If you’ve spent any time in philanthropy or impact investing, you’ve seen this: On the surface, a funded project is successful; the subsequent reporting is positive, and yet the underlying problem the project is trying to solve persists. A loan helps a social enterprise grow, but external factors make it challenging for the organization to thrive and scale its impact. A grant funds an exceptional program, but the challenges that prompted the grant remain.  

If these scenarios sound familiar, you’re not alone. Investors and philanthropists tired of facing these results are increasingly turning to a systems change approach to rethink how they invest, so that they can more effectively tackle the challenges they care about.  

What does it mean to invest with a systems change approach? 

Adopting a systems change approach in your investment strategy requires thinking beyond individual transactions. Instead of asking, “Is this a good investment, and what direct impact will it have?” investors with a systems change approach ask: “What role does this investment play in the system as a whole? Does it address the root cause of the problem, or just its symptoms? What effects, feedback loops, and unintended consequences might it cause?” A systems change approach requires understanding the broader context in which an investment operates, including how it helps, or fails to help, address the root causes of the problem. 

Why adopt a systems change approach now?  

Whether you seek to tackle large-scale issues like climate resilience, or hyper-local issues, like improving education outcomes for a single school district, all social problems, regardless of scale, are affected by many factors, meaning no single grant or loan can address them fully.  Because of this, for the last decade, there has been growing interest from both the philanthropic and financial sectors to explore systemic solutions as a pathway to achieve greater scale and durable impact, and to mitigate investment risk.   

Who should consider a systems change approach?  

A systems change approach is relevant for those who design investment strategies, professionals conducting due diligence, those structuring transactions, and those who measure and manage impact, as well as for members of boards or investment committees.  If you are already deploying capital for impact purposes, or considering supplementing your grants with investments, consider applying a systems change approach to deepen your impact.  

What changes when you implement a systems change approach? 

For decades, RPA has worked with philanthropists and investors around the world. Drawing on those lessons and on industry best practices, we’ve identified six key shifts needed to begin applying a systems change approach: 

1. Value systemic perspectives. Shift from linear, isolated thinking to approaches that recognize interconnections, feedback loops, and the dynamic nature of systems. The goal is to find the leverage points, the places where a focused, well-targeted intervention can set off a multiplier effect. A simple first step would include drawing a systems map of your investment area. 

1. Reimagine capital deployment. Strategically combine different forms of capital (i.e., financial, social, human) with tools like blended finance and catalytic capital, while adopting longer time horizons. 

1. Transform investment strategies and portfolios. Build your portfolio as an interconnected ecosystem, not a collection of isolated deals. That means adjusting your selection criteria to ask how each investment contributes to the impact of the portfolio as a whole. To start, add two or three systems-focused questions to your existing selection process. 

1. Evolve ecosystem dynamics. Move from transactional relationships to collaborative partnerships. For example, join alliances or collective impact initiatives, and co-create goals and metrics with others working on the same problem. 

1. Reframe impact measurement and management (IMM). Move from static, accountability-driven reports to dynamic frameworks built for learning and adaptation. In that vein, shift from claiming credit for the impact of your own investments to assessing how they contribute to system-level change, which is in reality produced by many actors and factors. 

1. Enhance IMM for systemic impact. Broaden what you measure to include system-level effects, bring in diverse data and perspectives, and develop indicators tied to the leverage points you’re targeting and the chain of effects they set off. 

Who is already practicing this way of investing? 

Working on systemic transformation can feel intimidating and too complex to tackle alone. But, in reality, it can be adopted incrementally, through small steps that yield significant results. A systems change approach is not just a theory, nor is it an entirely new concept. Many organizations around the world are already practicing this work, even if they don’t necessarily label it as such.  

For instance, in Colombia, the Arturo Sesana Foundation has used system mapping to identify twenty levers of transformation intended to support the living conditions of older adults. This mapping allowed the organization to reassess its role and change the way it measures the impact of its programs.  

In the UK, Access Foundation, a wholesaler that channels government funding to charities and social enterprises through intermediaries, reframed its strategy from a supply-and-demand model to an ecosystem vision. As a result, they found that strengthening the resilience of their delivery partners and the greater intermediary ecosystem was just as important as deploying capital directly.  

How and where can you learn more about this topic? 

RPA accelerates philanthropy in pursuit of a just world. Part of this mission includes ensuring that funding gets mobilized effectively in order to ensure the greatest impact. To facilitate this, we have published several free reports that serve as a starting point for those looking to implement a systems-change approach to impact investing: 

• The Impact Investing Handbook is an excellent starting point for those just beginning to explore the field. It features case studies and detailed guidance for individuals, families, foundations, and corporations.  

• The Systems Thinking for Impact Investing Primer dives deeper into the six key shifts outlined earlier, framing why systems thinking matters, introducing an integrated framework, and providing practical starting points and examples of organizations already doing this work.  

• The Systems Thinking for Impact Investing Playbook complements the Primer by offering tangible tools to bring systems thinking into investment practice, IMM processes, and strategy development.  

Outside of these resources, one of the most effective ways to continue nurturing this work is through peer-to-peer exchanges. Groups like TWIST (Together We Invest for Systems Transformation) bring together investors from around the world who are actively deploying capital and/or facilitating processes for positive systemic change. Organizations like TransCap Initiative help scale systemic investing practices through research, prototyping, and field building.  

RPA also offers advisory services to philanthropists and impact investors alike and stands ready to support those who are looking to apply a systems change approach to their practice.