Philanthropic Foundation Strategies to Advance Systems Reform: Perceptions from Frontline Change Implementers

Introduction

Systems change is a concept that has garnered much attention in the philanthropic community over the past decade or so (Ferris and Williams 2010; Sandfort 2008; Mandeville 2007; Ferris 2009). While philanthropic and community organizations have always focused on improving society in local environments, a number of recent large-scale initiatives have involved vanguard philanthropic foundations coming into existing public systems to catalyze change (Reckhow 2012; Johnson et al. 2012; Ferris and Williams 2010; Ferris and Harmssen 2009). Foundations take two main approaches to this work: either they partner with influential actors within the system to gain entrée and credibility, or they simply provide resources to encourage a public system to act in particular ways.

As policy actors, philanthropic institutions have a long history of attempting to tackle social problems (Hall 2006). The literature on the role philanthropic foundations play in public sector reform has broadly focused on how foundations take on public policy roles at the state and local level (Mosley and Galaskiewicz 2015; Tompkins-Stange 2016; Reckhow 2012; Bushouse 2009). Recent literature in the field of education policy has documented the underlying strategies and processes by which philanthropic foundations engage public institutions in policy reform (Tompkins-Stange 2016; Quinn, Tompkins-Stange, and Meyerson 2014). However, it is unclear if these strategies occur in other policy fields and organizational contexts. Moreover, foundation efforts to catalyze and support systems reform in an effort to create lasting social change has received limited attention (Ferris and Williams 2010).

Often, the pressing social problems being targeted by systems change efforts are those that involve individuals with multifaceted service needs due to comorbid health, employment, and social challenges. Programs serving clients with these kinds of complexities regularly attempt to coordinate client packages to improve uptake, sustainability, and long term outcomes. Thus, change efforts in these service systems require adjustment that is not confined to one organization, but rather require modification to policies and practices that span across organizations. For philanthropic foundations attempting to effect change in these systems, pursuing adaptive strategies that emphasize “multi-faceted approaches and building the capacity of institutions” (Tompkins-Stange 2016, 99) are necessary. These field building, system level activities encompass a broader set of actions and a deeper level of engagement with public organizations than other foundation strategies focused more narrowly on supporting specific programs (Tompkins-Stange 2016).

Our work contributes to building the field’s understanding of the role philanthropic foundations play in system level change efforts in public institutions. We examine the role of one large Foundation’s effort to facilitate change in juvenile justice systems across four states. In particular, we explore the perceptions of system professionals, and their understanding of the role the Foundation played in systems change efforts. While recent scholarship has identified the goals and strategies of philanthropic foundations in policy reform from the perspective of foundation leaders and foundation program staff, our focus here is on better understanding how system actors perceive the work of foundations in policy reform. This is important because if philanthropic foundations are attempting to act as “field builders”, it is vital to understand the perspectives of those in the field about their efforts. Our findings reveal four specific strategies pursued by the Foundation: partnering with state policy actors to accelerate systems change efforts, providing technical assistance to support implementation, leveraging the reputation of the Foundation toward systems change goals, and facilitating the dissemination of innovation to states and localities. We begin our examination by reviewing the literature on systems change and the role of philanthropic foundations in catalyzing large-scale change in public organizations.

Conceptual Background

Systems change has its theoretical roots in open systems theory and seeks to explain how the different parts of a social system interact to produce meaningful and transformative change (Linkins, Brya, and Chandler 2008; Foster-Fishman and Behrens 2007; Foster-Fishman, Nowell, and Yang 2007; Parsons 2007; Tseng and Seidman 2007; Supovitz and Taylor 2005). These kinds of efforts are especially prevalent in health and human services. In this context, systems change refers to “changes in organization culture, policies and procedures within individual organizations or across organizations that enhance or streamline access, and reduce or eliminate barriers to needed services by a target population” (Linkins, Brya, and Chandler 2008, 52). A system is contrasted with a confined domain such as one organization or even one program within an organization (indeed, complex organizations might be considered micro-systems themselves). In the public and nonprofit sectors, examples of systems include a school district and a human service delivery network (Foster-Fishman, Nowell, and Yang 2007; Supovitz and Taylor 2005). In most cases, systems change requires change in policies and practices in an inter-organizational context; that is, multiple organizations must implement individual organizational change in a way that ensures alignment with desired broader, macro-level change efforts (Isett and Provan 2005; Fernandez and Rainey 2006).

