Systems Change Activation: The essential role of philanthropy to unleash the power of PPPPs

Public Private Philanthropy Partnerships (PPPPs) have an incredible ability to change systems. They can work to address deep-rooted issues and, by combining the unique resources and powerful levers of public and private, they can deliver social, economic, and/or environmental transformation for the benefit of all.

Supported by Laudes Foundation and the African Climate Fund, and in association with WAPPP, TPI has undertaken a major piece of research , looking at 46 PPPPs to try to make sense of this emerging area: to understand what PPPPs are able to achieve, the levers they apply to deliver transformation and what roles philanthropy plays to make them happen. The report, part of a major initiative to inspire and empower philanthropy to engage in PPPPs, was launched at COP 28 in December 2023.

I’m inspired by this report. It helps us understand why PPPPs are critical to the systems change we want. It helps us see where philanthropy can play a unique role in accelerating such partnerships. And it highlights practical examples across five continents of where PPPPs are moving the needle, showing us what is possible when we collaborate, meaningfully and authentically. Leslie Johnston, M.Sc. , Laudes Foundation

The results of the research are fascinating. The immediate initial surprise was just how flexible and adaptable the PPPP mechanism can be. Here is just a small snapshot of the huge range of PPPPs out there and what they are able to do:

• Unlock investment in infrastructure, for example through blended finance, for net-zero energy production while simultaneously ensuring that transitions are just;
• Raise standards in education and health through innovative finance mechanisms that maximise the impact of public funds;
• Enable more equitable, resilient, and sustainable supply chains by bringing actors together from across a sector to together deliver a system change;
• Extend access to vital services and livelihood opportunities by de-risking investment in the infrastructure that is required;
• Provide a demonstration of pro-development business model that can be scaled commercially, where a company or investor had assumed it would not be possible.?

One of the most exciting features of PPPPs is that they can enable businesses and investors to act in a fully commercial way, supporting private sector-led growth or business solutions to societal and environmental problems that are not limited in scale by the amount of public or philanthropic funding available. And by fully engaging with NGOs and communities, they can ensure that solutions are well-designed to the context, appropriate, just and fair.

Importantly, time and again we were told interviews that it is not philanthropy providing all the financial resources to change the system. Any funding provided by philanthropy is catalytic in nature, supporting the PPPP to unlock the resources necessary. In other words, it is the system actors themselves (potentially including innovative finance) changing systems - not the external party, philanthropy.

How are PPPPs delivering system change?

Transforming or rewiring systems involves using a range of levers from public, private and philanthropy applied simultaneously or sequentially. The PPPPs in the sample have many varied and often unique features and use a variety of different levers of the following kinds:

• The system-level levers that capacitate, connect, influence, and reorient the different entities within the system (e.g. connecting houses to solar grids);
• The ‘boundary condition’ levers that change the environment in which the system sits in a significant way, such that the actors in the system adjust their behaviours and practices (e.g. changing regulations)
• The innovative finance that enables the application of the above levers or can take approaches to scale.

The following six levers (three system-level and three applied boundary condition), along with innovative finance were by far the most commonly used in the research sample.

Most PPPPs use multiple levers simultaneously to deliver transformation. For example, the Just Energy Transition Partnerships are nascent financing cooperation mechanisms to help a selection of heavily coal-dependent emerging economies make a just energy transition. The initiative uses a combination of innovative finance, changing rules and norms, infrastructure development, and government capacity development, to support its transformational aims.

What’s the catch?

While the potential for public-private partnerships to deliver system change is clear, the reality is they can be extremely difficult to get off the ground. Even though the business case might be strong, with the final solution delivering significant social and business value, and even after a successful workshop garnering great excitement, actually putting it into practice comes with significant barriers including:

• A perception of too great a risk for private sector engagement, whether financial, political, or otherwise; a lack of political will or bureaucracy preventing public sector engagement; a lack of resources to allow NGOs to come to the table with their essential insights;
• A lack of leadership and drive to create momentum, engage and persuade key players, and stay the course over potentially long periods;
• Insufficient trust among the various parties and no safe space to convene the various parties or the specialist support required to take a partnership through a development process;
• Active resistance to change the status quo or its lazier cousin, inertia.

This is where the role of philanthropy can be critical in building momentum, solving problems, and helping the partnership to overcome the barriers to success. We term this the activation energy, appropriated from the scientific term meaning the initial energy that may be needed for a chemical process to start.

The six key roles of philanthropy to activate PPPPs

The research found philanthropy can inject the activation energy required in six main ways:

1. Initiating/convening the partners, taking them through a partnership development process, and potentially coordinating the partnership’s activities, bringing credibility as a connector, and enabling dialogue among partners;
2. Cocreating and codesigning PPPPs with public and private partners and, if appropriate, with peer organisations; providing a steady input of energy and momentum;
3. Initial and catalytic funding of a PPPP’s set up and running costs (but not the cost of implementing the transformation);?
4. Capacitating partners to be able to play their roles in the PPPP and accelerating progress with technical assistance. Philanthropy often brings the technical expertise to develop new models and can support partners as they adopt new ways of working;
5. De-risking a PPPP for other partners such that it can tackle the most difficult challenges and then reach large scale by mobilising mainstream private sector investors;
6. Enabling PPPPs to be able to test and learn through multiple iterations of a solution, and by prototyping innovative ways of working.

Philanthropic organisations are very flexible as to which roles they play according to need, context, and maturity of a PPPP. As the situation demands, philanthropy is ‘doing whatever it takes’ to make change happen by drawing from the extensive menu of options open to them.

There is little question that without philanthropy providing that activation energy, helping the partners to travel together over all the barriers, most of the partnerships simply would not have happened.

Moving forward

We’ve been blown away by the range of PPPPs around the world, but our research reveals we're only scratching the surface of the true global potential.

In the next phase of this ongoing programme, we will undertake a needs assessment to understand what it will take to optimize and mainstream PPPPs. Further, we plan to work with a number of new and existing PPPPs to support their development and draw out learning from the experience as we codify effective practice and develop guidance. Finally, we will continue to develop the community of PPPP practitioners to exchange knowledge and experience.

More long-term, we aim, together with WAPPP and our global support network, to build partnering capacities across public, private, and philanthropic organisations and develop a global PPPPs support infrastructure.

If you'd like to engage with this work, please do get in touch.

Further information

All 46 PPPP examples analysed in this research have been compiled into a PPPPs Library . It serves as a catalogue of informative ‘factsheets’ about inspiring PPPPs. These examples can be sorted based on region, geographic scope, and SDGs. It is a living document that will be continually updated with additional examples.