Evolving and Adapting – Funding Systems Change in a Changing System
Image by waverider22 from Pixabay
When the Peter McKenzie Project (PMP) was first conceived in 2011, it emerged from particular moment in time.
Despite the near collapse of the global financial system in 2008, neo-liberal free market policies remained economic orthodoxy. Economic growth was assumed to reduce poverty. Yet in Aotearoa New Zealand, poverty and the gap between the rich and the poor had been rising for decades following welfare and labour market reforms of the 1980s and 1990s.
At the same time, systems thinking was only beginning to gain traction in social change practice in Aotearoa. While mātauranga Maori has always embedded a systemic world view – grounded in whakapapa, relational accountability and the interdependence of social, ecological and economic wellbeing – these orientations were not well understood or supported by government or philanthropic funders. Short term funding, contestable processes and programmatic and siloed delivery and accountability were the norm.
It was into this context that Peter McKenzie set out a bold vision: a focused, long-term investment that could demonstrate observable impact. His early idea was for a single, tightly scoped project, funded at around $1 million per year for 20 years.
But translating that vision into reality proved far more complex than anticipated.
From a Single Project to Five “Big Ideas”
Between 2012 and 2015, a trustee working group wrestled with key design questions. The first was choosing an issue or challenge to be the focus. During this period, child poverty was gaining national attention. Academic reports were being released, news stories about empty fridges and families sleeping in cars were common, NGOs were increasingly coordinated and the Children’s Commissioners were outspoken.
It was clear that something was structurally wrong – and that there was growing momentum for change.
Having settled on child poverty, the working group grappled with understanding the most effective way to meet this challenge. Rather than focussing a single intervention, should PMP “pick winners” amongst existing programmes? Should it fund a backbone organisation to build collaboration? Should it fund a social marketing campaign? Each option was considered and eventually discarded.
Finally, the working group decided to:
fund five “big ideas” to reduce child poverty (focussed on prevention and inequality)
run a contestable process to find these ideas
appoint a committee of experts to make funding decisions, and provide ongoing support and oversight.
It was only once the committee had been formed that “systems change” became central to PMP’s approach. By the time a call for ideas was released in 2017, it clearly stated that this was not funding for programmes reaching individual families. Instead the focus was on working towards long-term shifts in the systems shaping family income—tax, benefits, wages, access to decent work and capital—and the features of systems that make a poverty-free life harder for some groups than others.
However, of 259 ideas received in response to the call, most were programme-based. Perhaps unsurprisingly, there was no large, ready-made pool of systems change initiatives waiting to be funded.
This was a pivotal learning moment.
Systems change initiatives do not emerge fully formed in response to funding rounds. They grow from relationships, social change infrastructure and leadership and long term capability. If PMP wanted to fund systems change, it would need to help cultivate the ecosystem that makes it possible.
An Enabling Political Context
As PMP began distributing funds, the political environment shifted. The 2017 election of a Labour-led government created new possibilities. A broad cross-party consensus (with one exception) supported the passage of the 2018 Child Poverty Reduction Act. The Prime Minister took on the Child Poverty Reduction portfolio; targets were legislated and benefit levels were increased.
There was genuine optimism that transformational change might be possible.
An Evolving Funding Approach
Expanding from the initial constraint of five ‘big ideas’, between 2018 and 2026, PMP funded twelve organisations working on different aspects of the child poverty challenge. Workshops, capacity building and connection were also supported. A participatory approach to strategy and governance was developed. In 2020 PMP clarified its purpose as “supporting a collective of organisations leading collaborative, impactful and sustainable change to reshape the systems that hold whānau in poverty”.
Headwinds and Hard Realities
Between 2018-2022 important changes were made within existing tax and welfare systems and thousands of children were lifted out of poverty between 2018-2022. Yet the deeper economic structures that generated poverty remained largely intact. Housing speculation, wealth concentration, low wages and structural inequities were not fundamentally shifted.
When the government changed in 2023, many earlier gains were diluted or reversed. Recent reports on child poverty show little progress. Despite the current government saying that reducing child poverty is a priority, they are mostly relying on the current economic paradigm (via economic growth and increased employment) to deliver this impact.
This has been sobering for PMP. It has also sharpened our understanding of what is required for durable systems change. Influencing government policy is important but not sufficient. Policy wins alone are fragile without deeper shifts in public narratives, political consensus and economic paradigms. The “war of ideas” is long-term and well-resourced, and those who benefit from the status quo invest heavily in protecting it.
A growing global movement for economic systems change
Today, while many governments around the world are ‘doubling down’ on austerity and neo-liberal economic and social policies, we also see a growing global movement calling for different responses. A new tide of economic thinkers, advocates and funders are raising awareness that the current economic paradigm will not provide solutions for the social and ecological crises now facing us. Some argue that rebalancing our economic system to prevent the extremes of wealth inequality we are currently experiencing is the answer. Others suggest that unless our current system is replaced with one that recognises the ecological limits to economic growth, increasing poverty and hardship are the future for the majority of the world’s population.
What PMP Is Focusing on Now
The context is very different now from when PMP was first conceived. But the need for systemic responses to poverty, inequality and the multiple connected challenges of our world is clearer than ever. Our original aspiration, to fund differently and to support change at a systemic level, remains. But it now sits alongside a clearer understanding of the limits, tensions, and challenges involved.
As PMP enters the final phase of its spend down, we’re asking “What’s realistic and impactful in the current context?”. These areas have come into sharper focus:
Strengthening systems change infrastructure.
Effective systems change requires institutions, leadership pathways and support structures. Much of this ecosystem remains fragile. PMP has contributed to building it; but there is still work to be done in consolidating and strengthening it further.
Deepening sophistication about systems change practice.
Systems change is not neutral. It involves power, interests and resistance. It is also emergent, rather than linear. Supporting continuous learning and reflective practice is an important role that PMP continues to play.
Building resilience for the long haul.
Leaders and organisations working for change face exhaustion and opposition. Supporting their sustainability and connection is as important as funding specific projects.
To enable this, we’ve committed our remaining funds to supporting the eight members of our current flotilla in their individual organisational mahi, emergent collaborative initiatives and ongoing relationships.
As PMP draws to a close, we’re also offering our learning insights as a contribution to others navigating the complexity of systems-focused funding.
A decade of experimentation has reinforced some central lessons:
Sustainable systems change is slower than traditional philanthropic cycles, more political than technical and more relational than programmatic. It can not be secured by proximity to a sympathetic government, nor supported by a single funder. It requires aligned movements, resilient institutions, narrative shifts and changes in collective imagination.