Systems change is difficult in the best of circumstances. However, when an external agent, such as a philanthropic foundation, attempts to leverage change in a system, it can become even more complex. This is because the external actor must first understand the system in order to be effective in its activities once it enters a system. External actors may be defined as individuals, groups, or organizations that are not known to be direct participants in the focal field, but in some manner influence the course of action (Davis et al. 2005). External agents may be important assets in a system because they bring resources such as legitimacy or funding to the change effort, or even be instrumental in highlighting dynamics that may be contrary to systems goals but go unnoticed because of routinized operations (Meyer and Rowan 1977; Hartley, Benington, and Binns 1997; Suchman 1995; Zucker 1991).

In many ways, systems change efforts attempt to fundamentally shift how services are provided in particular policy fields. As Sandfort and Moulton state (2014, 107), policy fields are “bounded networks among institutions and organizations carrying out a substantive policy and program area in a particular place.” Policy fields include the institutional structures (regulatory, network, operational) in specific policy domains, and the relevant stakeholders that control resources and exert influence on program and policy implementation (Stone and Sandfort 2009). There are numerous policy actors within particular policy fields that impact implementation of a public service, including government agencies, nonprofit service providers, research and evaluation centers, and organizations that infuse private capital into policy change efforts, such as philanthropic institutions (Sandfort and Moulton 2014; Stone and Sandfort 2009).

As policy actors, large philanthropic organizations are in a unique position in society to drive social change through investing their significant resources in public institutions. As Reckhow (2012, 20) states “Foundations use private assets to advance their own vision of the ‘public good,’ while remaining relatively free from formal political authority.” In attempting to drive large scale social change, philanthropic foundations seek to influence public institutions through a diverse array of strategies. Sandfort (2008) argues three roles foundations play in public institutions: complementary, supplementary, and adversarial. A complementary role emphasizes efforts to support existing public programs, for example, providing gap financing for public service delivery. Alternatively, foundations can play a supplementary role when they invest in efforts public institutions are not emphasizing such as through grantmaking when new problems arise. In particular, supplemental activities can facilitate cross organization learning through convening groups to share promising practices when there is little attention yet from government. Finally, foundations may also play an adversarial role when they invest in efforts to change public opinion and contribute to policy discussions at the federal, state, and local level through funding research and developing policy briefs. While the federal regulations prohibit philanthropic institutions from directly lobbying for legislation, foundations actively engage in public policy in a variety of ways, “including such strategies as developing new communities of practice, changing debates and practices in the administration of public organizations rather than primarily intending to affect legislative impact” (Tompkins-Stange 2016, 15). Because of the reduced constraints of being a nonprofit, foundations can provide education about proven solutions, best practices, and effective rules/rulemaking –creating a “push” to make changes.

While historically foundations have not been seen as “policy entrepreneurs”, recent scholarship on large philanthropic institutions suggests foundations promote ideas and support these ideas in the policy arena (Reckhow 2012). Mintrom (1997) defines policy entrepreneurs as “able to spot problems, they are prepared to take risks to promote innovative approaches to problem solving, and they have the ability to organize others to help turn policy ideas into government practice” (740). Roberts and King (1991) state that policy entrepreneurs “work outside the formal governmental system to introduce, translate, and implement innovative ideas into public sector practice” (152). Increasingly, the literature is advancing the idea of philanthropic foundations as policy entrepreneurs (Mosley and Galaskiewicz 2015; Tompkins-Stange 2016; Reckhow 2012). For example, Mosley and Galaskiewicz (2015) found that philanthropic foundations were more likely to act as social innovators in state policy environments that were conducive to policy change. They defined social innovation as “focusing on finding new solutions to existing social problems. Foundations support social innovation when they seek to influence public policy through research or program evaluation grants, build new institutional options, and support government innovation” (Mosley and Galaskiewicz 2015, 1228).

Moreover, the literature has identified the ways in which foundations attempt to influence policy and practice in the public arena. These activities include direct engagement in the policy process by developing “closely coupled relationships with policymakers and building coalitions of elites to advocate for specific goals”. For example, foundations bring together important stakeholders to address problems, through convening processes and developing networks of stakeholders to drive change (Sandfort 2008). Moreover, a recent article by Quinn, Tompkins-Stange, and Meyerson (2014) found that one philanthropic Foundation built a network of “thought leaders” through convening elites to discuss educational reform efforts. Foundations also support indirect efforts by funding research and building field expertise (Tompkins-Stange 2016). For example, Ferris and Harmssen (2009) found foundations utilize media campaigns, publications and their own expertise in their areas of interest to influence public officials. Foundations also fund research on policy issues, and promote those research findings as a way to make the case for change (Sandfort 2008).

