Tax within the context of philanthropic giving
Eliminating global poverty has long eluded the international community, governments and development agencies. While social and economic empowerment are the intentions of povertyeradication efforts, often ‘we paper over the cracks and layer yet more complexity onto an already complicated and confused system’, perpetuating the cycle of poverty for millions worldwide.
Child & Youth Finance International (CYFI) was launched in 2012 with an ambitious mission in mind: provide marginalised children and youth around the world with access to financial services, enhance their awareness of economic rights, and empower them to build their assets, invest in their future, and ultimately break the cycle of poverty. CYFI’s goal is to equip today’s youth so they can become the next generation of empowered Economic Citizens.
It was clear from the beginning that taking on the task of reshaping financial systems required a new way of thinking, and so CYFI looked to a longer-term Systems Change approach to meet our goals.
What is Systems Change?
Increasingly recognised within the sphere of social impact, Systems Change is picking up momentum amongst philanthropic actors as a viable approach to addressing large, complex issues. Many organisations and institutions are now realising the value of looking at the bigger picture in order to tackle the world’s most pressing problems.
The complexity of the sustainability issues we face mean that a precise and methodical approach is needed to create long-term change. As an approach, Systems Change recognises that there is no one big answer to complex problems, but rather a plethora of smaller efforts working in harmony that propel the entire machine forward - the concept proposes that ‘social problems are the product of network of cause and effect, and this must be reflected in the way we act to improve them’.
However, attempting to practically apply and measure the Systems Change approach can be an obstacle for many organisations. Despite consensus about the opportunities Systems Change offers as an approach, it is an abstract concept focused on identifying problems rather than solutions. This, coupled with a shortage of practical guidance, has meant the concept has posed a challenge in getting to grips with how to go about reshaping systems.
A key challenge for many change agents is choosing the right level, or levels, of scale for the changes they seek. The answer is often working at multiple levels: top down, bottom up, outside in and inside out. At the same time, it is possible to create conditions that take advantage of a system’s capacity for generating creative solutions: foster collaboration, nurture networks of connection and communication, create climates of trust and mutual support, and encourage questioning and reward innovation.
Systems Change works by enacting change through the collaboration of multiple sectors, by implementing multiple activities across many levels, and by the leading organisation adopting multiple roles to address the various challenges and opportunities present within a context – as demonstrated in CYFI’s approach to Systems Change.
CYFI’s Approach to Systems Change
Over the past five years, CYFI has worked with global organisations such as the G20/GPFI and OECD on making financial inclusion of youth a key focus in the development agenda, fostered collaboration in each of the regions we work in, and supported countries and their governments in creating and implementing strategies to promote Economic Citizenship for youth.
To drive the necessary change to empower young people and combat cycles of poverty, CYFI has adopted a Systems Change approach, providing a leading example and case study on how the concept can support sustainable social and economic impact.
CYFI has found that utilising Systems Change as a means to enact sustainable change requires organisations to adopt a two-sided approach; firstly defining the issues and determining the supportive role they must play to enact change, and secondly identifying the change which has occurred. For CYFI, our roles and how this links with resulting changes in relation to Economic Citizenship are illustrated in Diagram 1 below.
The various roles CYFI plays relate directly to identifying the state of Economic Citizenship within a country and determining the support needed to accelerate Economic Citizenship for youth.
Therefore, depending on which stage a country is at on initial contact from CYFI, the activities undertaken will support systemic change to propel Economic Citizenship for youth forward. CYFI will then work to efficiently engage with and develop existing mechanisms present within a country to create a sustainable and cost-effective use of resources where possible. The division of activities per stage can be seen in Diagram 2.
For CYFI, adopting this two-pronged strategy as part of our Systems Change approach has enabled us to pay attention to the smaller systems to identify opportunities and challenges present within a country, whilst also monitoring changes to the larger system. As such, measuring impact of our support and activities undertaken helps CYFI to identify where there has been sustainable change and where further support is needed.
Effectively measuring systemic change is challenging – particularly with regard to assessing long-term impact during the process and tangibly gauging to what extent a system has and is being reshaped.
To understand the impact of our work, together with the help of Deloitte, CYFI created a Diagnostic Tool to track a country’s progress toward systemic change between the years of 2012 – 2015 in areas of youth economic citizenship. This impact evaluation tool also allows CYFI to efficiently monitor its unilateral and collaborative actions in relation to a given country.
Combining a CRM system, Salesforce, and a data visualization tool, QlikSense, the resulting impact evaluation matrix has helped CYFI to simplify complex data and make it possible for CYFI to measure impact and identify correlation between our work and the sustainable change present in countries in relation to Economic Citizenship for youth.
CYFI’s key findings include:
• In the period of 2013-2015, CYFI helped 57 countries move 177 stages through 2,186 activities, averaging three stages and 47 unique activities per country
• A different range of activities are needed in Africa, Latin America and MENA in order to create change than in Eastern and Central Europe (EECA) Western Europe and Asia.
• Creating systemic change takes between four to eight years, varying from context to context.
Our key findings illustrate a clear correlation between the supportive role of CYFI, our Systems Change approach and the resulting changes within each country. The Diagnostic Tool provides insight into the impact of short-term support for countries, but will also continue to feed into our long-term overview to present sustainable impact as a result of our Systems Change Approach as we move forward with our 2016 – 2020 strategy.
Securing sustainable impact with Systems Change
While CYFI currently provides one of the few examples of best practice, as Systems Change continues to gain momentum further case studies on what works and why will guide the philanthropic sector in tackling the world’s biggest issues. Systems Change not only provides organisations with a means to tackle complex solutions through an inclusive, causalitydriven perspective, but also offers a cost-effective and sustainable approach.
We have also found that it is possible to incentivise partners and collaborators around supporting systemic change at a range of levels, in addition to our work in supporting countries with enhancing Economic Citizenship for children and youth. Highlighting the crucial collaborative nature of Systems Change, advocacy-related events such as Global Money Week (GMW) and The Global Inclusion Awards create awareness and a call to action for individuals, communities, institutions and organisations alike to align interests and strategies for create far-reaching social impact.
With the support of our global network, CYFI has effectively utilised a Systems Change approach to tackle our complex mission to empower children and youth worldwide. Over the past five years we have used our Systems Change approach to identify the root causes of youth-related poverty, create a roadmap for action and propel joint actions around the cause. As CYFI enters into our 2016 – 2020 strategy, we will use the lessons learned from our Systems Change approach to evolve how we continue to tackle the financial and social issues facing youth and create real systemic change.
Download this article as a PDF. This article first appeared in Philanthropy Impact Magazine issue 14.