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Applying an (Eco)system Approach to Funding — Experiences from Foundations and Philanthropies

Strategic Philanthropy | May 6, 2021

The webinar tackled the issue that traditional funding models in international development (and beyond) based on siloed interventions and a projectized logic, rigid log-frames and short-term frameworks are not a good fit to foster societal transformations required for the world to meet the Sustainable Development Goals.

This is an edited version of a webinar on an ecosystems approach to funding. The speakers tackle the issues of traditional funding models in international development (and beyond) based on siloed interventions and a projectized logic, rigid log-frames and short-term frameworks. They discuss why this is not a good fit to foster the societal transformations required for the world to meet the Sustainable Development Goals. The speakers included Erin Sines, Co-Director of the On Nigeria initiative at the MacArthur Foundation; Cassie Robinson, Director of Funding Strategy at The National Lottery Community Fund; and Gautam John, Director of Strategy at Nilekani Philanthropies. 


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As discussions around philanthropy have been evolving and people have started to move from funding single-point solutions or individual projects to applying a system and portfolio approach to development projects, many questions around funding modality have come up, says Giulio. Is it possible for this to become a larger trend in funding, especially considering how difficult a proposition it is? So far, we have seen one type of innovation which leads itself to quick experimentation and the funneling logic – trying different things to see which one sticks and is an exception to the rule. This type of innovation is suited to working within existing systems. However, if we want to work around systems, we need another kind of innovation which uses a different type of lens and underlying logic. We need to readjust the way we understand issues and plan interventions accordingly, Giulio explains. The aim is not to diminish our options over time, but actually to increase them by providing the people within a system with new options to tackle very difficult issues. We call this approach ‘layering’ and as we try to move from one model to another, we have to look out for people and organisations who are thinking along these lines and asking different questions about how funding can truly have an impact, he says.

Building Lasting Change  

Erin Sines from the MacArthur Foundation is one of the people invested in supporting transformational systems change. Her team is involved in interesting work in terms of the time horizons that they work with and how funding is provided to partners in support of systems logic. Six years ago, the MacArthur Foundation went through a significant reorganisation, she explains. One of the new models of programming that they have is called a ‘Big Bet’. These are time-limited programs designed around an opportunity or a problem, meant to exist for 10 years and then exit. They’re all meant to strive for some kind of transformative change in an area of profound concern with the understanding that MacArthur will not be involved in that topic forever. MacArthur has four Big Bets, says Erin. One is on climate solutions i.e. working to prevent climate change; the second is about criminal justice reform in the US; the third is working to reduce nuclear threat around the world; and then finally, there’s On Nigeria, the Nigeria-based anti-corruption program.

On Nigeria was started in 2015 and will exit in 2024. Their exit is public and all of their grantees, partners, and peers know about their timeframe. With a topic like corruption, they knew that messaging solutions and demand for policy change had to be led and informed by Nigerians. So they have about 100 grantee partners, the majority of which are diverse Nigerian civil society organisations like government agencies, media houses, entertainment companies, universities, and faith-based organisations. They have four overlapping and mutually reinforcing portfolios, Erin explains – criminal justice reform, independent media and journalism, advocacy, accountability and community participation, and finally a behaviour and norm change portfolio. 

The idea is that a strong, deeply connected civil society, independent media, a functional justice system with a lot of coordination among the actors, a good anti-corruption policy framework, and communities that have some agency and capacity to bring attention to the issues that matter to them, will bring lasting change to Nigeria, she says. So the foundation’s grant making is geared in service of that. They also hypothesise that the way we work can contribute to systems change. Therefore, they ask all of their grantee partners to work in a coalition which they call the ‘cohort approach’. Instead of making single advocacy grants, a package of 10 to 20 grants are made at the same time to organisations across the country working on similar issues. They share information as they’re writing their proposals, identify possible areas of overlap or coordination, and get their money at the same time.

