Can Funders do Systems change? Learning From Supporting the New Economy

By Fiona Ward

Clearly funders are an essential part of the work to bring about deep-rooted systemic change, and they wield great influence. Is this power wielded well today?

On behalf of a small international foundation, we recently spoke to 25 organisations and individuals who are actively trying to transform our economic system into something more sustainable, equitable and life-supporting. Working at the global, European or national level, they all rely heavily or exclusively on funding. Our interviewees were based in the UK, the USA and some countries in Western Europe.

Our conversations uncovered some common themes around the best leverage points for funding attention, as well as some food for thought for the foundations and other funders.

The majority see their work as only part of a wider change, recognising that the problems we face today – climate change, inequality, biodiversity loss, financial instability, food and water scarcity and so on – are the result of complicated interaction and feedback loops between different parts of a highly complex, at times seemingly unknowable system.

They generally understand that solutions can only be found with a wider awareness of the whole system, and using a different approach, i.e. systems thinking, which is way of thinking, a language and a toolset that emphasises relationships and context.


Handmade Bakery, Slaithwaite – examples of New Economy enterprises

A great (albeit fledgling) foundation is being laid

Overall there was general agreement that we already have a good range of innovative local enterprises and projects demonstrating viable New Economy models, many but not all thanks to funding support. The majority of these are highly replicable and provide solutions at the local or city level that address social and environmental concerns, while being financially viable.

However, these individual pioneer enterprises and projects now need to (a) collaborate and cooperate locally to create a New Economy ecosystem in a place, and (b) significantly replicate around the country/countries, moving from niche demo projects to become embedded in high streets, industrial estates and farmland everywhere.

For this to happen, and for the New Economy to become a viable alternative, a number of things are needed (our study does not provide an exhaustive list of all these things, but is a reflection of the priorities of the participants at that point in time, and with a strong UK bias). Here we have framed these emerging themes as questions asked from the funders’ perspective.

Can funders let go of the desire to work at the innovative project edge, and instead focus support on the (seemingly) more mundane relationship building?

An urgent need at local level is now around supporting key web-makers, not just individual projects or enterprises. Given that a good number of new enterprise and infrastructure models exist, where a concentration of these are in a single place, the next step is to build connections to form a local New Economy ecosystem or cluster. This ‘weaving’ role does essential, time consuming yet somehow invisible work that builds the essential basis of trust, connection and shared understanding.

At a higher level, work at the regional/city level is increasingly important and will help enable the local work to succeed – a similar need exists here to resource these key roles that enable actions and collaborations for influence.


Funding of events and networks and relationship-building is increasingly important

And at all levels, horizontally and vertically, networking is essential. We need to build a critical mass that can bring about significant change, and this requires cooperation and collaboration in all parts of the New Economy territory. Taking the time to form good relationships and a sense of community throughout the system is essential.

Another issue here is the funders’ common preference for funding projects, rather than the organisations themselves. The general aversion to covering core costs to any significant extent, for example, makes it difficult for new organisations, especially networks, to emerge and build capacity which is a prerequisite to good projects. On the other hand it’s hard to see how funders could be expected to support new organisations before they’ve somehow proved themselves. Are there ways to balance meeting the needs of both funders and grantees, especially of new collaborations (and of course core costs of organisations with proven potential)?

How can funders help with writing up this already engaging story, then telling it well?

As already noted, the grassroots projects and enterprises are generally flourishing and this demonstrates the potential of people and communities in an amazing way. However these numbers remain small and a drop in the ocean compared with the massive scale and inertia of the current system. The prevailing public narrative is still about growth, profit and competition.

Although opinions on the ‘best’ approach to communications varied widely in our interviewees, there’s widespread agreement that we now need to make the niche working models and exemplars much more visible. In particular, to share stories of where these are all working together in one place (this reflects the earlier point about the need to support more local place-based integrated solutions, rather than focus on niche activity here and there).


Demain – the first mainstream film showing positive solutions? Seen by thousands in cinemas across Europe

Then, the question is how do we best use current mainstream media, internet tools and understanding of today’s communications to get our messages articulated, aired and promoted? Who has the skills to do this? What can we learn from the mainstream master communicators and story tellers?

Once interest is stimulated, the movement as a whole needs to be ready to respond, for example, with easy to download ‘blueprints’ or actions for different parts of the New Economy that are available to mass audiences, and to provide the means and platforms for more voices to be heard.

How well do funders value and support the work in other parts of the system, even if it doesn’t (at first glance) align with their own purpose?

To apply systems thinking, at a gross level we need to ensure that environmental, social and economic needs and limits are understood, balanced and met. For example, do funders who focus on social justice also have the responsibility to understand the interaction with nature and the environment (rather than dismiss these areas as specialised or peripheral, as was seen in one situation)? Is there widespread agreement that there’s an environmental dimension to every social challenge? And whose responsibility is it then to ensure, for example, that there’s a balance of funding on offer – without which the social justice work may not ultimately succeed?

