms) reconsider both what to fund and how to give. It has also catalyzed a more international outlook, since such problems and solutions do not respect national boundaries.

To better tackle these systemic challenges, Rockefeller Philanthropy Advisors (RPA) launched the Shifting Systems Initiative in 2016. Through this program, RPA — a philanthropic service organization founded by the same family who founded the Rockefeller Foundation over a century ago — aims to encourage funders to work more collaboratively and to provide longer-term, more adaptive and responsive resources to grantees, to enable them to scale their impact and create systemic change.

In the years since RPA launched the initiative, we’ve developed a clearer perspective on what needs to happen in practice to change complex systems. We also commissioned a program evaluation, which concluded earlier this year, with the goals of informing strategic discussions for the next phase of the initiative and sharing findings that could be useful to the broader philanthropic community working on systems change. Below, I will discuss some key learnings these efforts have generated.

How Funders Can Better Support Systems Change

Our work has highlighted several focus areas that need more philanthropic and other funding. To create systemic change, more resources need to be deployed toward:

• Creating paradigm shifts at the deepest level, what we label mental models and mindsets (i.e., values, attitudes and beliefs);
• Addressing root causes rather than symptoms, with a particular focus on changing the conditions that are holding problems in place;
• Changing the rules of an unfair system, not just helping people adjust to them;
• Supporting structural changes in areas such as public policy, private sector practices and resource flows;
• Shifting power dynamics through movement-building; and
• Funding field-building through networks and community-led institutions.

There are inspirational examples of how these elements have been leveraged to address issues that range from local to global — and these efforts illustrate how partners from both highly-industrialized countries and the poorest countries in the world can work together to solve a collective challenge. One example is the fight to get HIV/AIDS drugs to affected people and communities at low cost, a decades-long effort that required action on multiple fronts. Another is the global disability rights movement, whose slogan “Nothing about us without us” has inspired activists working to empower persons with disabilities to take control over decisions affecting their lives. And a third is the effort to drive funding into early childhood development (ECD) as one of the most effective and equitable ways to deploy philanthropic and public investment. A recent example of progress on the latter is the group of philanthropists in Asia who have spurred private and public giving, policy-making, and public awareness on ECD in the Philippines. They drew lessons from funders in Brazil and elsewhere, showing the value of sharing learnings about effective practices across the philanthropic sector.

In each of these examples, the successes and setbacks show that progress is not linear and the work is never done. They also show that funders need to adjust both where they deploy their resources, and how they deploy them. Supporting systems change requires funders to operate differently in several key ways. For instance, many have recognized the crucial role of lengthening the time frame of programmatic commitments and grants, and providing unrestricted or less restricted funding. The Shifting Systems Initiative uses a shorthand for this with the acronym SCALE, which refers to funders’ efforts to:

• Streamline processes: This may involve simpler applications, longer-term grants resulting in fewer renewal processes, and fewer reports — with more of this reporting focused on learning and less on short-term outputs, and measurement of success directed by grantees;
• Collaborate: This might consist of pooled funds (i.e., multiple funders giving to many grantee partners), common applications and reporting where grantees can use the same information for multiple funders, and greater acceptance among funders that they’re all contributing to collective success — which reduces the need for grantees to trace each funder’s specific funds to specific results;
• Accelerate impact through non-monetary support: for example, by providing introductions to other funders, or showcasing the work of their grantee partners through public prizes and website mentions;
• Learn: Funders themselves need to learn more about systems change, and about the root causes behind the problems they are trying to solve, while also learning to embrace complexity;
• Empower: Funders can shift the power dynamics with grantees through the steps above, and by taking risks, being patient, and experimenting with innovative methods like trust-based philanthropy and participatory grantmaking.

The successes listed above on HIV/AIDS, disability rights and ECD would not have been possible if major funders had not followed these five approaches in their work.

Learning from an Evaluation of the Shifting Systems Initiative

The evaluation of the Shifting Systems Initiative I mentioned above was commissioned in late 2022 and concluded in June 2023. In that period, an entirely independent evaluation team engaged with over 80 interviewees, and conducted several group discussions with individuals who had participated in our workshops in different regions across the world. The evaluation also included a detailed, annotated bibliography. The full report and related documents can be found here.

The evaluation focused on five questions:

• How — and to what extent — has the philanthropy sector taken up the concept of systems change?
• How — and to what extent — has the Shifting Systems Initiative’s work contributed to changes in discourse and practices in philanthropy?
• What were the key successes and challenges of the initiative, and what can we learn from them?
• What have we learned from the initiative about what works to influence philanthropic behavior?
• What are the opportunities for the operational and governance model of the Shifting Systems Initiative to be improved?