Over a three-year project, they continue to share information with each other and collaboration happens organically, Erin notes. By meeting twice a year to share information, plan, and strategise, they also reduce the duplication of effort. For example, if one organisation has strong monitoring and evaluation skills, they’ll often design the data collection template for the group so the other 19 can just adopt it. They’re also able to divide up a state or region more effectively and coordinate their advocacy visits and talking points. In an anonymous survey and focus groups administered by a third party, organisations have expressed how much they like working in this way. They’re not competing for money, they have peers and partners, and many of them plan to work with these new peers and partners after On Nigeria ends, says Erin. Surveys also help the foundation plan their strategy and way of working. For example, initially organisations had mentioned needing additional support to collect their own monitoring data, analyze it, and make decisions with it. So they hired an outside firm to work to provide tailored one-on-one support for monitoring and evaluation. They have also done the same with communications and behavior and norm change approaches. Funds that are separate from the grant-making budget are used to fund skill building initiatives that grantees mention that they want to work on.

On Nigeria evaluates projects at the strategy level rather than individual projects because strategy outcomes are far more important, says Erin. Their external learning and evaluation partner, EnCompass, collects data on strategy progress and facilitates regular learning sessions for staff and grantee partners, to understand and use the data to make changes. All important decisions are based on the data procured and the foundation has ended some portfolios which showed that there was no political will to make progress happen, even if the grantees were doing excellent work. To be successful in Nigeria, it’s critical to ensure that resources are spread across the country and that grantee partners are thinking about gender, age, geography, ability, faith, and ethnicity in their programming and hiring. Skill building and collaboration along with gender equity and social inclusion are so important to the success of the program that they are seen as strategy objectives, she says. By 2024, Erin is confident that even though there will be more work to get done, they will be leaving behind a stronger accountability ecosystem, a more harmonised criminal justice system, a more independent media sector with higher quality reporting, and communities that are able to demand attention to the local governance issues that really matter to them.


Investing in Ecologies, Assemblages, Networks

While working with the National Lottery Community Fund, Cassie Robinson was able to bring together different internal stakeholders, experiment with new approaches, and co-create funding strategies across the fund. The fund had been doing work that could be described as systems change before Cassie arrived, however she notes that this work was primarily about changing the existing system, shifting power, and using participatory grant making. With their Growing Great Ideas program she says they are able to go beyond individual organisations and look for initiatives that are generating an infrastructure through which many other things are possible, investing in ecologies, platforms, ecosystems, assemblages, and networks. This is different language than the fund usually used, which is apt since this is something new that the fund has launched.  Rather than providing funding at a niche, grassroots level, the idea is to now initiate change on an institutional and narrative landscape level. 

To Cassie, these new kinds of initiatives and ecologies need to have certain core qualities – equity in the work they are trying to carry out, for people and the planet; moving away from old systems to try and create something new; exploration, curiosity and inquiry in what they are doing; and the momentum behind the initiative so that it can become a growing ecology. So far, the grants that have been awarded are for 10 years, she says, which is double the previous grant lengths. They have also tried to move away from the language of core costs because it is misleading when speaking about ecologies that are alive and growing, she says. Rather than stating what they will fund, they are clearer about what they won’t fund such as furthering the agenda of a single organisation or a project that only involves a single approach to change. Through ecology modelling, they are able to suggest developing, creating, and transferring energy and ideas. Since the actual purpose of an organisation is something that emerges and evolves over time within their strategic mission, these grants provide the security for long-term thinking as well as agility and responsiveness. So far, they have made nine grants and have some more that will be made in the future. 

In addition to investing in ecosystems, she also recognises the need to fund different tools around that. So an organisation has been commissioned to work with the nine grants that make up a wider ecology, in order to do the necessary narrative and culture work. They are also commissioning people to do what they call a deepening of ecologies i.e. relational learning with the cohort, and their evaluation, evidence, and insight team will consider what the role of data is and how to then think about measuring progress. This is a new program, says Cassie, so there are many assumptions that need to be tested out – whether ecologies can shift structural barriers that get in the way of change; whether governance at the fund and the ecology can be flexible enough to follow the work; and whether it’s possible to fund an ecology and not just the people in the organisations. 

