Chapter 6: Systems Thinking in Philanthropy and Innovation
Posted December 13, 2024 - Linh Bui
Philanthropy and innovation are crucial drivers of social change. But in a world marked by complexity and interconnected challenges, how can systems thinking enhance their impact? Insights from two thought-provoking sessions at the 2024 Banff Systems Summit—"Making an Impact in Complexity: Systems-Led Philanthropy" and "The Missing Piece of the Puzzle in Innovation: Systems Thinking"—illustrate the transformative potential of adopting a systems lens.
Image description: A systems mapping activity led by Lena Haley-Soots and Amy Rintoul.
Systems Thinking in Philanthropy: A Collective and Humble Approach
Philanthropy has often been criticized for perpetuating the status quo, yet it holds immense potential as a catalyst for systemic change. At the “Making an Impact in Complexity: Systems-Led Philanthropy” session, four facilitators in Canadian philanthropy Allison Schulz (Calgary Foundation), Kelli Stevens (Suncor Energy Foundation), Justin Wiebe (Mastercard Foundation), and Teresa Marques (Rideau Hall Foundation) explored how systems thinking can shape a more thoughtful, collaborative, and impactful approach to funding. Their insights emphasize humility, partnership, and intentionality as the cornerstones of a new philanthropic paradigm.
Image Description: From left to right, Kelli Stevens (Suncor Energy Foundation), Allison Schulz (Calgary Foundation), Justin Wiebe (Mastercard Foundation) and Teresa Marques (Rideau Hall Foundation.
Reframing Philanthropy's Role
Kelli Stevens of the Suncor Energy Foundation reflected on the traditional model of philanthropy, likening it to pulling people out of a river without questioning why they are falling in. “It’s important to convene and intentionally analyze the issues before putting resources into action,” she emphasized. This upstream approach acknowledges the complexity of societal challenges and avoids short-term fixes that fail to address root causes.
Justin Wiebe from the Mastercard Foundation echoed this sentiment, highlighting that traditional philanthropy often reinforces the status quo. To counteract this, he argued for diversifying decision-making processes. “We need to transform who decides where the money goes, and how,” Justin shared. By incorporating diverse perspectives, philanthropy can become more attuned to the lived experiences of those it seeks to support.
Humility and Partnership
Humility emerged as a recurring theme. Stevens urged funders to recognize their limitations: “We don’t have all the answers. Listening to communities and practicing responsible, iterative partnerships are critical to driving change.” This shift in mindset positions funders as collaborators rather than saviors, dismantling traditional power dynamics.
Teresa Marques of the Rideau Hall Foundation added, “As funders, we get suspicious when someone claims they can solve a problem alone. Systems change requires collective effort from philanthropy, government, and other sectors.” Marques underscored the importance of understanding individual roles within the broader system, ensuring that contributions align with collective goals.
“It’s important to convene and intentionally analyze the issues before putting resources into action” - Kelli Stevens
Balancing Flexibility and Accountability
For Allison Schulz of the Calgary Foundation, systems-led philanthropy requires recognizing that change is neither linear nor always quantifiable. “There are not always specific results that funding is looking for,” she noted. Instead, funders should embrace a multi-faceted approach that includes diverse tools, initiatives, and long-term support.
Yet, this flexibility must be balanced with accountability. Justin acknowledged the challenges of impact reporting: “It takes time, but it’s essential to co-create evaluations with communities to ensure realistic capacity and meaningful outcomes.”
Philanthropy as a Convener
Philanthropic organizations can also act as conveners, creating space for collaboration and innovation. Wiebe pointed out that foundations are uniquely positioned to leverage community knowledge and foster dialogue. However, he cautioned against assuming the role of social planners: “Advocating is tricky. We need to convene in ways that give more space to activists and those directly impacted.”
Schulz expanded on this, stressing the importance of dismantling power hierarchies within funding relationships. She advocated for viewing grantees as partners, not mere recipients. “Power comes from representing the community,” she stated, emphasizing the need to amplify voices that have historically been excluded from decision-making processes.
Transforming Capital for Systems Change
Finally, the speakers explored innovative ways to leverage philanthropic capital. From impact loans to social entrepreneurship support, foundations are finding new avenues to drive systemic change. As Marques aptly put it, “Just spending the money will not solve problems. Without constraints, new constraints are created.” This highlights the importance of intentionality in how resources are deployed.
“We need to transform who decides where the money goes, and how” - Justin Wiebe
Systems Thinking: The Missing Piece in Innovation
Innovation often thrives on bold solutions, but it can falter by overlooking the complexities of the problem space. Facilitators from the session on innovation—including Diana Grant-Richmond (Mount Royal University), Jerome Morgan (Innovate Calgary), Kurt White (University of Calgary), Andrea Klaiber-Langen (ATCO Ltd.), and Nick Gregg (Oxford University)—explored how systems thinking fills this gap.
Table Description: From left to right, Matt Knox (Government of Alberta), Jerome Morgan (Innovate Calgary), Diana Grant-Richmond (Mount Royal University), Kurt White (University of Calgary), Nick Gregg (Oxford University), and Andrea Klaiber-Langen (ATCO Ltd.)
Falling in Love with Problems
Andrea Klaiber-Langen from ATCO Ltd. effectively highlighted the importance of systems thinking in the realm of innovation with her insight: “Fall in love with the problems, not the solutions.” This perspective encourages a deeper exploration of the complexities surrounding an issue instead of hastily implementing ideas. By mapping out the stakeholders, documenting processes, and being receptive to feedback, innovators can prevent the mistake of applying solutions that aren't suitable for the context. Andrea pointed out that “self-justifying solution-seeking undermines the natural learning process.”
