Small and medium nonprofit organisations (NPOs) have the potential to play an important role in informing systems change approaches. Due to the nature of their work, these organisations often possess a deep understanding of the specific needs faced by their communities. In addition, they frequently serve as a crucial link between different stakeholders—governments, businesses, philanthropies, larger nonprofits, and communities. In many cases, small and medium grassroots NPOs also have the flexibility and agility to respond quickly to emerging issues and adapt their strategies as needed.
However, despite the critical role they play, small and medium NPOs commonly face significant challenges that limit their effectiveness. These range from a lack of capacity-building opportunities and inadequate access to funding to several regulatory hurdles. This leaves NPOs with fewer resources to carry out their work, forcing them to explore alternative ways of generating revenue. This may involve engaging in social enterprise activities alongside delivering their core programmes. To understand how NPOs perceive systems thinking, and what needs to change so as to enable them to effectively design, implement, and steer systems change initiatives, AVPN initiated a landscaping study in partnership with Arthan Foundation.
We employed purposive sampling to strategically select participants, with a 2:1 ratio of nonprofit to philanthropic organisations. Data was collected over three months through key informant interviews and roundtable discussions. For the analysis, we applied thematic analysis to the cleaned data, considering factors such as organisational size, strength, budget, location, and focus area.
Based on our interviews with several nonprofits and philanthropies, here’s what emerged about their understanding of systems change.
Nonprofits understand the idea of systems change
NPOs that have adopted a systems thinking lens shared several common principles despite their varying programme areas and experiences. They view systems change as a holistic, long-term process that requires addressing interconnected components and underlying root causes. During the study, these were some key elements necessary for systems change that they highlighted:
1. Adaptive learning: Organisations understood the complexity of systems and the importance of flexibility and adaptability in responding to changing circumstances. This includes adjusting strategies based on ongoing assessments and refining their programmes based on feedback from the system.
2. Solving for the root cause of the issue: Organisations recognised the importance of addressing the root causes of issues rather than just the symptoms to enabling true cultural and behavioural shifts within the system. This involves working on changing underlying attitudes, norms, and practices that contribute to the challenges being addressed.
3. Multidisciplinary approaches: Systems change is often seen as a multidisciplinary endeavour. Organisations acknowledged the need to integrate a variety of approaches, combining advocacy, research, grassroots work, and technology to create comprehensive strategies for transformation.
4. Ethical considerations: Ethical considerations are commonly embedded in organisations’ definitions of systems change. This involves a commitment to social justice and equity, as well as ensuring that interventions do not unintentionally perpetuate harm or inequalities.
5. Long-term vision: Organisations recognised that meaningful systems change requires sustained efforts over time, extending beyond immediate outputs.
6. Collaboration: Recognising the interconnected nature of social initiatives, several NPOs listed collaboration as an important tool for encouraging knowledge exchange, sharing experiences, and fostering innovative approaches towards systems change. This was seen as especially critical for smaller organisations based in remote areas, which typically lack the resources and technical expertise needed to execute systems change but are often involved in the essential aspects of driving change.
Larger NPOs with access to institutional funding and technical expertise could help move these critical pieces by extending co-learning opportunities through collaborative spaces.
According to Santosh More, director at Mantra4Change, “Shadowing emerges as a vital learning tool for smaller NPOs seeking to create systemic change. It becomes a conduit for knowledge exchange, empowering smaller entities to contribute meaningfully to the broader goal of systemic change.”
NPOs shared that collaboration across the sector, and between different actors in the system—such as funders, governments, and businesses—was also an important aspect towards systems change.
However, nonprofits face several challenges in adopting a systems lens
During the course of the study, we found that while NPOs are eager to drive meaningful transformations in the social sector, they frequently encounter significant challenges.
For one, organisations typically need incubating resources such as technical training in terms of routine capacity building, along with technology and tools that allow for the efficient collection, management, and analysis of data. Balancing operational priorities on top of all this can also prove to be difficult. Between conducting essential on-the-ground work, meeting stringent fundraising requirements, and fulfilling mandated communications under FCRA regulations, NPOs are stretched thin.
These operational demands leave nonprofit organisations with limited time and resources to actively participate in thought leadership initiatives and collaborative efforts that could foster systemic change. Here are some other challenges they mentioned.
1. Lack of collaborative platforms
The lack of a unified platform or space within the civil society sector presents a significant obstacle to knowledge sharing, effective advocacy, co-creation, collaboration, and allyship.
“Having a common platform where small and medium NPOs can reach a consensus and have a common voice on concerns that matter in creating systemic changes is the need of the hour,” shared Archana Tripathi, CEO of Saahas.
These collaborative spaces can help promote partnerships between various stakeholders involved in systems change, including the government, civil society, philanthropic organisations, other funders, and community members.
