Systems change remains a hot topic in the social sector. For good reason. The complexity of the challenges we face today is hard to grasp—from homelessness and poverty to climate change and the refugee crisis. So many charities and funders are looking at how they can transform systems to create sustainable change rather than providing short-term ‘Band-Aid solutions’.

But how can funders understand their role in systems change? And how can they support grantees that are working towards it?

Over the past few months, NPC has been working with Lankelly Chase, an ambitious funder with a mission to change systems that perpetuate severe and multiple disadvantage.

We’re exploring how theory of change—a practice widely used by charities and funders to help focus their activities—can help guide systems change.

Here I outline three key messages for funders looking to support systems change, and encouraging the use of theory of change in this pursuit:

1.) Look to yourself
As a funder looking to create change, it is important to consider how your own behaviour affects the wider systems in which you operate. Increasing your self awareness enables you to better understand the impact your behaviour has on grantees, the wider sector and the individuals you seek to serve.

This process of self-reflection can begin with asking yourselves simple questions. While potentially uncomfortable, these questions will lead to honest conversations that critique your funding practices, acknowledge your limitations and promote progress:

• Are you acting in a way which encourages positive change for the individuals you seek to serve?
• Are your requests of your grantees realistic? For example, is there a reason for each report/piece of data you ask for?
• Are you enabling your grantees to learn and adapt?

All too often funders see theory of change as a requirement but fail to utilise it. If you ask or expect your grantees to have a theory of change for their work you should be clear about why you require it and how you will use it to support and promote the changes you wish to see.

To enable your grantees to focus on increasing impact, reflect on your own role within the system and change your practice to promote theory of change as a tool for learning and improvement (as well as strategy and evaluation).

2.) Practice flexibility and agility
Systems change involves looking at social problems in a curious way, and learning and adapting to create change. To accommodate this, your funding practices should be flexible, agile and open to change.

Some funding practices (eg, short-term or restricted funding) inhibit adaption, and should be avoided in the context of systems change. Instead, you can support grantees to cope with complexity and uncertainty by being flexible and patient in the way you fund. As a funder, the type of questions you should be asking yourself here include:

• Are you appreciating the complicated and uncertain landscape in which your grantees work?
• Do you regularly review activities, outcomes and perceived impact?
• Are you approachable and open to change?

Some of the social sector view theory of change as an inflexible tool which sets outcomes in stone and holds people to account. But, as an approach, theory of change can embrace complexity and evolve with changes in the wider environment (see Hivos’ 2015 guide Theory of change thinking in practice).

As funders, you can encourage an agile use of theory of change by viewing it as a flexible learning tool to test approaches. Regularly reviewing and amending activities, outcomes and impact with your grantees can foster learning and increase understanding of how change happens.

3.) Recognise the importance of relationships
Change is fundamentally driven by people who make decisions. And decisions are based on multiple factors, including incentives, perceptions, trusted relationships and networks of influence.

As a funder, you can build trusted relationships and encourage a more coordinated approach to change. Address these questions collaboratively with your grantees:

• What is your shared purpose/goal(s)?
• How can you support each other to facilitate change?
• Who else do you need to be forming relationships with to achieve change?

Both theory of change and systems change are disciplines that challenge people to: reflect on how change happens, learn and improve practice. Funders can play a critical role in this by practicing self-reflection and flexibility, and by building trusted relationships. These are just some of the steps that can help us work together as a sector and drive greater impact.

In the coming months we hope to share more insights from this piece of work (via the NPC website), but in the meantime we welcome your thoughts on this topic. Please do get in touch (@RThomasoo).

Rosanna Thomasoo is a Consultant with New Philanthropy Capital (NPC).