A message to funders
For many social entrepreneurs, the central question in placing a big bet on systems change is: Who is the payer? Legislative reform, shifting social norms, changing human behaviour and sustaining government adoption do not just happen on a shoestring, and they have no obvious self-sustaining business models. They need dedicated resources, people and convening support. They require different skill sets, such as legal expertise, and often involve different cost structures than what funders are used to.
They also involve some risk and a willingness to change tactics along the way, as some approaches start yielding results and open new opportunities while others fail to pan out. The emergent character of systems change contrasts sharply with the grant requirements of most donors, who typically prefer predictable outcomes and require entrepreneurs at the start of the grant period to elaborate what targets will be achieved at specific milestones along the way.
In other words, the funding of systems change requires entering a true partnership where the funder and “systems entrepreneur” are committed to learning together, making evidence-based decisions and evolving the strategy as necessary over a period of years. According to Frank Beadle de Palomo, President and Chief Executive Officer, mothers2mothers:
Our experience with most funders is that they want to be able to point to the impact of something they’ve funded directly. We have not found a lot of folks who are excited to talk about how their funding can be leveraged to achieve something beyond what you could do by yourself … If it weren’t for the leadership … and a handful of private donors, which were thinking about this like we were – that you need government adoption to sustain the level of resources required to continue treatment and prevention – then the transition of ownership to the government would not have happened.1
As this illustrates, funders can be the make-or-break factor. Donors have enormous power to vastly accelerate systems entrepreneurship as a collaborative approach to solving some of the most intractable social problems on the scale of entire populations. It starts by purposely funding collaboration across organizations, by being willing to take risks on uncertain outcomes that nevertheless could catalyse enduring change, and by acknowledging that shifting systems happens not overnight, but from staying the course over a period of years.
While the purpose is not to prescribe action, we encourage philanthropic funders to engage their grantees, investees or implementing partners in a conversation about what would be required to create change that affects populations. Be realistic about constraints, limitations and operating realities, yet at the same time be ambitious about system redesign.
Questions to start an inquiry include:
- How can we as funders interested in systems change look across our portfolios and accelerate collaboration among grantees or investees?
An important component of systems change is convening and collaborating across organizational and sectoral boundaries; funders can be a primary driver behind this type of approach.
- How can we act as “aggregators” of systems change approaches?
Funders have a unique viewpoint and positioning, which allows for “packaging” of approaches that can be used for systems change efforts.
- How could we alter our time horizons to be engaged in systems change?
Systems change horizons are far longer than the duration of typical grant cycles. In many cases, systems change requires decades of efforts – across sectors and organizations – before fundamental change materializes.
- Can we allocate more funding for organizations with the assets, credibility and capabilities to play an orchestrator or technical assistance role?
To encourage the diffusion of a proven innovation or intervention across other institutions and organizations (ranging from NGOs to government), dedicated resources are required to orchestrate a coalition of systems actors or provide sustained technical assistance over several months or even years.
- How can the funder community work together as peers to make funding more aligned with strategies for systems change?
Funders interested in systems change can act as “first movers” in the sector to begin the process of engaging in systems change work. However, the incentives and quest for “differentiation” now pervading the funding space need to change to provide the necessary runway for systems change efforts.
Based on conversations with the social entrepreneurs from the Schwab Foundation network, the case research revealed that practitioners learn best from other practitioners’ stories. The aim of the above lessons has been to present concrete and practical learnings about systems change through cases of real social entrepreneurs grappling with how to grow their impact beyond the reach of their own organizations. These lessons and the questions posed will hopefully offer some starting points for readers, their leadership teams, boards and funding partners.
The full profiles of the organizations featured are presented in this report. These stories are as diverse as the organizations themselves: six journeys, or six approaches to shifting systems. By learning about the challenges and opportunities they encountered, along with the strategic decisions made and the varying degrees of success, some of the options will appear more clearly. The exciting finding of this research is that a growing number of social entrepreneurs are working to harness social change and shape it so that systems ultimately work better for everyone. The stories that follow will hopefully inspire readers to consider the way their work may be poised to do the same.