Specific to systems change, scholars have also emphasized how foundations pursue field building strategies to advance systems reform. As Ferris and Williams (2010, 13) point out “efforts to change organizational cultures through capacity building and leadership development, or producing research that influences thinking about professional practices, accreditation, or certification” can be effective systems change strategies. The efforts that target organizational or field development and operations can be both complementary and supplementary to government efforts at reform. Though these types of efforts have been less well documented in the literature.

In addition to the gap in understanding of the processes external agents use to effect change at the operational/organizational level, there is limited literature examining the perspective of those within the public and nonprofit sectors as to the extent to which foundation efforts advance reform. Weissert and Knott (1995) assessed the extent to which lawmakers perceived the role of foundations in the policy process. They found that lawmakers perceived an important role of foundations in “raising concerns onto the national agenda” through policy briefs, sponsoring commissions and supporting demonstration funding (Weissert and Knott 1995, 284). Additionally, Delfin and Tang (2008) examined the perspective of grantees on the role of foundations in environmental nonprofits and found grantees perceived the role as helpful, though mildly so. These findings led the authors to argue that foundations “are inherently limited in their ability to direct large-scale social change. Instead of causing fundamental social change, what foundations can do is to help accelerate change, to selectively help reduce some negative side effects of the change, or to infuse positive change with professional legitimacy” (Delfin and Tang 2008, 620). While these studies provide support for foundation efforts in public policy and social change initiatives, they do not directly examine the perspectives of public and nonprofit professionals undergoing systems change reform in public organizations. This is important because we need to understand how the foundation’s involvement can facilitate or inhibit systems reform work in public institutions from those most closely associated with the work. This article contributes to the literature by exploring the perspectives of system professionals on the strategies and processes utilized by the Foundation, with a particular emphasis on Foundation efforts that both contributed and hindered systems change reform efforts in public institutions.

Data and Method

The data presented here focuses on the perceptions of nonprofit and government professionals whose organizations were participating in the initial phase of reform in local juvenile justice systems sponsored by a prominent national Foundation. The Foundation is listed in the top 25 wealthiest charitable foundations in the United States. Their portfolio has significant investments in many of the country’s most pressing social issues, and has a presence throughout the 50 states. The initiative studied here was one investment in their portfolio.

The Foundation selected four states to participate in the initiative. Initial site selection was based on a number of factors including geographic diversity (eastern seaboard, pacific northwest, southern, and midwestern), existing commitment to reforms, and differing needs and opportunities that are reflective of other state juvenile justice systems. Each state had multiple sites within it, so in all there were 18 sites in the study.

While the broader study utilizes a mixed-methods approach to understand systems change, we focus here on a secondary analysis of the qualitative data.^[1] Qualitative research is particularly germane to questions of process (Maxwell 2005) and exploration (Yin 1994). As Maxwell (2005, 23) states “a major strength of qualitative research is getting at the processes that lead to outcomes, processes that experimental and survey research are often poor at identifying.” As such, interviews were used to explore how and in what ways processes interact to effect change.

Findings

Four distinct strategies emerged as important for systems change efforts in public organizations. The strategies are: partner with state policy actors to accelerate systems change efforts, provide technical assistance to support implementation, leverage the reputation of the foundation toward systems change goals, and facilitate the dissemination of innovation to states and localities. The key elements, both positive and negative, of each foundation strategy that emerged from the interview data are presented below.

Discussion

The purpose of this study was to examine the underlying strategies and processes used by one foundation aimed at accelerating systems reform efforts by exploring the

perspectives of those within public and nonprofit organizations undergoing the change. The findings reveal the Foundation utilized a number of processes in their systems change efforts, including convening system actors to focus attention and to build consensus for reform efforts, sponsoring forums to disseminate innovation across states and localities, lending their philosophical support at both the policy and implementation levels of the system, and providing localities training and access to expert consultants. Table 1 provides a summary of the study’s findings.