It was suggested that funders could themselves work together more to enable their grantees and other organisations to access other funding pools. For example, the EU funding schemes are rich but complex and time consuming for small organisations – funders’ resources could be used to help build capacity across the movement that enables more prudent deployment of such funds.


Another way of putting it? That we need to always consider together “earth care, people care, fair shares”.

Many of these schemes require cross-country participation yet transnational funders are rare. EU requirements for match funding are another major barrier for many organisations; could funders could create a shared ‘systems change’ match pool for such a purpose?

How do we all avoid unconsciously replicating the shadow side of the current systems?

It’s generally seen, especially in the UK, that most of the New Economy field’s leadership and public/expert roles are held by men and our research has also seen this bias reflected. We know that our culture tends to attach a lesser value to roles, attributes and behaviours which have been traditionally aligned to the feminine, than to those typically viewed as masculine (and of course, both men and women have the capacity to inhabit either).

But if we don’t ensure our new systems are more balanced from the outset at every level, especially the leadership, then we are simply re-creating some fundamental flaws of the current paradigm that are not only massively unjust, but which ensure everyone suffers from a society bereft of qualities including connection, inclusion, compassion, love and nurture.

There is of course growing understanding of these issues across much of our movement, particularly perhaps where younger people are involved, and some good work is being done in several organisations and networks to address them. However this remains an urgent and pressing issue overall.

Clearly there are other highly connected issues including class, race, diversity, privilege and access to power that need to be addressed in our New Economy (some organisations and networks feel they are already trying to do some of this).


The Schumacher Institute provides some free online training in systems thinking

How well do funders define and live their values?

Another challenge to some funders is for them to be clearer on their values – and then to be aware of whether these are reflected both in the choice of organisations that are funded, as well as in the internal processes of determining grantees and managing grants. Clearly funders have a lot of power to influence outcomes – are they self-aware enough around their own power and privilege issues for example, at board level?

We need to find a way to encourage respectful, robust, healthy debate and shared understanding, and address all these complex intertwined issues of oppression over time. Skilled facilitation, and finding the right language and terminology, are essential. So what’s the role of our pioneer organisations, networks and funders as leaders in acknowledging and addressing our shadow side?

Systems change is risky and uncertain – can funders work with this?

Perhaps the strongest message for many funders, though, is a challenge to their seemingly paradoxical desire to fund the exciting, the new and the innovative (as already mentioned above) – but at the same time leaning towards those activities and projects that are still relatively low-risk and where outcomes can be predicted with some certainty.

This finding is supported by a recent blog for the Environmental Funders Network that reports 68% of grantees think that funders should take more risks, and that over a third of grantees pretend what they do is innovative even when it isn’t.

The themes that have emerged from our conversations show that the priority areas are now around resourcing local and regional web-builders; supporting and building networks that embed good practice including gender balance and care with power; and communications-based activity around a new narrative.

This is not necessarily new or sexy, and the outcomes cannot easily be determined or attributed to specific interventions – systems change is complex, messy and uncertain – but these are essential underpinnings for our New Economy movement according to some of those working in the trenches.

Supporting it may require funders to question how they evaluate success – when is the outcome predictable enough to be the basis of ‘regular’ evaluation, and on the other hand, where the path to success is not clear, what other methods, such as ‘developmental evaluation’, might be more appropriate?

Questions not answers

Our study raised a number of interesting questions which were recently presented and discussed at the annual conference of Edge Funders Alliance – Europe, a group of progressive foundations and funders. This group is working on: a shared idea and vision of a just transition for systemic change; an inter-sectional approach, within a local, national, regional and global context; and with a focus on the importance of grassroots organising.

We hope such questions and feedback continue to inform conversations and strategies in this essential and powerful part of the system.


With many thanks to the following people for sharing their thoughts and insights about the New Economy field in general:

Jonathan Dawson, Schumacher College; Tony Greenham, RSA; Leslie Harroun, Partners for a New Economy; Tom Henfrey, Transition Research Network; Nicolas Krausz, FPH Foundation; Rachel Lawrence, nef; Karen Leach, Localise West Midlands; Peter Lipman, Transition Network; Carina Millstone, Frugal Value; Helena Norberg-Hodge, Local Futures; Frances Northrop, Totnes Community Development Society; Molly Scott Cato, Green Party MEP; Tobias Troll, EDGE Funders Alliance Europe

And also about their organisations in particular:

ECOLISE – Sarah McAdam, Eamon O’Hara; Smart CSOs Lab – Micha Narberhaus; Global Hub for Common Good – Diego Isabel La Moneda; NEON – Dan Vockins; Guild of Independent Currencies/Bristol Pound – Ciaran Mundy; Positive Money – Fran Boait; Economy for the Common Good – Christian Felber; Schumacher Institute – Tom Henfrey & Ian Roderick; STIR – Jonny Gordon-Farleigh; Simplicity Institute – Sam Alexander; Network of Wellbeing – Roger Higman; Real Economy Lab – Jules Peck.

For a copy of the full report please contact the author Fiona Ward at

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