5 funders supporting systemic change

Institutionalised philanthropy isn’t solving society’s problems. This article explains the main issues with how traditional funders work. Then it shares examples of funders who’ve created new models.

What is institutional philanthropy?

First let’s name what we mean. Institutional philanthropy is a collective term for:

“...foundations, corporate funders and other organisations that:

• have their own financial resources which they deploy strategically
• are independently governed
• use private resources for public good

These organisations, which are in myriad forms, are purposefully structured and organised over the long term and bound by structures of accountability, public benefit and public reporting and legal requirements.” (The Philanthropy Europe Association)

How institutionalised philanthropy is failing

Fozia Irfan is a Director at BBC Children in Need. She outlines the sector’s perceived failures in her report Transformative Philanthropy: a manual for social change. 

Failures include:

• paternalism
• a focus on funders’ interests instead of the public good
• a lack of accountability and scrutiny around how and where funding goes 
• not tackling the causes of systemic inequality.

Thankfully, there are funders who are doing the difficult work to address these issues and focus on systemic change. But they don’t get the recognition they deserve. So we’d like to celebrate some of them. 

1. Creating a totally new model: Thirty Percy 

An unconventional family foundation is probably the best way to describe Thirty Percy. It believes that philanthropy can be reshaped. That it can work better both for people who want to make change, and for those who want to use their wealth for social good. 

Since 2019, it’s been experimenting with a new kind of philanthropic giving. One that funds people rather than projects. It gives people involved in social and environmental change the space, time and resource to:

• create alternative systems and visions
• generate new knowledge
• cultivate community.

An example is Thirty Percy’s Changemaker Trust Fund. It focuses on, “...feminine leadership and explicit support of women, trans women, and women of colour.” It provides direct and unrestricted grants of up to £70,000 to people over 2-3 years.

Those who are awarded a grant can use it in the way that works best for them. That might be to:

• take a sabbatical
• carry out an innovative project or research
• scope new initiatives and collaborations
• do some writing.

2. Taking a bottom-up approach to aid: Kwanda

Kwanda is playing a part in decolonialising philanthropy. It collects donations from its members (people of the African diaspora). These are used to fund sustainable development projects across Africa and the Carribean. 

Kwanda exists because people are tired of top-down white saviourism. These models of grant-making:

• prioritise power over, instead of power with, communities
• take a deficit approach to the people they serve. Which means ignoring the knowledge and lived experience of the people they support
• do not treat the people they support with dignity
• impose external solutions
• don’t have transparent finances or decision-making processes.

Kwanda doesn’t make assumptions or suggest how issues can be addressed. Instead it supports solutions that communities have already agreed will meet their needs. This respects local people’s expertise. 

Its commitment to transparency and accountability means it:

• gives members regular financial updates
• displays its financial transactions on an open online ledger
• lists its fixed costs on its website

Its members have access to Kwanda’s founder via an informal WhatsApp group. Members vote on what gets funded, and they can suggest projects to be supported. 

3. Supporting what conventional philanthropy can’t or won’t: The Edge Fund 

The Edge Fund was set up as a participatory grant making fund in 2012. Its founders were people with experience of activism, funding or both. Edge is member-led. It believes that if making funding decisions is dominated by people with wealth and power, systemic change won’t happen.

So the organisation’s values include challenging conventional funding. It says that,

“conventional philanthropy is often dependent on the whims of the wealthy and rarely addresses the root causes of our problems. This needs shaking up!” 

This means Edge chooses to focus on funding work that’s:

• about creating long-term change in society
• led by people with direct lived experience of the issue being addressed
• radical, grassroots and unattractive to mainstream funders
• carried out by groups that aren’t formally registered.

Many charities and not for profits are shying away from being ‘political’. But Edge states its politics on its homepage. It’s clear that it doesn’t want to stay safe, follow the crowd or, “...shy away from political language."

4. Centring people who experience racism and intersectional injustice: The Baobab Foundation

The Baobab Foundation works with grassroots organisations and other funders. Discussions about, and work around, racial injustice is often labelled ‘divisive’. In spite of this, Baobab is explicit about its desire to:

• dismantle systemic racism
• end intersectional injustice
• transform how mainstream funders work with Black and Global Majority communities on racial and disability justice

The organisation gets its funds from trusts and foundations and private businesses, and aims to “... significantly scale resourcing to Black and Global Majority communities in the UK, contributing to wealth redistribution, equitable access, solidarity and sustainability.” 

Baobab is a ‘By and For’ organisation. This means it’s led by Black and Global Majority people. And it’s refreshingly unapologetic about centring these communities in its multi-year funding. Its current fund is specifically for Black and Global Majority organisations and individuals. 

5. Reimagining and rebuilding to support racial, social and economic justice: The Tudor Trust 

2023 was a period of organisational soul-searching for The Tudor Trust. It recognised that established grant-making models contribute to maintaining inequities in the not for profit sector. And in society in general too. It also realised that its legacy structures were based in:

• economic inequality
• systemic racism
• patriarchy.

The Trust wants to have a better understanding of, and better address, structural inequities and injustice. So it decided to move away from being family-led and renewed its trustee board. It’s also carrying out a strategic review. This has involved reimagining and overhauling its:

• governance model
• operational systems 
• internal policies and practices
• grant-making strategy.

The new strategy will be rooted in, “the principles of justice, equity, diversity and inclusion.” And the Trust will be looking to fund organisations that support racial, social, and economic justice. 

As well as embedding systems thinking, it also wants to become an anti-racist organisation. And challenge itself around accessibility and power dynamics. This might involve sharing some of its grant making responsibilities. It might decide to allocate some of its funds to partner or intermediary organisations. These organisations would then distribute them on its behalf.

Resources for funders wanting to fund system change

Ashoka is an organisation that supports social entrepreneurs. It shows how to take a systemic change approach in its Seven steps for funding systems change report. And the School of Systems Change has shared the insights from its work with funders on this topic.