The findings have provided some specific guidance relevant to general philanthropic giving domestically and internationally, which includes a strong focus on emerging markets. They highlight areas where funders must reexamine how we work, given the scope and urgency of today’s challenges — and the opportunities to effect change. And they make it clear that a very different model of philanthropy is needed than the dominant models of the past.

Specifically, philanthropy needs to support deeper levels of change, in particular the mental models and mindsets that underpin both social norms and the direction of public policies at the national and local level. Yet philanthropy has often been reluctant to fund change in values, attitudes and beliefs, because change in these areas takes a long time and can be very difficult to measure.

Additionally, while many funders have embraced the idea of systems change, there is much more talk than action, and the sheer number of funders pursuing their individual approaches to this goal has made it difficult to achieve a broad consensus about what systems change actually involves. What is needed is for funders and grantee partners engaged in systems change to coalesce around strategies and behaviors that contribute to transformational change. This will require both sharper definitions internally and in public discourse, and more accountability within the sector itself for funders that claim they are pursuing a systems change agenda. A growing number of organizations are calling for this more boldly. Equally importantly, funders need to be more open about how they have reinforced unequal power dynamics and relationships that often lead to exclusion, if not oppression. This is particularly apparent when it comes to North-South giving, where grantee partners are rarely deferred to in designing philanthropic strategies and determining the use of funds. In other words, we as funders have to transform ourselves, not just change the external conditions in the philanthropic sector.

Similarly, the evaluation also highlighted the opportunity for those in wealthier countries to change how they give, and to partner with both communities in their own countries and those in emerging markets and poorer countries around the world. We need to cede more responsibility and power for identifying problems and solutions to local leadership and communities. A stronger orientation toward partnership and a solidarity model of giving — rather than the traditional “giver and receiver” dynamic — is necessary.

The evaluation also revealed a number of trends that have emerged in philanthropy in recent years. For instance, a dynamic conversation with philanthropic actors from Brazil illustrated how COVID-19 and changes in the political sphere have directly influenced the landscape of philanthropy, as the need to protect the health of democracy and navigate the pandemic has spurred increased collaboration rather than competition. Funders have also become more willing to embrace complexity and make longer-term commitments that allow grantees to pivot in response to changes in context and local conditions. Moreover, the emergence of blended finance approaches involving philanthropy, the private sector and government has led to increased collaboration, bringing the benefits of greater involvement and perspectives from a plurality of actors. And in a conversation with Kenyan interviewees, another positive trend was noted: more humility within partnerships — and a greater openness to listening and learning.

However, the evaluation also called attention to some significant challenges that have arisen in the last four years, not least of which are resistance to providing greater core support for operations among some funders, and a continued dire lack of support for grassroots organizations. These are common challenges across the world, and interviewees expressed an eagerness to redouble their efforts across national boundaries to promote systems change approaches in philanthropy.

The evaluation concluded with several recommendations for RPA and the wider field. First, there is a need to make systems change funding more about transformation — for example, not just reforming the unfair rules of a system, but changing who holds the power to make those rules in the first place. When applied to climate change, for instance, this might involve going beyond funding energy efficiency programs to instead focus on transforming the underlying production and consumption patterns that are driving global warming.

The moment calls for bolder action and a stronger challenge to the conditions and context that undermine progress. Yet currently, most philanthropic funding still comes in the form of project-based grants instead of grants that aim to solve the root causes of societal challenges. This leads to the second recommendation: Supporting systems change externally requires changing mental models, norms and power relations inside our own organizations — something that involves the inner and relational transformation of people and institutions, and a willingness to challenge power relations that reinforce the status quo.

Third, it’s necessary to rethink whose experiences and knowledge are valued and listened to. This is particularly relevant for international giving, as so often the views and efforts of local changemakers — activists, community members, civil society organizations and social entrepreneurs — receive too little attention. Philanthropic funders tend to place the highest value on input from their peers — but as the evaluation found, this has too often kept funders inside their comfort zone, from where it is much harder to create transformational change.

RPA and our partners have shared this evaluation widely through documents, webinars and in-person meetings in the U.S., Europe and Asia. We are now charting the course for the next phase of the initiative. For instance, we have published a guide for foundation board members and executive leadership who are interested in transforming their organization’s approach by embracing systems change. We are grateful for the huge insights we’ve generated over the past year, and we welcome others to join us on this path in the months and years to come by contacting us at info@rockpa.org and sharing our materials with new audiences.

Heather Grady is a Vice President at Rockefeller Philanthropy Advisors.

Photo credit: Salzburg Global Seminar