Funding Governance for Systemic Transformation — r3.0 Blueprint #8 — Introduction
This is part 2 of a series of Medium articles on r3.0’s newest Blueprint, released on September 6, 2022, at the 9th r3.0 International Conference in Amsterdam and online. This second part covers the Introduction Chapter. The full version of the Blueprint can be found here.
Introduction
With the growing recognition of multiple, interrelated crises affecting both human society and Earth as a whole, proposals for systemic transformation based on “regenerative” principles and patterns are emerging as the means for responding to systemic breakdowns and the prospect of civilizational collapse. New funding from investors, governments, and philanthropists is beginning to flow rapidly into this “regenerative” domain. As this happens, we face a challenge in allocating this money towards work that truly supports positive systemic transformation, rather than greenwashed initiatives rooted in “business-as-usual” paradigms. We propose that regenerative funding governance methodologies and practices are required in order to ensure that regenerative outcomes are achieved at systemic levels.
Generally, mainstream funding practices focus on project-based and program-based rather than systemically transformative interventions. Furthermore, funding entities are embedded in the existing economic system, which is organised around perpetual growth and the provision of financial returns to the holders of accumulated wealth. As a result, entrenched conflicts of interest inhibit transformational ambitions. At the same time, there is growing mainstream recognition that our systems have been corrupted by moneyed interests, that there are massive systemic inequities and an unrepaired legacy of harm from the violence of colonialism, racism and other systems of oppression, and that economic activities driven by the search for short-term profits are pushing the biosphere to the brink of collapse.
Whether or not the institutions that dominate the allocation of funding in current systems are capable of transforming to address these failures is hotly debated. Some argue that the rapid shifts in energy, food, water, and other systems that are required to prevent environmental collapse can only be accomplished in a timely manner by institutions that are currently in place. Others maintain that this is a lost cause, and that we must support alternative structures to replace those that are systemically failing. Similarly, there is disagreement about the scale at which regenerative work can, and should, be organised, with many arguing that global change requires institutions operating at very large scales. Others see local and/or bioregionally-based initiatives as the primary pathway towards regeneration, and believe that such practices can “scale out” to meet global challenges. Some believe that civilizational collapse is highly likely because none of these pathways will effectively address the crisis we face, and believe we should focus our efforts on adapting to that reality. Finally, there are those who do not attach themselves to just one of these scenarios, eschew arguments about which is more likely, and find value in an “all of the above” approach. In this Blueprint, we have not taken a stand on these questions. Rather, we have explored principles and practices that we believe can foster a systemic shift towards regeneration in any of these contexts.
Regenerative design thinking suggests that “nothing comes into existence without resistance,”[1] and we do hold out the possibility that, despite appearances, we might be as close to positive tipping points towards regeneration as we so clearly are to negative ones towards collapse. What is also clear is that the systems that dominate our current funding landscape are not focused on resourcing the desired future so many in the regenerative movement are working towards.
In the Three Horizons framework developed by Bill Sharpe and the International Futures Forum, this desired future [2] is referred to as “H3,” and the current paradigm is termed “H1.” The messy transition space of “H2” lies in between, characterised by both generative initiatives that support the evolution towards H3 (H2 “plus”) and exploitative ones that simply seek to profit from the collapse of H1 (H2 “minus”). While this framework appears to suggest a simple progression over time, we recognise that reality is far more complex, and that regenerative approaches embrace complexity and non-linearity. We did not plan from the outset to centre Three Horizons, and the fact that it took on such a prominent role in our work reflects the “aliveness” we experienced as we played with it, even when that generated resistance and criticism.
It is our hope that this Blueprint contributes meaningfully to the task of distinguishing between principles and practices that embody H2+ and H2- in the domain of funding governance — something we believe to be critical during this time when money is increasingly being allocated to initiatives that claim to be “regenerative.”
