Foundations and Systemic Change
How can foundations and philanthropic organizations best contribute to solving complex societal challenges in Denmark?
August 2024
Philanthropic foundations and organizations hold significant potential to strengthen and accelerate efforts to address the complex societal challenges we face.
Complex Societal Problems Must Be Solved Together
In recent years, there has been a growing recognition in Denmark that society faces a number of challenges that are difficult to solve. Whether it concerns the climate crisis, the well-being of youths, the labour shortage, or health inequities, these issues have proven extraordinarily difficult to address. Multiple stakeholders point to the fact that these problems remain unresolved because they are systemic, complex, and “wicked,” and thus cannot be tackled by one or two parties alone.
Systemic Change Is the Key, and Foundations Can Play a Central Role
Systemic change offers a new approach to addressing problems by altering the conditions that sustain a problem, rather than merely alleviating its symptoms. While systemic change requires time, foundations and philanthropic organizations can foster sustainable and systemic changes by shifting their focus from short-term, activity-based funding to a more long-term, collaborative, and supportive approach.
Inspiring Dialogue and Action Among Foundations and Partners
The purpose of this white paper is to identify needs, barriers, and opportunities so that foundations currently working on or aspiring to work on systemic change can strengthen their efforts to address complex societal challenges. It is our hope that this white paper serves as a starting point for enhanced dialogue and collective action across foundations, public authorities, civil society organizations, private companies, and other stakeholders to solve complex societal problems and secure a better future for coming generations.
White Paper Based on Robust Data
~200 survey respondents, including foundations, civil society actors, and public authorities
+40 reports, articles, and journals reviewed in an extensive literature review
25 in-depth interviews with foundations, NGOs, public authorities, politicians, and more
5 interviews with other experts in systemic change, both in Denmark and around the world
A systemic approach supported by foundation structure, deep problem understanding, collaboration, and the right tools can advance the work with complex issues
A Model Can Pave the Way for Working with Complex Problems
Systemic change is not an end goal in itself—it is about solving complex societal problems. By increasing awareness of how to work systemically, foundations that already engage in systemic change or wish to do so can strengthen their efforts and improve their ability to navigate collaborations with other actors to solve these complex societal challenges. This model outlines three preconditions and several leverage points to guide foundations in addressing complex problems through systemic change.
Foundations should actively choose a systemic approach, but the language should not hinder collaboration with other actors
A systemic approach views problems as complex and embedded within systems. The responsibility for solving these problems cannot rest with one or a few actors but must be addressed collectively by actors across the given system. However, foundations must avoid allowing differences in terminology to hinder collaboration and remain open to collaborations without imposing specific frameworks or jargon.
Systemic Change Is Not an “Either-Or” Choice for Foundations
Some problems are well-defined, while others are wicked and complex. Both traditional, short-term foundation work and longer-term, systemic efforts have their place. Systemic thinking can be integrated into all or parts of a foundation’s activities, depending on its goals and ambitions.
Three Preconditions Six Leverage Points
A systemic approach
Complex problems are embedded in systems that consist of roles, relationships, frameworks, resources, and outcomes.
Adapt the Organization to Systemic Change
Organizations must support bold decisions with a long-term focus.
Based on the context of the problem and the roles of the foundation, the right tools are chosen to promote systemic change
Knowledge Facilitating collaboration
Capacity and competence building Financing
Understand Problems and Engage in Collaborations
Long-term collaborations with a shared vision, understanding of the problem, and an awareness of power dynamics.
Advocacy
Evaluation and learning
The work on systemic change begins with the foundations themselves, and their internal organization must be able to support efforts using a systemic approach.
Foundations point to several internal barriers to systemic change
Clarify the roles the foundation can and wishes to play in relation to systemic change
Case Example: KR Foundation –Focus on Internal Organization
Several foundations have already started adopting aspects of the systemic approach, such as an increased focus on long-term efforts and more cross-sector collaborations.
However, many foundations also report encountering various internal barriers that limit their ability to address complex societal challenges.
Uncertainty about the effectiveness of initiatives aimed at systemic change is cited as the biggest barrier for foundations in their efforts to contribute to systemic change.
Many foundations also face challenges in measuring and evaluating the impact of systemic efforts. Some foundations lack tools for accurate impact measurement, while others rely on indicators that do not support long-term efforts.
The foundations’ charters and strategies can limit their scope for working with systemic change. It is therefore important for foundations, within the framework set by their charters, to determine the roles they can and wish to play in systemic change efforts. For example, foundations can consider whether they primarily want to provide financial support or take on a more active and steering role, such as leading and shaping specific initiatives.
The strategy must set the direction
The strategy should define how the foundation works systemically and create a shared understanding of the systemic approach and the foundation's chosen roles.
The foundation’s chosen roles must be supported by internal organization
Foundations must ensure that their internal organization enables and supports more long-term, patient, and risk-bearing contributions to system-changing initiatives. It is therefore crucial to involve the board and remain open to making adjustments in the foundation’s governance, competencies, and the requirements set for measurement and evaluation.
