Funding for systems change

More and more funders are turning their ambitions to systems change, a shift which requires funders to look and act differently. For some, this marks a big departure. Traditional funding practices have often actively undermined systems change—short-term funding and highly restrictive grants impede organisations’ ability to adapt and respond, collaborate, and consider their wider role in the system. Funding for systems change means not only funding different things, but funding differently.

In this blog, I’ve set out some of the key features that NPC sees systems change funders adopting.

First though, what do we mean by systems change?

At its core, systems change is about shifting the underlying conditions that keep problems in place. Rather than focusing solely on individual organisations or interventions, it seeks to address the root causes of an issue, and the wider policies, structures and mindsets that cause issues to persist.

What does funding for systems change look like?

1. Thinking, learning and acting collaboratively

Collective action is at the heart of systems work. Systems funders don’t act alone but should be part of a group working towards the same changes. Collaboration can happen at many levels – be it mapping the system collectively, defining strategies in tandem, pooling and distributing funds, or evaluating and learning together. Relationships underpin collaboration: this means building trust with grant-holders, as well as creating connections with other actors in the system, like local authorities or businesses.

2. Building a deep understanding

Systems change demands an understanding of the system itself. This systems analysis can involve mapping the system, or delving into data on resources and flows. It means listening to diverse perspectives and voices, and bringing others into the process to establish a shared understanding. Systems practice also asks funders to bring deeper reflection to an issue, to examine underlying structures and the relationships which help inform where and how we can act to make a difference. Tools like the iceberg model can help address key questions, like whether funders should lead with a place focus, or take a national or international lens.

3. Funding flexibly and responsively

Traditional project-based funding models can constrain systemic work. Unrestricted funding and long-term grants should be the default; they give organisations the flexibility and stability to adapt and focus on their missions. Yet systems funders can also offer rapid project funding to make the most of emerging opportunities. Or they can offer restricted funding to bring in organisations working in different spheres, in order to build a wider church or movement. Funders should balance the stability they can offer within a system, with the ability to be responsive and act fast.

4. Supporting different kinds of work

The ‘six conditions’ of systems change provides a useful model to explore how funding should flow differently when addressing the causes rather than symptoms of social issues. This could mean supporting relationships and connections within a field, challenging power dynamics by bringing different voices to the fore, or trying to shift not only policies and practice, but the narratives and mental models which hold problems in place; see for example JRF’s Storytellers Fund.

5. Being open and engaged

Funders are not neutral observers. They are active participants within the system, with power and influence, holding not only financial resources but knowledge, learning and networks. Funding systems change means bringing all these assets to bear. Where many funders have instinctively stepped away from having voice and being transparent, this means working in the open, sharing what you’re doing and why, as well as what’s being learnt. It also means using this learning to convene and inform collective decision-making.

6. Taking on risk

Much systems change work is hard to evidence and impossible to attribute. More than this, its outcomes are highly uncertain. Funding systems change therefore means not only accepting risk but actively taking risks, without which meaningful change is unlikely. This also means a shift in monitoring and reporting practices, moving away from an accountability lens towards learning and adaptation-focused evaluation, a change which requires trusting relationships with grant-holders.

7. Committing for the long-term

Systems change is inherently slow. While shifts can happen quickly, they are likely to require long-term commitment and sustained investment to see the change you want. This means retaining a deep focus.

What’s next?

Many funders are already doing this work. At Ignites 2026, we’ll be facilitating a discussion exploring what this work looks like in practice – come join us. We’re also convening our systems change peer network for those wanting to meet with others grappling with systems work in their day to day.

Finally, join our next Systems Change Community of Practice event on 8th September!