Investing in Systems Change Capacity – Stanford Social Innovation Review

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Philanthropists must think beyond funding outcomes and invest in the capacity of systems to perpetuate and sustain change.
By Susan Misra & Marissa Guerrero Jan. 24, 2024
In recent years, many in the philanthropic field have realized that even concrete, system-level outcomes are insufficient to produce systems change. True systems change requires solutions to be embedded deeply enough that they can self-perpetuate. After all, a policy win might be progress, but to truly change a system requires embedding into the system itself the capacity to enforce and implement this policy. Achieving population-level impacts like reductions in maternal mortality rates or racial disparities will not be enough without a shift in, for example, the delivery structures that can make those achievements sustainable. A market innovation like creating a sustainable seafood market is unlikely to create enduring systems change without building strong relationships with civil society.

The problem for philanthropists, in short, is that while targeted, programmatic investments can secure system-level outcomes, something more and distinct is required to sustain these outcomes. To change systems, therefore, funders need to invest in systems capacity.
Drawing from evaluation data, anecdotes, and conversations with a diverse group of philanthropies focused on a broad spectrum of issues, places, and systems, we’ve found that funders have strong similarities in their approaches to systems change, including:
1. 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.
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One example of how investments in capacity can be critical to systems change comes from The California Endowment’s “Building Healthy Communities” initiative (BHC). California’s Local Control Funding Formula legislation gave each school district the opportunity to develop their own implementation plan. Through BHC, The California Endowment (TCE) supported locally driven efforts in 14 of California’s 52 counties to implement this legislation, allowing them to observe firsthand how building power in communities determines the degree of success of systems change. While communities in Merced and Long Beach both used “uniform complaint procedures” to hold their districts accountable for violations of laws or regulation, their capacities were different. Merced had “years of support and organizing,” as BHC evaluator Gigi Barsoum noted, “and there was ample data, legal precedent, and separate BHC tables for planning.” Long Beach did not have this ecosystem of capacity and used a top-down legal strategy, with parents as complainants. “Litigation was just about litigation and not an organizing and accountability tool.”
In both communities, the UCPs were settled successfully, requiring more transparency and parent engagement in decisions about school funding, as well as more resources overall for high-need students. Only in Merced, however, did the community have the power to continue to hold the district accountable, advocating for further and transformative change: “The wins were significant,” as subsequent reporting indicated, “but the ability of the ecosystem to translate wins and losses towards further progress required specific electoral, governing, and adaptive capacities.”
The Garfield Foundation offers a different example of how networks with capacity achieve systems change that evades individual groups. After spending years investing in programmatic work to address energy issues—but not seeing the progress they had hoped for—the Foundation founded the RE-AMP network to build systems capacities, such as systems thinking and planning, working groups to coordinate efforts, technologies to share information, media support, and expanded resources. In a case study of RE-AMP, Heather McLeod Grant finds that:
Building network capacity across many groups—beyond programmatic investments in specific grantees—helped to achieve the type of systems change desired.
Finally, robust infrastructure is necessary to defend wins. NEO Philanthropy’s Four Freedoms Fund (FFF) has seen cycles of progress and regression over the last twenty years of immigrant rights investments and learned that “any policy change can be reversed based on who is in office.” As Rini Chakraborty, FFF’s Senior Director, puts it:
When California’s 1994 Proposition 187 barred undocumented immigrants from accessing state services like health care and education, Four Freedoms Fund invested deeply in the capacity of advocacy organizations and local collaboratives that have effectively shifted the narrative to Healthcare for All, helping to restore programs and access for immigrants.
2. Combine responsiveness with a strategic approach. In philanthropy, “responsive” and “strategic” approaches are often understood to be at odds, even mutually exclusive. Systems grantmakers have struggled between narrowly investing to target specific levers of change and stretching resources across multiple priorities to holistically respond to complex issues and grantee feedback. The funders we learned from, however, have realized that successful approaches to achieving systems change embrace both, at once. They not only listen deeply to those most impacted, dynamically evolve their approaches based on what they learn, and involve grantees in decision-making about strategy and learning, they also, at the same time, think strategically about targeting specific leverage points at different levels of a system that are critical to systems change.
One example of this integrated approach to strategy is NoVo Foundation’s Move to End Violence (MEV), a 10-year program that sought to build the capacity of movements to end gender-based violence in the United States. While always clear about its strategic purpose, from the beginning MEV committed to listening to and being accountable to the communities they supported, understanding that this would shape and shift MEV’s approach. The program began with a focus on developing the capacity of individuals and organizations to be movement-building activists who could address root causes. But MEV evolved its strategy when, as Priscilla Hung explained, “through working with our folks we realized we needed to broaden [our capacity strengthening work to focus on] bridging the tensions between service providers and advocates/organizers, [as well as] what would serve survivors.” Finally, MEV’s strategy evolved again in its last two years to fund organizations led by trans women of color and people impacted by carceral systems, investing in the advocacy capacity of these organizations and leaders so that they could center their policy goals and narratives within the movement. This trajectory has allowed MEV to build leadership and relational capacity across the movement ecosystem and has seeded new partnerships, commitments to racial justice and self-care, and approaches to purpose-driven transformation that will long outlast the initiative itself.
