Philanthropy 4.0: Giving in Times of Disruption

Otto Scharmer
Field of the Future Blog
13 min readDec 21, 2023

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image by Jayce Lee

Faced with accelerating disruptions and social and environmental breakdowns, traditional forms of philanthropic giving may be less effective than they once were. Confronted with societal divisions, wars, and the climate crisis, core actors in philanthropy have begun to ask how philanthropy can respond more effectively in moments of a polycrisis. How can philanthropy deal with new forms of hypercomplexity? What is the role of philanthropy in responding to breakdown, and how can it promote regeneration, transformation, and renewal?

Numerous experiments and innovations in the philanthropic sector are responding in various ways to these disruptive challenges: from trust-based funding to participatory grant-making to flexible multi-year core grants for transformative infrastructure building. We also see foundations and individual wealth holders taking more radical steps: the Lankelly Chase Foundation in the UK decided in 2023 to distribute all of its assets to social justice causes and close within five years; Marlene Engelhorn in Austria is giving away 90 percent of her inheritance (around 25 million euros) after asking a diverse group of individuals to help her decide how the money could best be spent.¹

Underlying these innovations in giving is a desire to create systemic and long-lasting impact that leads to a transformation of existing patterns, and that supports sustainable and inclusive change for the well-being of communities and the planet.

Three Types of Complexity

In our work at the Presencing Institute we believe that most solutions to the challenges we face already exist. But what is missing is our collective capacity to implement these solutions in a timely way and at scale. We also believe activating collective agency applies to the role of philanthropy in society. Traditional forms of charity and donor-defined problem-solving can provide effective solutions to straightforward challenges, but the new complexities of the polycrisis require new approaches from all sectors, including philanthropy. Finding effective responses to the polycrisis through philanthropy has implications for (a) the relationship between philanthropy and social change makers and (b) the awareness and mindsets that guide philanthropic activity.

A quick look at how the discipline of systems thinking can help us to understand complexity provides some valuable insights. From a system perspective, we can identify three types of complexity that play into the challenges that our institutions and communities face (see Figure 1).

Figure 1: Three types of complexity: dynamic, social, emerging (Source: Scharmer, C. O. (2019), Theory U, p. 58).

Dynamic complexity concerns delayed feedback loops: cause and effect are distant in space and time. For example, carbon emissions that took place decades ago in distant places have an impact on today’s climate across the globe. Those who are negatively affected by climate change often are not the same people or entities that created the problem. Dealing with dynamic complexity requires a system perspective that recognizes the interconnections between the different parts of a system. There is a set of well-tested methodologies (e.g., system dynamics) that do exactly that.

Social complexity concerns differences in views and interests: different stakeholders bring different interests and worldviews to a situation. One recent example was the attempt by the 2023 UN Climate Change Conference (COP 28) stakeholders to agree on a joint statement. But social complexity also creates challenges in our daily life and work: teams that don’t align, organizations that operate in silos, a society that is polarized. Dealing successfully with social complexity requires using refined multi-stakeholder methodologies to bring together diverse interests and viewpoints in collaborative problem solving. It often requires skilled facilitation and process competence, or what we call “social technologies.”

Emerging complexity is the defining feature of the pressing challenges facing our planet, our institutions, and our communities. Emerging complexity describes our current polycrisis, when disruptive challenges emerge and the solutions for these challenges are unknown, in part because the problems themselves change and evolve. Emerging complexity describes an evolving and often disruptive situation. Examples of this kind of complexity include technology (AI), health (Covid-19), war, terrorism, structural violence (e.g., in the Middle East), and climate-related disruptive emergencies. In all these cases we are confronted with emerging situations where past experience might not help us or could even prevent us from responding appropriately.