Cooperation, Collaboration, and Co-Creation

Gautam John, Director of Strategy at Nilekani Philanthropies, notes that in India the discussions around philanthropy and systems change is a new and emerging idea and perhaps not as well developed as it is in other parts of the world. As a private philanthropy that has been active in India for about 20 years, Gautam explains that they anchor their work in the idea of a good society i.e. a society that is underpinned by constitutional values and framed in a democratic structure. However, over time and conversations, they have begun to understand that this framework may be too narrow and limiting to properly respond to the times that we live in. Democracy and constitutional values in a society are an emergent outcome of a series of conditions that we create, so what we need to do is work on issues around agency, belonging, and power in order to create the opportunity and the conditions for democracy to emerge, he says. 

Over the last 10 years, they have begun to go deeper and look at the underlying conditions of systems and viewing philanthropy as a bridge that can create the societal skills, institutions, and platforms for the value systems outcome that they are seeking. It has changed the way they approach the work that they do, provided a different lens to see what systems and ecosystems work can look like, and clarified their own role in this, says Gautam. In particular, there are certain core values that anchor their philanthropy in. One of them is learning. They have learnt alongside their grantee partners over the past five to seven years and have been able to appreciate the broken system that manifests itself as societal failures. By making this journey with their grantees, it’s allowed them to see the opportunities to fix broken systems and underlying inequalities and realise that systems and individuals are not binaries at odds with each other. We have always posited the individual who is aggrieved against the system that has caused this, but they are not binaries but polarities to balance, Gautam explains.

As funders, they have recognised that their role is not necessarily to fix systems that are not functioning as they should, but to bring together unusual coalitions and collaborations of people who are able to see the system and articulate their position and role in changing it. In terms of their own work, he says that they have articulated their role as a funder of systems change in five values. One is that they lead by trust, not log frames and don’t seek to hold people accountable to outputs, but rather partner in long-term change. They are curious, not certain, so they hold organisations accountable to process-based learning outputs rather than metric-based ones. They are deeply accepting of failure since working at the level of the system is complex with a higher rate of failure. Therefore instead, they have deeply embraced the idea of the commons i.e. everything funded by philanthropic capital must be public goods so that failures are also a valuable tool for others to build on. The fourth value is a sense of humility in the face of this massive undertaking of truly creating change on a systems level. Finally, the last value is patience. They have moved from short grant cycles to an average of three to six year grant cycles now, in order to enable deep and meaningful change.

Gautam mentions that they have been able to distill the three models of systems change that are relevant to their context. The first has been inspired by the MacArthur module of the portfolio approach, where they create a space for organisations that are unified in intent but take different and complementary approaches to exist side by side. The aim is to create definite pathways to cooperation, collaboration, and co-creation of common infrastructures to address the systemic failures. What is new for them is the need to surround these portfolios with incredible amounts of support across a variety of spaces whether it’s technology or communications. This is something that has been particularly important to build and Gautam says that they are doubling down their efforts in this aspect going forward. Systems changes are not technical shifts, but deep muscles that must be built and therefore it’s necessary to create the normative shifts that help amplify all of the work, he says. The portfolio approach is also new to them because traditionally, they have funded areas of work whereas now they are funding systemic shifts. 

As a philanthropy, it has meant that they have to change how they curate the organisations they support and what they look for in leaders. This has been the biggest shift for them, he says. There are three levers of leadership that are necessary for organisations to work, cooperatively as well as systemically. Leaders need to see themselves differently in terms of the leadership model they bring to the organisations. The organisations should be able to work in the ecosystem, anchored in purpose and built through empathy, and should believe that change is inevitable, that there has to be a bias to action, and that collaboration is in their DNA. This doesn’t come easy to civil society organisations in India, says Gautam, because that hasn’t been the tradition here. So there is a necessity for system changing leadership at the level of self, at the level of others, and at the level of the system and this is something that they are focused on highlighting as they look for leaders – they need to be able to see the problem differently, see their role differently, and therefore, construct their approach differently as well.