2. Patience scarcity
Systems change is time-intensive, and progress is often unquantifiable in the short term. Impatience from both funding organisations and nonprofits may lead to superficial, unsustainable outcomes, which undermines the need for deep, lasting transformation.
Continuous learning and iteration are also key parts of the systems change process, as are building trust and collaboration with partners—all of this takes time to mature. However, the prevailing emphasis on models and frameworks and an excessive focus on year-end goals within programmatic frameworks impedes the broader objective of driving sustainable change. Balancing short-term wins with a focus on enduring impact requires a strategic mindset shift by both stakeholders.
3. Developing and fostering relationships with the government
Many NPOs mentioned that building and fostering relationships with the government at the outset is crucial for steering systems change, as the government is often the custodian of systems. However, NPOs also shared the challenge of establishing such relationships with bureaucrats.
According to them, the first six months are the most challenging period but can be navigated through constant informal interaction. One nonprofit organisation mentioned that impact should only be measured by the “number of cups of tea“ [had over the course of social visits] rather than any other metrics.
Funders must play a key role in helping NPOs adopt a systems thinking lens
Despite the constraints, NPOs are keen to engage in meaningful conversations and partnerships that have the potential to enhance their impact and drive sustainable change. They emphasise the need for funders to take proactive steps towards listening and understanding their operational realities. Here are some pathways nonprofits suggest for funders to support their systems change efforts.
1. Provide capital support
Funders can support NPOs in adopting systems thinking by providing three types of capital: trust capital to foster collaboration and sustained commitment, patient capital to address the long-term nature of systems change, and risk capital to embrace inherent uncertainties and the potential need for adaptive strategies.
2. Evolve ways to measure impact
Funders can encourage systems change by supporting monitoring and evaluation (M&E), which can help steer overall impact. They can facilitate this by developing metrics that aid systems change activities in programmes. In addition to this, providing financial support to third-party evaluations is another way to support systems change work.
3. Look beyond programmatic funding
There is a persistent tendency among funders to prioritise metrics and numerical indicators over other outcomes. This inclination towards quantifiable outputs often results in an emphasis on programmatic work alone, thereby posing an impediment to systems change initiatives.
It is therefore important that funders look beyond this narrow scope of funding and provide institutional support. This could include investing in organisational capacity building. Funders could support operational and HR activities, such as technical training for the team or translating expertise into languages that communities are conversant in.
Continuous support for NPOs by funders is essential, since it ensures that the team remains adept at addressing evolving challenges.
4. Enable collaboration among their own networks
Funders must develop a shared vision of what systems change means to them, working as a sum of parts rather than as isolated components. One way to achieve this is by having more conversations with other funders and expanding the range of diverse opinions and financing methods.
For example, funders can drive systems change by reshaping the perspectives of those inclined towards programmatic funding. By advocating the need for patience, risk-taking, and trust, while stressing the importance of contextual understanding in driving systemic change, they help nonprofits gain support for large-scale, transformative initiatives. Another step could include assigning champions—designated individuals or teams within funding organisations—who advocate for specific organisations among their broader networks. Doing this would alleviate the burden on NPOs, who would otherwise have to spend the majority of their time keeping new funders abreast of projects and developments.
By facilitating a more supportive environment where NPOs feel heard and supported, funders can play a pivotal role in accelerating progress toward shared goals in the systems change space. Moutushi Sengupta, chief of capital mobilisation at AVPN, echoes this sentiment. “Smaller and medium-sized NPOs are deeply connected to their communities and are uniquely positioned to drive systemic change with agility and local insight. However, they often face significant hurdles that prevent them from doing so in a seamless manner. I feel that it is critical for funders to work in partnership with their grantees, moving beyond just the funding transaction to effectively resolve these constraints.
NPOs must also work on building trust with funders
Nonprofits must work on opening various channels of communication with funders. Beyond periodic engagement through reports, addressing funder concerns is key to building long-term rapport and trust. This can be achieved by accommodating feedback mechanisms, providing candid and transparent updates to donors, and prioritising trust through both formal and informal communication channels. Here’s what this could include.
- Building M&E competency: Robust M&E processes ensure accountability and transparency. This is important for funders, because an enhanced evaluation capability allows them to more confidently assess the effectiveness of their investments and make informed decisions.
- Periodic engagement: One of the most important things that NPOs must do is managing donor expectations through periodic engagement. While quarterly reports and impact evaluations are important tools, so are qualitative inputs, which can be done informally. Often, donors are unaware of the working realities of projects. NPOs should make it a practice to be transparent with funders through routine interactions.
Moving from scattered efforts to unified action is critical, especially for nonprofits and funders to come together, bridge gaps, and focus on long-term outcomes rather than quick fixes. By building strong partnerships and embracing new ideas, we can tackle challenges effectively and drive lasting changes in society.
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