Dealing with emerging complexity requires a new skill set, namely the ability to co-sense into the emerging future possibilities by connecting more deeply with the unfolding of the now. Our work with Theory U and Presencing has focused on emerging complexity and addresses the question of how to learn and lead in moments of disruption. In our twenty-year inquiry into cross-sector and cross-region action we have developed tools and methods for implementing awareness-based system change. The Paris Agreement only a few years after the collapse of the climate talks in Copenhagen is one of numerous (and often local or regional) examples that showcases how an awareness- and systems-based approach to leadership can shift the thinking of the respective stakeholders from an egosystem view to an ecosystem view. Doing this new leadership work at the scale called for today requires an upgrade of the methods and tools for transformative systems change — and the spaces that support those kinds of processes.

Four Types of Philanthropy

Philanthropy today faces, like everything else, increasing levels of complexity across these three different forms. The following matrix presents four types of philanthropy that respond to different forms of complexity.

Table 1: Four Types of Philanthropy

Philanthropy — literally, love for humanity — has traditionally taken the form of charitable and individual giving (philanthropy 1.0). The challenge is defined, and the donor helps meet it. Both the problem and the solution are known. A community needs a library, a school needs a gym, or individuals need food and shelter. A recipient might acknowledge a gift by naming a space after a donor or giving the donor’s name visibility in some other way. These gifts from individuals and organizations meet an immediate need but usually do not eliminate the root causes of the problem. Root causes may include poverty, inequality, exclusion from opportunity, systemic racism, and climate destabilization, to name a few. Addressing the systemic issues that led to the problems requires a different type of response.

Philanthropy 2.0 introduces measurable outputs and outcomes and aims to increase the efficiency and impact of the giving. A foundation might develop a strategic focus (such as reducing CO2 emissions, investing in education, or improving access to health care) and an indicator system that measures the impact of the giving in those areas. This reporting system guides the philanthropic decision.

The recent popularity of effective philanthropy has demonstrated that working with quantifiable indicators has efficiency advantages. Critics of this approach point out the inherent power imbalance between donors and recipients, the bias toward impact areas where results are easily measurable in the short term, and a lack of accountability on the part of some philanthropic decision makers. For example, in his critique of the colonial legacy of philanthropy Báyò Akómoláfé argues, “Philanthropy as an ecology, a moral order is still concerned with anxieties about governance, best practices, power, equity, inclusion, diversity.” Akómoláfé suggests a greater focus on what he calls “paraphilanthropy,” and continues that paraphilanthropy is “not remedy. It offers a more robust framing than the critiques of philanthrocapitalism which often come already pre-formulated with ready answers.”²

Philanthropy 3.0 responds to the power imbalance that exists between philanthropic donors and the recipients of the funding. It is more collaborative and experimental and is more focused on long-term forms of giving. In addition, 3.0 philanthropy creates innovations that aim to include the perspective of the grantee. For example, the community-based foundation Maine Initiatives collaborates with local communities to identify the focus areas of their giving on deciding who will receive grants. Dialogue is central to its success, and giving is embedded in specific social contexts.

In a Presencing Institute project focused on maternal health in Namibia, we built a team whose members were a microcosm of the local health system, from government health officials to nurses. Working closely with mothers and local groups, the health care system was able to identify and implement systemic solutions to improving maternal and child health. A shift in culture helped the system establish new institutional structures and become more responsive to the needs of mothers and their children. This was possible because the grant makers that supported this project accepted a “not-knowing-all-the-answers” approach and the radical involvement of the social system on all levels of the process. The grant maker listened to the local stakeholders.

Funder collaboratives, donor-advised funds, and impact investments are other experiments with 3.0 philanthropy that are moving in the direction of 4.0. The Lankelly Chase Foundation, for example, has created a “transition pathway” for dismantling itself and moving its assets into communities who can use these assets in any manner that they see fit. As the foundation’s CEO Julian Corner said: “We got stuck and realized we are part of the problem.”³

Systemic root issues tend to be less measurable and require longer-term interventions. Reducing structural violence, institutional racism, or environmental destruction requires the voices of the entire system in devising solutions.