Alternatively, TCE’s Building Healthy Communities initiative illustrates how becoming more responsive to grantees can actually help advance a strategic approach. TCE began its Building Healthy Communities initiative in a highly strategic way, entering the work with a set of strategies, goals, and roles. Listening to community residents, however, led to major changes in their approach. As Tom David and Prudence Brown describe this evolution, “What Manuel Pastor …referred to as BHC’s pivot to power’ was inspired by listening to communities. When residents insisted it’s about power,’ TCE was flexible enough to adapt its own role in convening and funding to prioritize power building.” For instance, when young people spoke out at a TCE board meeting in Fresno about school discipline issues and the need for restorative justice, TCE incorporated goals related to these issues into BHC’s work, committing to championing grassroots and youth organizing to build long-term capacity. More importantly, this commitment to people power and listening to grantees is now embedded within TCE’s strategy for the next ten years, as TCE works alongside movement groups to design and launch the i-Center to build capacity and infrastructure for power-builders statewide.
An approach that is responsive to the capacity needs of those in the system means holding constant to overarching goals while remaining flexible in how to build capacity to pursue them. As the programmatic approach evolves, so too does the approach to capacity strengthening, both in terms of who receives support and how this support is offered.
3. Build broad buy-in across institutions through shared learning and leadership.
Embedding change into a system means philanthropic staff, trustees, organizational divisions, and funder collaborative members must buy into the process. Sometimes an executive transition or a new generation of trustees might prompt strategic planning processes that change the institution’s outcomes and frameworks. Other times, staff members may change their approach as a result of learning from, for example, trainings on systems change, engaging with grantees that are most impacted by systemic inequities, or digesting evaluation data that demonstrate that investing in capacity strengthening goes hand in hand with systems change.
Whether top-down or bottom-up, however, the process of building buy-in must be ongoing, and funders must continuously educate and engage internal stakeholders to collaborate at a deeper level for systems change. Trustees may require staff to conduct systems analyses as part of developing their grantmaking strategy, but doing so necessitates training both staff and trustees to identify the capacities needed to impact overall systems. Foundations may also bring in staff and trustees who are impacted by systems and have experience with systems change and its challenges. For all the funders we studied, collective learning led to a shared understanding about the importance of capacity strengthening to effective systems change.
The Collaborative on Gender and Reproductive Equity (CGRE) provides a useful example of achieving and sustaining buy-in—not just within one foundation, but amongst more than ten funders in a donor collaborative. Founded in 2018, CGRE is a pooled donor fund and collaborative that supports organizations that advance gender equity and reproductive justice by centering the needs and leadership of directly impacted communities. Capacity was at the forefront of its founders’ minds when CGRE began. Social justice organizations were in crisis and grantees were honest with funders about their organizational and leadership needs. Moreover, CGRE had a pronounced focus on state infrastructure – understanding that states with sufficient infrastructure, or the potential to develop it, were mostly likely to impact gender and reproductive justice.
As a result, CGRE focused its efforts on states like New Mexico, where, despite being historically under-resourced, there had already been a decade of investment in grassroots infrastructure. In 2021, New Mexico successfully repealed a statute that outlawed many abortion procedures. CGRE, which began investing in New Mexico in 2020, was able to share this story with current and potential funding partners as an example of strong infrastructure making a difference. As Judy Wright, Director of State Programs shares, CGRE continues to make investments in New Mexico “to create these conditions for change: a trusted movement space, relationships, strong leaders, strong individual organizations, [and] a political environment where they can make change.”
The Omidyar Group provides a different example of developing and maintaining buy-in within a network of philanthropic entities. As a collection of independent philanthropic organizations, businesses, and initiatives, including the Democracy Fund and Omidyar Network, Omidyar Group trustees have always been committed to scaling impact through a venture capital lens. Each entity has the freedom to decide how it will achieve impact through an “impact first, tool second” approach. As a result, the support services division of Omidyar Group has learned how to cultivate buy-in of each philanthropic entity by meeting each group where it is on its journey to adopting capacity strengthening and systems change approaches. As Rob Ricigliano, Systems and Complexity coach at The Omidyar Group explained, “[We] taught program staff to be systems informed or embrace systems change work [in ways that align with] the organization’s values, culture, and capacities.” Each entity is required to focus on interventions that are sensitive to the complex systems in which they operate, and they can decide how much they strengthen the capacity of the system itself. They can choose clear interventions (e.g., focused on direct services), complicated interventions (e.g., focused on scaling services), or even more complex interventions (e.g., focused on transforming enabling conditions and capacities).
While still early in its journey, The David and Lucile Packard Foundation’s Civil Society and Leadership (CSL) initiative team is already embracing the lessons laid out here.
The Packard Foundation is part of a growing group of philanthropic entities that has embraced the importance of investing in the strength of leaders and organizations to achieve systems change. It is our hope that the stories and lessons we have shared make a strong case for the importance of understanding this connection and investing accordingly.
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Read more stories by Susan Misra & Marissa Guerrero.
The coauthors thank Ana Aguilar for her contributions to this research.
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