The Foundation utilized both direct and indirect roles in their efforts to advance systems reform. By partnering with state policy actors and leveraging their reputation toward systems change goals, the Foundation proactively engaged policymakers in their efforts. The other two strategies the Foundation pursued were indirect, in that they are provided resources to facilitate dissemination of innovation and to train system professionals to effectively implement systems reform.

Most of these efforts are characteristic of Sandfort’s (2008) concept of the adversarial role of foundations in “prodding the government to make changes in public policy”. Three of the four strategies employed by the Foundation impacted policy change, including partnering with state policy actors, leveraging the reputation of the Foundation, and facilitating dissemination of innovation to states and localities. Interview participants suggested these strategies influenced public decision making at the state policy level and within state and local level administration.

While the strategies were most focused at the adversarial level, the processes and tactics used to influence policy reform were reflective of Sandfort’s notion of the supplementary roles of foundations. The Foundation did not play a complementary role because they did not provide direct funding to public agencies for juvenile justice programs or services. They did, however, support efforts to spur reform work by bringing people together to build consensus on the direction and focus of their reform work, to provide training and technical assistance to public and nonprofit employees working within the system, and to disseminate promising practices across states and localities. These efforts were meant to accelerate reform in public institutions by focusing on reform work not being fully realized by governmental entities. By supplementing government action through convening stakeholders, and specifically, state policy actors, to build consensus for reform, the Foundation played a direct role in shaping state level policy, and lent their considerable reputation in support of policy reform and budgetary decisions at the local level.

The findings emphasize a focus on cosmopolitan (in Rogers’ terms) or entrepreneurial (in Mintrom’s terms) policy actors within the system that could influence diffusion of the change agenda (Mintrom 1997; Rogers 2003). The foundation invested in entrepreneurial activities cited in the literature, including developing relationships with system insiders, disseminating innovation within the state and across state lines, and funding efforts to build the capacity of system professionals to effectively implement innovation (Roberts and King 1991). Interestingly, the Foundation was not a policy entrepreneur in the traditional sense in that they did not come into the process with a solution or policy option for which they advocated. Instead, they identified locations where reform was currently being pursued and sponsored opportunities to bring field level stakeholders together to collectively decide what policies they would pursue. Their activities were targeted toward accelerating change by building the capacity of the policy field to sustain the efforts.

Moreover, these findings contribute to the literature by outlining the tactics and processes utilized by the Foundation to catalyze change in complex public systems. They leveraged their resources, both financial and nonfinancial (ie. their reputation), to influence system actors to enact policy and operational changes. For example, the Foundation invested resources in field building processes and activities, and in developing networks of system actors. They sponsored efforts to bring the various stakeholders to the table and build consensus around systems change efforts. They also funded efforts at to share promising practices at national and state level forums at the implementation level. These findings support Teles’ (2008, 51) notion of foundations as “strategic coordinators” whereby they “move beyond funding to provide coordination and advice”. At the thought leader and policy level, interview participants perceived the work of the Foundation positively. Interview participants consistently stated the work of the Foundation in bringing people to the table around systems reform was the most important way in which they accelerated systems change efforts. However, our results do suggest that in areas where foundations have historically played less of a role, such as interacting with direct service providers rather than policy elites, there may be some room for improvement.

Accordingly, we found that one of the main ways in which the Foundation engaged in systems reform was through convening a variety of stakeholders and building consensus for the direction of reform. This finding is akin to Tompkins-Stange’s (2016, 80) notion of “grasstops” strategies in which foundations engage “predominantly with elites in government to move policy objectives on shorter timelines than the state bureaucracy would normally allow”. Our study found that convening processes may be especially important since systems change spans multiple organizations. This is what distinguishes systems change from organizational change – there is no command and control. Therefore, in order to effectively change systems, you have to garner the support from largely autonomous organizations using influence and persuasion. This study contributes to the literature by highlighting the importance of the convening process by philanthropic institutions seeking to impact system change. In particular, this study finds the involvement of the Foundation was an asset for systems change because it provided an external perspective that helped bring reluctant stakeholders to the table, thereby undergirding any convening process that may take place outside of Foundation efforts.

However, the key to the success of the reform initiatives was that they did not simply rely on convening to make change happen. Instead, they laid the groundwork during convening for a common understanding, an important step when diverse actors need to work together (Klijn and Koppenjan 2000). The Foundation then did not assume that the participating organizations had the organizational slack or capacity to make the necessary adjustments to processes and procedures. Rather, they attempted to solidify the gains made in convening through providing the supplemental support to make necessary operational changes – connecting the policy and operational levels.