Other organizations moving in the direction of philanthropy 4.0 include the Dutch Postcode Lottery and the Ford Foundation. The Dutch Postcode Lottery provides unrestricted institutional funding to Dutch and international NGOs to support key civil society organizations. The Ford Foundation’s BUILD program (Building Institutions and Networks), a 5-year, $1 billion initiative, aims to strengthen the capacity of civil society organizations to create civic infrastructures. These examples are significant in the current context where civil society organizations almost everywhere have been under attack for the past decade.⁴

Philanthropy 4.0, or transformative philanthropy, is an emerging form of philanthropic activity that focuses on transformative systems change. Its goal is to eliminate the root causes of a challenge by making systemic changes that generate well-being and prosperity for all. For example, the Eileen Fisher Foundation and its for-profit sister organization Eileen Fisher Inc. are innovating to move the apparel industry toward “regenerative fashion design.” Doing so requires a process that allows a microcosm of that system to see itself and sense its emerging future possibilities.

Many emerging initiatives are trying to build infrastructures for transformation. Several have been co-pioneered by the Presencing Institute. PI created u-lab, a free online, multi-local capacity-building platform for systems change that is delivered twice a year and has registered more than 250,000 participants from 186 countries. U-lab is PI’s contribution to the new global commons for planetary healing and societal regeneration. Our regional cross-sector leadership programs with partners in Latin America, Africa, and the Asia/Pacific brings leaders from business, government, civil society, and academia together on a deep sense making (presencing) journey of seeing and co-sensing the root issues of their challenges. Participants explore hands-on solutions through rapid experimentation and practical pathways into different futures.

We recognize that the most important systemic impacts of these interventions and innovations generally take years to become visible. For this reason, funding for such “upstream” interventions that focus on transformative systems evolution and renewal is notably scarce. Taking the Presencing Institute as a mini-case, we find a mismatch between the way most donors fund (downstream) and the need for resources to address the interconnected challenges now facing humanity (upstream). Many donors tell us that we simply do not fit into their typical lines of work, which often center on specific focus areas such as health, economic development, agriculture, etc. rather than on the systemic connections between and across these issue areas. Most donors do not have structures, strategies, or performance indicators that would make system transformation work an easier fit. Likewise, funders often indicate that they require measurable results within a set time period, often three years — a clear conflict with the decade or more it can take to show system-level results.

Another anecdotal observation, which requires further research, is that foundation boards can hold organizations back from more transformational work, even when program staff and leadership may support new approaches. One program director of a large European foundation recently summarized her experience in light of the four types of philanthropy: “When we work with our grantees in the field, we are exposed to 4.0 realities that all call for solutions in the logic of 4.0 types of philanthropy. But our board has set a structure that locks us into 2.0 constraints. We know that our board has a strategy process where they explore how to move from 2.0 to 3.0. But they are not involving us in that process.”

The reasons often shared for board reticence are the long timeframes and measurement challenges involved in system-level interventions. The upshot of all these observations and issues is a funding paradox for change makers and enablers like the Presencing Institute: the projects that we can get funded with ease are not our most important and impactful work. We find that the projects and initiatives with the most potential impact also tend to be the most difficult to fund and to scale up as needed by our current moment of planetary disruption.

Philanthropy 4.0 has the potential to change the relationship between philanthropy and grantees from transactional to transformative; it also requires a shared awareness and intention that makes it possible for all partners in the system to adapt and co-evolve. Philanthropy, when guided by a 4.0 view, also aligns its investments with the impact it wants to generate.

Complex Problems Require Complex Solutions

Which type of philanthropy is best? It depends. For known problems with known solutions at a moderate level of complexity, a 1.0 or 2.0 way of operating works because it is efficient. But in contexts that are defined by disruption and/or emerging complexity — that is, in environments with evolving problems and unknown or evolving solutions — a different approach is called for. More sophisticated forms of 3.0 and 4.0 philanthropy reflect this new context of societal change. More complex challenges require more complex solutions. Addressing them with 2.0 giving would be, as a colleague from the United Nations put it, like trying to “get to the moon by using a donkey cart.”

