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System Shifts in Philanthropy – Giving Credit Where Credit is Due

March 22, 2021 - By Heather Grady

Historically, the ides of March—the 74th day in the Roman calendar—was a time for settling debts. In March 2021, the philanthropy sector has the opportunity to reflect on our good fortune, think anew about to whom we owe a debt of gratitude, and to consider how to more boldly leverage repayment to multiply the impact of that debt.

In the past year, the COVID-19 crisis and Black Lives Matter movement have focused the world on issues of equity, power, racial justice, and accountability. They have also further exposed the imbalance between the great wealth that philanthropy holds and the funding that it directs at durable, systemic impact. In the Scaling Solutions toward Shifting Systems initiative, we too acknowledge those who question the status quo, and feel a responsibility to respond by improving the norms and practices of funders.

The convergence of challenges over the past year has brought forth forceful imperatives for change, and raised awareness of three related, but distinct positive trends in the philanthropy sector.

Shifting Power Dynamics

The first is the expansion of public commitments by funders to do better in terms of listening, reducing bureaucratic burdens on grantee partners, and acknowledging those partners as experts. Examples include The London Funders Pledge, the Council on Foundations Pledge, and a similar commitment by funders in China.

In essence, these pledges recognized shifting needs and timelines, and gave greater flexibility in how the grants were managed. And, in the case of each pledge, at least some funders are committing to  retaining such practices beyond the end of the COVID crisis. The Center for Effective Philanthropy and many others are already monitoring accountability to these pledges, and undoubtedly the field will analyze and report on how this flexibility helped improve trust and responses to the communities each organization serves.

A Systems Mindset

A second trend is the growing adoption of systems thinking in philanthropy. This is helping funders turn their gaze to the root conditions underlying complex problems—and towards a deeper understanding of the power and influence they have to shift systems. This different way of seeing is leading funders to embrace systems change approaches such as:

  • committing long-term to issue areas and program partners;
  • collaborating more and better;
  • changing how they evaluate impact;
  • engaging different sectors (e.g. government and business) in long-term change;
  • addressing power dynamics;
  • recognizing the core role that bold activists, movements, networks, and social entrepreneurs play; and
  • above all: radical listening to those deeply entrenched within the communities for which they seek to effect change.

There are more and more examples of these practices in action, including environmental efforts like Oceans 5 and the Global Commons Alliance, health initiatives such as LiveWell San Diego and Place Matters in Oregon, and collaboratives influencing philanthropic practice like the Fund for Shared Insight and the interdisciplinary Catalyst 2030 network.

The Trust Factor

A third trend is placing trust and humility—the foundation of healthy relationships—higher on the scale of desired attributes of funders. As one individual recently interviewed by Rockefeller Philanthropy Advisors said,

“The philanthropy sector was set up to say ‘no’ – because theoretically, funders have a limited pool of resources, but there are endless potential recipients. Therefore, grantee partners must prove themselves again and again and rigorously document all that they do. The fallacy of this approach is that most funders are working with established organizations who already have a good track record while for individuals and organizations who don’t, it is precisely the philanthropy sector that could afford to take risks on untested innovations.”

Individuals can embrace and exhibit trust and humility. For example, MacKenzie Scott received well-deserved praise for successfully deploying $4.2 billion in a four-month period to great organizations throughout the country, with just a small team of trusted advisors. Institutions, too, can embody these traits. Examples of this approach are found in Thousand Currents, the more recently-established Democracy Frontlines Fund, which awarded $36 million to 10 organizations by creating an advisory committee for decision-making, and many partners of the Trust Based Philanthropy Project

More than a year ago the Ford Foundation published What It Really Takes to Influence Funder Practice, which pointed to four requirements to influence funders: evidence, examples, engagement, and ease of adoption. Sufficient evidence, and numerous examples, show how more equitable power dynamics, increased use of systems approaches, and greater trust and humility are improving results in philanthropy—though evidence and examples aren’t enough to create the deep shifts needed.

Expanding Funder Engagement

To reap the full potential of these changes, we will need exponentially greater engagement of funders in using these practices with others who are ready to embrace them.  We also need to make it easier for funders to find the tools and expertise to use them. Fortunately, the capacity of the social sector is robust; the School of System Change, Collective Change LabAcademy 2063 driven by Africa’s Future, India-based Desta, and Blue Marble Evaluation are just some of the outstanding organizations and networks filling this need.

So, while the challenges are great, in this year’s ides of March, our team is filled with gratitude. Let’s thank the pioneers within philanthropy who are daring to work in non-traditional ways, and the many organizations that are enabling and pressuring us to change. We owe this, at least, to the many communities and causes around the world whom we exist to serve.

Our team is tracking progress as we go, so please get in touch with our Scaling Solutions team to share your work or that of other philanthropic leaders we should document and celebrate in the year ahead.


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