An important message of the Three Horizons framework is that elements of H1 will continue to be valuable and thus persist into H2 and H3. Within the overall domain of funding governance, there are two aspects of H1 that are “elephants in the room,” namely the use of markets for the allocation of investments and of government social spending programs for the allocation of support to meet basic needs. While some aspects of governance for both these forms of funding might evolve into H2 and H3 iterations, we are not here to suggest that this must necessarily be the case, or to explore those possibilities. For example, taxation, cap and trade, feebates, health and safety regulations, and antitrust enforcement are all part of the H1 arsenal for addressing market failures resulting from the exclusive pursuit of profit. Much good can be accomplished with the effective implementation of these tools. Similarly, a robust social safety net (including universal basic income and/or services) can address many of the failures and inequities of a market-driven economy, not to mention making it possible for many more people to pursue the spiritually fulfilling work of regenerating the human and more-than-human world.
However, funding allocation for something beyond profit or the meeting of basic needs — something transformational – requires a different kind of discernment, and that is the focus of this Blueprint. What are the principles and practices that allow us to choose wisely among investments with a “triple bottom line,”[3] if we are to ensure that profits are only extracted once people and planet have benefited sufficiently that the net effect is regenerative? Or among initiatives competing for grants and subsidies based on claims that they offer the most regenerative impacts? And how do we integrate all the various forms of funding available to us into approaches that are truly systemic? These are the kinds of questions that the Blueprint “Working Group”[4] of approximately thirty people gathered from February-July 2022 to explore and write about.
The Blueprint opens with a critique of the funding governance systems that characterise the “business as usual” paradigm, along with two “negative” case studies that support it. Following that, we offer a “case for regenerative funding governance” and a preliminary take on a set of “patterns” that can be used to evaluate existing funding allocation practices, and to design new ones. Next we explore a set of “positive” case studies, followed by the results of actionlearning activities undertaken by Blueprint Working Group teams. These are sources of insight into regenerative (and extractive) governance practices. They also serve as a test of the patterns we identified as well as the idea that the fuller development of a “pattern language” would be valuable. We conclude with a set of recommendations, visions for possible transitions from H1 to H2 and H3 funding governance systems, and an invitation to engage in ongoing work to support inquiries and initiatives in service to regenerative funding governance.
Rather than attempting a comprehensive or systematic survey, our process was based on an invitation to Working Group members to explore the aspects of funding governance that were most meaningful and interesting to them. When more than one person resonated with a particular inquiry, teams were formed. A “social system map” was used to support and track this self-organising process. [5] This approach meant that we left many gaps in our inquiry. An exploration that was both broad and deep was beyond our capacity, and so we chose to go deeper into a few select areas rather than engaging in a broad exploration that might have struggled to move beyond generalities.
As we shift into post-blueprint work, a group of us is committed to building on what we have done in order to fill in gaps and continue lines of inquiry and action that look promising. These include developing a full pattern language of regenerative funding governance, expanding the set of case studies that are explored as examples of funding innovation, and supporting ongoing action-learning to work at the growth edges of this funding governance domain. We invite interested funding institutions to support this ongoing work and to take part actively in our continued learning journey.
It’s worth noting at the outset that our use of the term “regenerative funding governance” has generated some confusion and pushback. Some of this we can address, and some we accept as coming with the territory we have chosen to explore. “Funding governance,” as we are using it here, refers to the set of practices and principles that we are exploring. Proxies include “the governance of funding” and “funding allocation decision-making.” This is distinct from “the funding of governance,” i.e. providing financial resources for the people and processes involved in decision-making generally. There is overlap in the case of providing funding to support governance that is specifically about where money should go, which we highlight as requiring sufficient resourcing for the process to be regenerative. [6] But our domain does not include governance that is not primarily related to funding allocation.
While we are clear on the distinction between “funding governance” and “the funding of governance,” we are choosing not to present definitions of the terms “regenerative,” or “regenerative funding governance.” The former has been explored by many others, [7] and the term has now entered the popular lexicon. The latter is our own coinage. We have simply declared the concept of “regenerative funding governance” to be our guiding star regarding systemic transformation in the funding domain, and launched into our inquiry from there. Like all things “regenerative,” we hope that the term takes on a life of its own, and evolves in dynamic relationship with the complex ecosystem of work taking place in the field we wish to serve with this Blueprint.