KR Foundation is a charitable climate foundation that, from the outset, has made an active decision to work systemically. To this end, the foundation has clearly defined: 1) what it wants to change, 2) the role it wants to play, and 3) what tools it will use.
The decision to work systemically has had implications for the foundation’s strategy, which has been designed to be flexible in order to ensure continuous adaptation to a changing context. This means that the strategy is not tied to specific KPIs but instead provides a “direction of travel”, establishing overarching goals for the foundation.
The Board of KR Foundation is crucial for supporting the foundation's work on systemic change. Rather than focusing on strict measurement parameters, the board has prioritized long-term changes and flexibility. This approach has effectively supported the implementation of KR Foundation’s strategy.
A deep understanding of the problem is central to systemic change work and forms the basis for engaging in long-term and trust-based collaborations.
Deep problem and system understanding is crucial
Working with complex problems requires a deep understanding of the underlying mechanisms and causes. Seeing problems in their systemic context provides insight into what shapes and sustains them, which actors are involved, and how they perceive the problem. A system can be understood through the five Rs: framework conditions, resources, results, and the roles and relationships of actors.
Deep understanding of problems through knowledge
Foundations can contribute knowledge about problems by initiating research, analysis, and involving stakeholder perspectives. They can also bring new issues to the agenda by generating knowledge that redefines the understanding of problems.
Deep problem understanding forms the basis for collaboration setup
A deeper understanding of the problem makes it possible to identify relevant partners and can inform how the collaboration should be organized and which initiatives to undertake. The organization of the collaboration will always be determined by the specific context and problem.
Foundations must engage in long-term and trust-based collaborations with attention to power asymmetry and anchoring
have experienced compromising on the goal of systemic change in order to meet donor requirements 53% want to strengthen collaboration with foundations 82%
Foundations are sought-after partners in the work of systemic change, with long-term collaborations being particularly important. The long-term focus allows actors time to work on the problem in depth and to continuously adapt efforts, while early attention to anchoring ensures that the initiative continues even after the foundation exits the collaboration. At the same time, the long-term perspective requires mutual commitment between partners, making trust in the collaboration crucial. However, foundations need to be aware that their typical role as donors can create power asymmetry in the collaboration, which may negatively impact the collaboration. It is therefore important to mitigate power imbalances, for example, by delegating decision-making authority to collaborators.
Foundations have a range of concrete tools available to work with complex societal issues.
Tools are Chosen with Consideration for the Context of the Problem
Tools should always be selected strategically, considering the context of the problem being addressed and the role the foundation aims to play in a given collaboration. Applying tools effectively cannot be formulaic, as each context and issue requires a tailored approach. Tools that prove effective in one scenario may be ineffective, or even counterproductive, in another.
This is why all initiatives must be grounded in a deep understanding of the specific problem and its underlying causes.
Tools Can Be Used Both Directly and Indirectly
Foundations can both apply and support the use of tools. This means that foundations do not only use their own resources and capacities to directly promote systemic change, but also support other actors in effectively utilizing specific tools.
In some cases, foundation employees conduct research and analysis themselves, but there are also many examples where foundations finance, for example, research institutions to provide a specific knowledge base. The decision to be the executing actor or to support others may depend on factors such as the foundation’s own resources and competencies, as well as how deeply they wish to engage in a given collaboration.
Foundations’ tools can be grouped into six categories:
Financing
• Multi-year grants with flexible frameworks
• Funding for ongoing operations
• Funding for experiments
• Social impact investments
• Investments in social or green enterprises
Knowledge
• Building a Shared Understanding of Problems through Knowledge
• Practice-Oriented Knowledge Building through Experiments
• Strengthening the Broad Knowledge Base through Knowledge Dissemination
Facilitating
collaboration
• Foundations can be facilitators in system-changing collaborations
Capacity building
• Foundations can contribute to capacity and competence building among their partners
Advocacy
• Foundations can use advocacy to influence the agenda, behaviour, and attitudes in relation to systemic change.
Evaluation and learning
• Foundations can contribute to establishing robust learning circles
Foundations can use three strategies for utilizing tools to support work on complex societal issues
Three archetypal approaches to the use of tools
There are three strategies that foundations can choose in working with tools: “Make it happen,” “Help it happen,” and “Let it happen”. The choice of strategy is based on the specific problem and actor landscape at hand, and it involves different roles, opportunities, and requirements for the foundations.
The three strategies are archetypes, and approaches and tools should always be selected pragmatically, based on the specific issue at hand. In practice, foundations will often use different strategies across various initiatives.
Fundamentally, all types of tools can be applied across all three strategies, though their execution will vary.
By understanding these three strategies, foundations can effectively tailor their tools to the most suitable approach for different types of problems, actor systems, and contexts.
