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The Danger of Path Dependence in Philanthropy: Breaking the Cycle for Greater Social Impact

In the world of social investment and philanthropy, the allure of established pathways is strong. It’s tempting to continue funding what seems to work—proven models, familiar partners, and measurable outputs. But this reliance can create a path dependence feedback loop, where early funding choices lock organizations into reinforcing the same approaches, limiting innovation and excluding alternative models that could yield better results.

In South Africa, nowhere is this more evident than in Early Childhood Development (ECD). Despite overwhelming evidence that the first 1,000 days of a child’s life are critical, entrenched funding habits have led to inequitable access to early learning opportunities, with rural and township communities particularly affected.

Let’s unpack the dangers of path dependence in philanthropic giving and explore how working with organizations like GrowZA can help funders reimagine their approach and achieve greater impact.


Understanding the Bias: The Risk of Comfort Over Change


Path dependence occurs when historical decisions and investments narrow the range of future choices. What starts as a practical decision can snowball into rigid institutional frameworks that resist change. In philanthropy, this shows up as:

  • Repetitive Funding Cycles: The same organizations receive funding due to their track record, even if their model has reached a point of diminishing returns.

  • Preference for Large-Scale Solutions: Small, local initiatives may be overlooked because they don’t fit the standardized reporting models required by funders.

  • Inertia in Strategy: Over time, the philanthropic strategy becomes less about innovation and more about sustaining legacy programs, even as social needs evolve.


Case Study: Early Childhood Development (ECD) in South Africa


The Problem: Historically, philanthropic investment in ECD has focused on building formal ECD centres and early learning hubs. This approach made sense in urban areas with access to infrastructure, government support, and high enrolment. However, rural and informal communities—where children are often cared for in homes or small playgroups—were left behind.


The Path Dependence Loop:


  1. Legacy Investments: Funders prioritized formal, centralized ECD centres, pouring resources into buildings, staff, and curricula.

  2. Exclusion of Informal Networks: Informal caregivers in rural and township settings—often the only available providers—didn’t fit the “traditional” model and were unable to access funding.

  3. Institutional Inertia: Once infrastructure-heavy ECD projects became the norm, it became difficult for donors and policymakers to pivot, despite evidence that decentralized models could reach more children at a lower cost.


Breaking the Loop: The Ilifa Labantwana Example: Ilifa Labantwana challenged the formal ECD approach by piloting community-based ECD models, providing mobile support, training caregivers, and building play-based learning networks. Their success demonstrated that informal ECD systems, when properly resourced, could achieve significant impact in vulnerable communities.


The Way Forward: A New Approach to Philanthropy

To move past path dependence in philanthropy, funders must embrace adaptive models that prioritize local expertise, experimentation, and dynamic program design. This is where working with impact-driven agencies like GrowZA becomes essential.


Why Partnering with agencies like GrowZA makes sense:


  1. Holistic Program Design: GrowZA develops investment programs grounded in development theory, ensuring that interventions address systemic challenges and have sustainable impact. For example, their support for local ECD playgroups isn’t just about delivering services—it’s about building capacity within communities.

  2. Agile Monitoring and Evaluation (M&E):Traditional M&E models often require rigid benchmarks that favor large organizations. GrowZA uses adaptive M&E frameworks that capture qualitative and quantitative data, making it easier to fund smaller, decentralized initiatives without sacrificing accountability.

  3. Inclusive Partnerships:GrowZA believes that communities are experts in their own needs. By partnering with grassroots organizations and local stakeholders, they ensure that investments are both culturally relevant and scalable.

  4. Pragmatic Innovation:GrowZA doesn’t advocate for change for the sake of it. Their programs balance bold experimentation with practical, evidence-based interventions. This approach helps funders avoid the risk of “innovation fatigue” and ensures that new models are tested and refined before scaling.


A Call to Action for Philanthropic Leaders


Path dependence in philanthropy isn’t just a theoretical issue—it has real-world consequences. When funding habits become entrenched, marginalized communities are the first to suffer. Yet the solution isn’t necessarily more funding—it’s smarter funding.

By working with partners like GrowZA, philanthropic organizations can break free from outdated models and co-design investment programs that are:


  • Evidence-based and forward-looking

  • Inclusive and community-led

  • Sustainable and adaptable


South Africa’s challenges—especially in ECD—demand bold action. Funders must be willing to step outside the familiar and engage in new partnerships that empower local actors, drive systemic change, and deliver real impact where it’s needed most.


It’s time to reimagine what social INVESTMENT looks like. The future of philanthropy depends on our ability to resist the pull of past decisions and embrace a more dynamic, responsive approach to social investment.


This is how we #GrowZA

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