At the local level the Foundation facilitated change in the way organizations operated. They provided technical assistance in the form of training and access to expert consultants to individual organizations within the systems of focus. While the interviewees viewed the technical assistance as very beneficial, there were mixed perceptions about the Foundation at this level. In fact, participants who expressed negative perceptions of the Foundation’s efforts were all working at the operational level. In particular, the observations about a lack of cohesion between policy and practice within the change initiative suggests a lack of alignment between these two levels of interventions. While the Foundation paid considerable attention and invested resources at the statewide level through direct contact with coordinating entities and state policymakers, there was less direct contact with the Foundation itself at operational level – with contact being filtered through the consultants and the state coordinating entity. Thus what the local sites were getting was indirect and distilled, rather than direct, or participative.

This is problematic because the purpose of systems change work is to “support operationally disparate system of care to function more cohesively” (Johnson et al. 2012, 84), and to better understand how different parts of the system interact. While the Foundation spent considerable time and resources at the policy level, it did not necessarily transfer to the operational level. Despite clear investment at the operational level through its technical assistance agents, frontline providers did not necessarily feel invested in the Foundation efforts. This finding illustrates the complexity of systems reform, and the importance of aligning interventions at multiple levels. It is also reminiscent of known problems in organizational change where individuals are unaware of how their contributions are connected to the larger effort (Kotter 1995).

At a broader level, by focusing on the system context, this case study illuminates the diverse range of strategies the Foundation employed to effect change at different levels in the system. While these strategies have been identified in other recent studies (Tompkins-Stange 2016), the combination of strategies this Foundation applied in their effort to advance systems change, and the perspective of system professionals on what Foundation activities were viewed as more or less successful is a unique contribution to the emerging literature on this topic. The Foundation used both direct and indirect strategies in their efforts, with the direct strategies focused at the state and local policy level and the indirect strategies targeted toward frontline implementers. Because systems change entail both policy and operational change, this study suggests foundation strategies need to target policy change efforts and field building activities that enable system professionals to implement the change effectively.

Conclusion

This case study contributes to the field’s understanding of how foundations engage in public policy work at the state and local level. Ferris and Harmssen (2009, 15) define public policy engagement for foundations as “influencing public decisions – in legislative bodies, in the courts, and in administrative agencies – at all levels of governments and across borders that impact important social outcomes”. Foundation processes and tactics illuminated by this study highlight a multi-pronged approach to effecting systems reform. In particular, this study identifies a number of specific processes used by the Foundation to engage more deeply, and in a hands-on way, with public institutions in their reform work. Moreover, the findings reveal the Foundation supplemented government action as a way to pursue their adversarial goals. Moreover, this study highlights ways in which Sandfort’s framework could be further developed to explicate the interplay and overlap between the complementary, supplementary and adversarial strategies in different policy and organizational contexts.

This study is not without its limitations. This research is based on one foundation trying to effect change in the field of juvenile justice, an area of relative consensus on the need for reform. Foundation strategies in other policy fields with more contentious policy debates (ie. reproductive rights, etc) may look different. Therefore, we cannot generalize these findings to all foundation efforts to advance policy reform. Future research that examines other foundation efforts to impact systems change in other policy fields in public institutions would provide the field with a fuller understanding of a range of foundation activities in systems reform work.

The findings suggest other avenues for future research as well. First, external foundation efforts at systems change may bring with it tacit resources that are yet unmeasured in the literature. The value of the organization’s reputation and the cache of evidence brought to bear on the problems within a system are currently intangible “goods”. Understanding the parameters under which these elements are effective could be important in informing other policy actors initiating systems change efforts, and avoidance of wasted efforts.

Second, how alignment between policy and operations happens in implementing policy change, and stronger and weaker approaches to achieving that alignment, are yet unexplored and unknown in the literature. While much of this may be reliant on relationship building, the mechanisms by which those relationships are brokered and then translated into systems change outcomes have yet to be studied. As large philanthropic organizations continue their efforts to influence systems reform in government institutions, it is essential to answer these questions to better understand the processes by which foundations attempt to effect large scale change, and to assess the long-term efficacy of those efforts.