This mindset calls for humility and adaptability—qualities that Diana Grant-Richmond from Mount Royal University considers vital for new innovators. She remarked, “Students are action-oriented but scared. They often leap into research without hesitation.” It's essential to strike a balance between thorough analysis and the bravery to engage with stakeholders and experiment in order to overcome what she refers to as “innovation paralysis.”
Self-justifying solution-seeking undermines the natural learning process - Andrea Klaiber-Langen
Balancing Learning and Doing
Diana Grant-Richmond from Mount Royal University observed a common challenge among students and early innovators: “They are action-oriented but terrified. They reflexively dive into research.” While analysis is essential, systems thinking highlights the need to balance learning with doing. Innovation paralysis—the fear of getting it wrong—can often be overcome by engaging stakeholders early and iterating ideas through experimentation.
Kurt White and Andrea Klaiber-Langen stressed the value of breaking down challenges into manageable experiments. "Start to break down what you want to know into tests and into actions [so] that you’re not in paralysis, this will help decrease the tension [between doing and learning." By running small tests, innovators can explore new ideas, assess their feasibility, and iterate on them. This hands-on approach encourages outside-the-box thinking by focusing on actionable insights rather than overanalyzing.
“Experience is key, and meaningful reflection ensures that learning is applied throughout the process,” added Nick Gregg from Oxford University’s Skoll Centre. Systems thinking reframes the innovation process as a cycle of action and reflection, allowing innovators to learn from failure and refine their approaches. Redefining success to include learning as a key outcome ensures that innovation contributes to the broader ecosystem.
Start to break down what you want to know into tests and into actions [so] that you’re not in paralysis, this will help decrease the tension [between doing and learning - Kurt White and Andrea Klaiber-Langen
Systems Approach to Innovation
Kurt White from the University of Calgary aptly describes the entrepreneurial journey as “business on hard mode.” He described how systems thinking provides a “foundational tool” for navigating the complexities of entrepreneurship and innovation. Without it, innovators risk being overwhelmed by the interconnected forces that shape the systems they’re trying to change.
Jerome Morgan of Innovate Calgary emphasized the importance of understanding feedback loops and ripple effects. “Systems can snap back,” he cautioned, referring to the resilience of existing systems to resist change. Systems thinking equips innovators to anticipate these dynamics and adapt their strategies accordingly.
The panel further explored how systems thinking reshapes our definition of success. Historically, innovation success has focused on tangible outcomes, like product launches or revenue generation. However, Jerome advocates for the inclusion of learning as a vital success metric. He remarks, “What you’re learning in the marketplace can be shared with other founders to strengthen the ecosystem.” Andrea shared her team's unique method, which mandates that innovators document their learnings and team dynamics in progress reports. She explained, “This creates a knowledge advantage,” allowing others to leverage past experiences instead of starting from scratch.
A collaborative approach
Innovation driven by systems thinking is inherently collaborative. Diana noted the importance of assembling diverse teams and engaging the right stakeholders at the right time. “Mapping out values and building relationships is critical,” she said. This approach ensures that solutions are not only innovative but also ethical and community-centred.
For Jerome Morgan, the collaborative aspect of systems thinking also extends to equity. “We need to make sure those traditionally excluded from the economy are part of conversations about innovation,” he stated. By incorporating diverse perspectives, systems thinking aligns innovation with broader economic equality and social impact goals.
The facilitators also discussed broadening the focus from the head to the body can also fuel creativity and build stronger collaborative dynamics. Activities that engage the body—such as movement, storytelling, or artistic expression—allow teams to access new ways of thinking and problem-solving. This embodied approach to collaboration taps into creativity that often remains dormant in traditional, cerebral-only methods. When combined with systems thinking, these practices inspire innovative breakthroughs and deepen team cohesion.
The Interplay of Philanthropy and Innovation
Philanthropy and innovation are two sides of the same coin. Together, they hold the potential to solve the world’s toughest challenges
As Andrea aptly put it, “Innovation is the pursuit of sustainable new values, and systems thinking is critical to that pursuit.” By embracing this approach, innovators can navigate complexity, align their efforts with long-term goals, and redefine what success looks like.
Systems thinking unites philanthropy and innovation by providing tools to navigate complexity in their often non-linear journey, prioritize collaboration, and embrace learning. Whether convening stakeholders, rethinking power dynamics, or embedding iterative reflection, a systems lens enhances the ability to create meaningful and sustainable change.
As funders and innovators alike move forward, adopting a systems mindset will be critical to addressing the interconnected social, economic, and environmental challenges of our time.
Resources mentioned in the sessions
- The Five Principles of Effectuation
- Chindogu: The Art of Un-useless Inventions | HowStuffWorks
- Systems thinking: a cautionary tale (cats in Borneo)
Next up Chapter 7: The Nexus of Peace Building, Learning and Systems
Systems-led approaches can help depolarize and illuminate interests, values, and mental models that lie beneath the surface. This session explores the nexus of peacebuilding, learning, and systems.
Previous Chapter 5: Learning from and with the Systems
Stepping into a vast landscape where every step, breath, and observation becomes a lesson in connection, this was the summit's exploration of systems thinking, where we learn about the systems from and with the land, its wisdom, the complexity of human relationships, and the invisible forces that shape our world. All to be realized are dynamics that govern our collective existence.