Philanthropy 3.0 and 4.0 differ from 2.0 by giving the grantee freedom to respond flexibly in the face of fast-changing environments and disruption. We were fortunate to have that freedom in March 2020, when Covid hit and much of the world moved into lockdown. It took us at the Presencing Institute only a few days to mobilize a core team of 100+ partners and volunteers to provide a critical sense-making space for our community. Over the course of a few months, roughly 15,000 people participated regularly in bi-weekly online gatherings, using deep listening, stillness, and awareness-based social practices to make sense of the disruption and to reimagine and reshape their own journeys forward. That intervention, called the GAIA Journey (Global Activation of Intention and Action), has led to numerous place-based initiatives that continue to generate change in many parts of the world. Our actions were made possible entirely by a trust-based grant that let us put together a program that we believed would serve the PI community’s needs.

Shifting the Locus of Philanthropic Action Upstream

Stepping up philanthropic activity at the 4.0 level requires shifting the impact focus of philanthropy from downstream (short-term metrics) to upstream (evolving and transforming mindsets and operating systems).

These evolutions require an inquiry into the root causes of the challenges we face. A growing number of change makers worldwide are pursuing these inquiries. But they often must operate in isolation and frequently lack the methods and tools to approach transformative change.

Over the years we’ve learned that the success of a transformational process in a system is a function of two things: one, a deeper shift of mindset and self-awareness by the people who are enacting these systems; and two, a supporting infrastructure that helps these change makers to navigate that journey. On the first point, I have argued that the essence of this deeper shift is the capacity to access a deeper form of knowing — something that my co-author Eva Pomeroy and I call “fourth-person knowing” (see Fourth Person: The Knowing of the Field). On the second point, it’s worth noting that such supportive infrastructures have been the enabling condition for movements around the world to succeed (from the decolonization movement in India, the anti-Apartheid movement in South Africa, the civil rights movements in the United States in the 1960s and in Eastern and Central Europe in the 1980s). Behavioral and transformational change needs an intentional support structure. Civil society, for the past decade-plus, has been under attack in many countries and often lacks these high quality co-creative support structures.

We believe that regenerative and transformative change can be made possible by creating a new type of global commons that includes infrastructures that support transformation. These infrastructures should democratize access to the tools, methods, and spaces that move people beyond polarizing discourse fueled by hate and fear.

The current polycrisis and wave of systemic breakdowns cannot be solved by the same thinking that created them. Philanthropy 4.0 tackles systemic challenges at their root by shifting the locus of intervention from downstream (outcome-driven) to upstream (operating with new mindsets and operating systems) including:

  • Scalable institutional infrastructures that bring together all relevant players to co-shape the evolution of the system.
  • Co-creative leadership capacities for shifting awareness from a silo to a systems view — i.e., from ego to eco.
  • Methods, tools, and spaces that support the scaling of these co-creative capacities.

All of these components exist, at least in the form of seeds and living examples. What’s missing is the supportive environment — the soil, the nutrients, the water, the light — that allows these seeds and prototypes to grow, to connect, and to become operational collectively. Shifting the primary locus of change in philanthropic action from merely downstream to also upstream could provide a much-needed boost to transformative change initiatives that helps to realign intention with action within whole systems.

[1] See website of the Lankelly Chase Foundation at; and Süddeutsche Zeitung, “Wie die Millionen von Marlene Engelhorn verteilt werden,” June 18, 2024.

[2] Báyò Akómoláfé (2024), Paraphilanthropy: Giving Money Its Freedom Papers. What addressing philanthropy’s colonial legacies asks of this moment. Published in ARTICLES, MARCH 24, 2024:

[3] “A Conversation with Our CEOs and Trustees — the Lankelly Chase Transition Pathway,”


I thank Saskia van den Dool-Gietman, John Heller, Antoinette Klatzky, and Katrin Kaufer for their feedback and valuable input, as well as a network of interviewees who volunteered their time..

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