Funders at the forefront of advancing systems change are shifting from being at the center of social change efforts to being a facilitator, connector, and learner in a larger ecosystem of actors who are working to create lasting, systems-level change. This trend has been underway for some time, but we are encouraged to see increased momentum in recent years inspired by the work of the Trust-Based Philanthropy Project and others. Many funders have embraced trust-based practices as a way to reshape power dynamics in the traditional funder-grantee relationship, while others are extending these principles to funders’ relationships with the systems they seek to transform. This is more than a shift in power between funders and grantees, but a strategic redistribution and application of power, including the power of others, across an ecosystem to create change.

By applying the principles of trust-based philanthropy to navigate relationships across a wider ecosystem of stakeholders, funders can redefine their role in advancing systems change. Instead of seeing themselves as the central focus, funders become one component of a larger ecosystem. This ecosystem approach fundamentally changes the work of funders, and influences how they conduct strategy development, implementation, and learning and evaluation alongside grantees and partners.

One of the most basic misperceptions (and sources of critique) around trust-based philanthropy (TBP) is that it dismisses the importance and value of strategy. There has been much written recently about the fallacy of this perceived contradiction, emphasizing that TBP is strategic. We wholeheartedly agree.

Strategy involves answering fundamental questions about which issues a nonprofit or foundation aims to address, why these issues are chosen, how the organization is approaching creating change in those areas, and the expected impact of these efforts. These fundamentals are essential to providing direction to an organization’s work and are essential for enabling trust and collaboration between organizations because they allow for effective communication and mutual understanding of each other’s work.

The challenge is that funders and nonprofits are working in complex and rapidly changing environments where no single organization or individual has access to all information and does not have control over all the actors in an ecosystem.  As a result, it is often impossible to develop a strategy that will provide step-by-step instructions to a desired outcome, and so solutions must be adaptive. Strategy in complex systems must serve as a compass instead of a map, laying out a clear direction and focus for the work and then enabling learning and course correction along the way. Traditional strategy tools like theories of change can be helpful for getting internal and external alignment on how funders and their partners anticipate change could happen, but they must be treated seriously as the theories that they are and regularly re-examined and adjusted based on new information and shifts in the field.

For funders focused on systems change, applying trust-based principles to the strategy setting process is imperative for navigating the complexity inherent in systems. When developing a clear focus to guide their work, it is critical for funders to consider multiple perspectives, particularly from those who are closest to the problem (e.g., grantees, community members).

Read the full article about ecosystem approach by Chris Carlson Neyat Daniel Fay Hanleybrown and John Harper at FSG.