Finally, we want to call out the fact that this document is largely the work of people of European descent who are based in the Global North. The writing reflects that perspective, albeit from a critical stance towards our history. Our audience includes those who are currently empowered to make funding decisions, as well as those who are designing structures within which others will allocate funding. We are eager to continue this work with a far more diverse team, while also leery of extracting the time and knowledge of people who bear the brunt of the harms caused by the systems we wish to see dismantled and replaced. The most important thing in this context is to diversify the ranks of those who are involved in funding governance itself, as opposed to those who are simply writing about it, and we do lift up the work of some people who are in that first category. Perhaps, given that we share a similar background of privilege in many respects, our team is well-positioned to carry this message to some of the people who currently dominate the funding world. Convening such conversations will be one of the tasks for the group that is forming to work on “post-Blueprint activation.”
Notes:
[1] This is based on G.I. Gurdjieff’s “Law of Three,” which has been popularised as a core pattern for regenerative design. Pamela Mang of the Regenesis Institute describes this in a 2020 interview with Daniel Christian Wahl: “So, one force is usually what’s the activating or affirming force, what gets something started. The other force which meets it on the same plane is the receptive force or the receiving force. And it’s like, if we live in what Gurdjieff called ‘a 3rd force blind world,’ that’s it! We just go back and forth and build force or end up compromising down. But in the three forces, there’s a third force. That’s the reconciling. And that is the one that if we can appreciate both of the restraining and the activating force hold that cognitive dissonance and really appreciate what is the purpose behind each. The way this works is that a third force comes in. It’s like we create space for the reconciling force.” https://designforsustainability.medium.com/setting-a-field-for-potential-to-manifest-ea8720c046da
[2] The International Futures Forum website has a comprehensive section on the Three Horizons: https://www.iffpraxis.com/threehorizons. For purposes of this paper, we have drawn on the “commons of shared practice” based on the Three Horizons framework provided at https://h3uni.org/. The diagram on this page (and the ones used in other sections of the Blueprint) can be found in the Resources section of their website along with a tutorial on the framework: https://resources.h3uni.org/tutorial/three-horizons/.
[3] John Elkington, who coined the term “triple bottom line,” now sees its meaning as having been watered down such that its transformational implications have been lost, and he has thus “recalled” the term. https://hbr.org/2018/06/25-years-ago-i-coined-thephrase-triple-bottom-line-heres-why-im-giving-up-on-it
[4 ] See the list in the Acknowledgments section of this report.
[5] This map view shows how the group divided up across all the various activities that emerged: https://kumu.io/ben-roberts/r30-bp8#main/case-studies-plus. The map also contains information about working group members and their connections with one another.
[6] This contrasts with an extractive approach to “the funding of funding governance,” where people are asked to provide free labour to support the funding allocation process. The most common form of this extraction is the process of seeking funding itself, which consumes enormous amounts of time and energy that could instead be spent doing the work for which funding is being sought. Other examples include onerous requirements for reporting of outcomes and unfunded advisory roles given to community representatives in order to extract grassroots input on decision-making.
[7] For definitions of “regenerative,” See, for example, Bill Reed et al, Moving beyond green: towards regenerative development (https://thefifthestate.com.au/columns/spinifex/moving-beyond-green-towards-regenerative-development/) The Regenerative Business, Carol Sanford (Nicholas Brealey, 2017), Daniel Christian Wahl, Designing Regenerative Cultures (Triarchy Press, 2016), The Capital Institute’s “regenerative economics” framework (https://capitalinstitute.org/regenerative-capitalism/), Paul Hawken, Regeneration (Penguin Books, 2021), and Galen Meyers, The Qualities of a Regenerative System (https://medium.com/the-regenerative-transition/the-qualities-of-a-regenerative-system-38d7ac10b9b3).
Earlier parts of this series:
