Embracing Complexity: Towards a Shared Understanding of Funding Systems Change

As we stand on the threshold of an epochal decade, we are confronted with an urgent need to find, fund, and support transformative solutions at a far greater pace than ever. To that end, Ashoka and McKinsey invited additional partners to join their annual collaboration to co-create a shared perspective: Catalyst 2030, Co-Impact, Echoing Green, the Schwab Foundation for Social Entrepreneurship, the Skoll Foundation, and SYSTEMIQ. Together, we seek to reflect on the sector’s insights to the question: how do we get better at funding and supporting systems change?

This report is the product of a collaboration between three groups that have mostly addressed the topic individually: funders and intermediaries in the social sector and the systems change leaders they aim to support. As a group of publishing partners, we are united in the conviction that solving the most complex challenges humankind faces today requires both a systems change approach and collaborative action by all stakeholders. We further believe that many funders, including those contributing to this report, need to evolve their funding practices to better support and accelerate the corresponding efforts of practitioners in collective systems change efforts.

With this report, we aim to reach those in the funding community who want to evolve their current model to invest in systems change approaches. The ideas we propose are not absolute truths; rather, they are the first few steps in our own collective journey to learn about and embrace funding practices that are aligned with systems change. They build on a broad foundation of existing literature on the concept of systems change and how it can be supported, as well as the lived experiences of more than 200 individuals who contributed to this report. Our hope is that by distilling their strategies and processes, this report will point to the transformation needed in the “system” of funding systemic change itself. We invite the funding community – including philanthropists, foundations, impact investors, corporate donors, government agencies, and multilateral organizations – to fundamentally rethink and redesign the way systems change approaches are being supported.

The journey will continue well beyond this report. The funders who have contributed acknowledge that they themselves are not perfect, and must do the hard work needed to embrace many of the principles and recommendations proposed in this report. We humbly ask you to join us in this journey. Together, we can change the system of funding transformative change, so that humanity is better equipped to address the urgent challenges we face.

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