The second approach is in the context of the access to justice space, where they have been experimenting with creating and putting out an independent organisation. It’s akin to venture philanthropy, in the sense that it is both a participant and a catalyst. The goals are to fill the gaps by actively engaging and creating pieces of work, capitalise and commission other organisations to fill some of these gaps, and to coordinate all of this work towards creating systemic change. Their first experiment has been successful and they are now trying out this approach in other spaces as well, to see what the role of a good venture philanthropy body can be, explains Gautam. The last model is where they partner with Co-Impact on the idea of societal thinking or change at scale. They have now understood the limitations of the traditional idea of scale and are engaging with how to create a new way of creating infrastructure that can amplify the work of all existing actors in a system to create context-specific solutions using lightweight digital platforms. The idea is to solve complex problems at scale and with urgency and sustainability. 

Funding New Possibilities

One of the factors that drove a shift in funding at MacArthur was a feeling of dissatisfaction at the board level about their place in philanthropy and whether they were making enough impact, says Erin. They had been supporting some of the programs for almost 40 years, but they also felt a pressure to act with more urgency and respond to the new challenges that were arising in the world. What helped was that the board allowed them almost total freedom in designing this program, which is unlike most other anti-corruption programs. They asked hard questions and didn’t always agree on things, but they allowed the space for experimentation and change in the strategy. Having that flexibility and trust was extremely helpful, she says. 

It’s difficult to convince people to take an imaginative leap and invest in a kind of vision or the idea of a new possibility, says Cassie. Most funding organisations are used to funding around problems at a service level, with clear outcomes. Since they are a big funder, Cassie points out that they have different funding programs and are not doing ecosystem systemic transition funding across the board. However, she suggests that the pandemic has created more legitimacy to exploring different approaches. It became clear that the current systems didn’t work and so she was able to use this as an argument to convince others that we do need to find different ways to approach problems. 

In Gautam’s experience, the philanthropy’s largest and oldest area of work in water and conservation made it clear that in order to affect change, we must approach challenges at the systemic level. Their work began around clean drinking water, however they soon realised that everything is connected with community. Groundwater management is the way out, with all of the complexities, actors, and incentives. Similarly, when working in conservation, they realised that the challenges of climate change could only be confronted at a systemic level. Once they were able to see this, they began to apply this thinking more widely and examine how systemic failure can be dealt with in other areas as well.   

As Giulio points out, the shift from evaluating a whole portfolio rather than one individual activity in isolation is a fundamental change in how we look at things. This approach also involves a profoundly generative logic, where interventions must happen with options, infrastructure, connections, new framing, etc to be able to develop new solutions by itself over time. Cassie mentions having to measure things like the health and vitality of the ecology, the capabilities, and how the ecology is working together, deepening, and growing. What’s important, she says, is that we have spaces to share our work and learnings. Erin agrees, stating that six years into halting evaluations of individual projects does not feel like they have lost anything. Not everything that we or our grantees do will be successful, and that’s fine, she says. What we should really be interested in is collecting data so that we understand how the work is going and we’re able to tell this story to others. It has freed us, she says, and enabled us to focus on the bigger picture like the media sector at large, the quality of investigative reports, or the quality of how certain laws are being implemented. This is so much more important than the individual tactics that people are using, says Erin. 

As we realised how interconnected things were, says Gautam, we knew we needed a more formal way for everyone to learn alongside the work. Instead of holding it at the foundation, they commissioned a learning partner which worked with each grantee in the portfolio to synthesize the learnings and then disseminate it and bring it back to synthesis. This is not for monitoring or evaluation, but simply for learning, he says. The portfolio approach works really well because we have created a space of trust because there’s somebody whose only role is to surface opportunities for collaboration and missing pieces of a jigsaw puzzle, he notes. One of the biggest problems they have faced in this approach is an efficient workflow that allows everyone visibility of others. Instead of trying to solve this through a technology platform, their solution was to have a partner whose only job it is to surface learnings and opportunities for the jigsaw puzzle to put together.

It’s the beginning of a journey in many different ways, says Giulio, and we need to rethink what the organisation identity and the role of that is in the sector. What relation do we have with the people that we fund, and how do we see ourselves in a different way in relation to them? We are all at different stages on this journey, but having so many people embarking on this together is inspiring, he says. 

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