Ethos Foundation operates using a spend down endowment – a pot of capital donated by the foundation’s founder Grant in 2021 to tackle UK child poverty. This endowment has a mandate to be completely spent by 2036.
In 2025, Ethos Foundation was eleven years out from its endowment spend-down deadline, and we spent time forming our final (and only) ten-year strategy to help us maximise the impact of our resources during this period. ‘Strategy’ can be a nebulous concept, so we wanted to capture what it means to us. This is how we at Ethos formulated a strategic direction.
Our starting point was:
- Our small size – four (now five) Board members and one (now two) member(s) of staff;
- very few formalised operational processes; and
- a partnership portfolio with less than ten active funding agreements.
These factors allow us to work in a very agile way. We ran a strategy development process that felt proportionate and in line with this position, alongside our business-as-usual philanthropic work. Trying to move as fast as possible to action also felt right for a strategy with a ‘systems change’ lens. Our mission is about influencing forces outside of our direct control, therefore the quicker we can get out in the world testing our (likely imperfect) assumptions with those we hope to influence, the better.
For us, a strategy was about deciding ‘what’s out’ as well as ‘what’s in’ as we think one of the biggest risks with approaches to systems change is strategic drift and spreading much too thin to have impact beyond ourselves.
Finally, we wanted to operate a strategy with a ‘strong view, loosely held and widely tested’ about what changes we hope to see in the world by our end date, and our role and route get there. This is so that we had something to anchor into, test and iterate, and to hold ourselves accountable to, as we operate within a complex system.
Step 1. Build around action. Strategic thinking is so much easier when it can be hooked to something real. Ethos had already been operating for eight years in 2025, without staff. The bulk of its work had been co-founding, helping develop and sustain three charities, alongside lots of smaller donations. We had also commissioned New Philanthropy Capital to develop a research report about the systems shaping child poverty.
With a new Foundation Director on board (me!), we started by reflecting on this work -through lots of conversations internally and externally. Some themes started to emerge, including:
- The partner charities that Ethos had co-founded are all purpose-led ‘connectors’ of money, activities and people, rather than single solutions. They all use bounded local geographies to operate. They all have innovative and collaborative models, drawing on different types of investment streams and connecting policy- and people power. We realised that our USP had been a focus on ‘systems glue’.
- Ethos has always practiced trust-based philanthropy. We have to date donated funds through multi-year unrestricted grants to brilliant mission-aligned organisations and leadership teams. The Ethos Board had also used the other resources at their disposal; time, experience and institutional power, to crowd in support and remove barriers to partner scale and sustainability of impact. We wanted to keep operating in this way.
- Our current partnerships span a wide range of issues and we ourselves didn’t yet have a specific overall vision for long-term impact. We wanted to narrow our focus, without losing the north star of tackling UK child poverty.
- Our spend-down mandate gives our capital particular leverage power. We not only have a set of monetary resources, but we have it to spend now. It is the flexibility, rather than the size, of our capital that is the quality we wanted to lean into even further.
Step 2. Make explicit what else has already been decided. The mandate to spend down is formalised in our Investment Policy (our only starting policy); it sets a clear remaining time horizon for Ethos’ work: 2025-2035. Other decisions were implicit in Ethos’ communications but needed spelling out:
- ‘Systems change’: we defined this as the aim for Ethos’ actions to influence others in a way that has transformative impact, beyond our own organisational resources and lifetime.
- ‘Place-based’: we believe in starting small and thinking systemically. We wanted to prioritise work that was built up and tested within local geographies, with a route to national systems influence.
- ‘Staying small’: as we are spending down, we won’t grow Ethos’ permanent workforce beyond 5 during the next ten years.
- ‘Early childhood’: we will focus down on tackling UK inequalities in outcomes for young children, pregnancy to age 5.
These decisions all have practical implications. A ten-year time horizon gives a deadline to our work. Our impact management approach (ie.what we, together with partners, measure and communicate) should feel much more like an influencing- than an evaluation strategy. Staying small means that we need to focus on fewer larger bets and leverage. The focus on implementation means we are unlikely to commission research unless it has a specific link to our partnership work.
Step 3. Set out the key questions, roles, and ‘spirit’ of the process. We borrowed two strategy development questions often used in corporate consultancy: ‘Where are you going to play?’ and ‘How are you going to win?’. I like these questions because they force boundary setting in two areas which are easy to leave much too ambiguous: the limits of the system in which an organisation can practically operate, and defining exactly what OUR unique contribution could be within that system. The competition frame speaks to something we don’t want to forget: systems are about flows of power.
We wanted to run an agile process that was as practical as possible – we didn’t spend a long time with different theoretical frameworks of systemic change, but rather on spelling out what change might look like in 2036 and our specific contribution and broad roadmap to get there.
Step 4. Develop a testable proposition that is good enough to start. We clarified internal roles in relation to the strategy. The Foundation Director (me) was responsible for putting forward a strong proposition, with explicit trade-offs for the Board of Trustees. This was for the Board – ultimately responsible for Ethos’ work – to agree or amend. Colleagues from Systems Shift acted as an external thought partner, support with development material and facilitator of a strategy Away Day, to help add both capacity and independence to our small team collaboration.
We agreed a strategy – a vision, mission, goals and activity – that was clear to us and good enough to start testing through our operational channels.
Step 5. Build operations that make the strategy real. Because we are a very small team and Board, our time feels precious. We want every operational mechanism to be incentivising us to do in practice what our strategy says we will do in theory. We started with our budget; setting initial budget envelopes against our new strategic buckets in line with what we had said we wanted to prioritise. We defined our stakeholder universe, the (transactional and relational) nature of different relationships and the ask-offer within each, with strict limits to how many relationships we could hold. We wrote some simple Financial and People policies that emphasised our mission – for example, we offer an enhanced benefit package for returning new parents. We also agreed to put a child-lens on our invested capital, to ‘sweat’ impact from money waiting in the wings to be donated during our organisational lifetime.
We built these in a non-linear way; as soon as one operational process was designed, we started testing it, whilst designing the next ones.
Step 6. Set up feedback loops. We wrote down the assumptions inherent in our strategy. These are what our partnership conversations would center around; looking for alignment, challenge and opportunities for shared learning. We decided each year our ‘impact report’ will be a newsletter spelling out: what we believe more than ever; what we have changed our mind on; and what we have refined. In this way, we hope to build up a ‘case for change’ that is increasingly robust and aligned to an increasingly large coalition or partners and allies.
Step 7. Continuously and humbly improve! Six months into our next ten years and we haven’t written a ‘strategy document’ but we are operating against our agreed vision for systemic change. We have refreshed our brand and communications strategy but have only just updated our website. We’re still thinking about our governance and convening mechanisms. There’s lots we have iterated already based on how it succeeds or fails when we tried to use it internally and within external partnerships, including the language of the strategy. At the end of each year, we will set out the ways in which our partnership activity has reinforced, challenged or adapted our assumptions to date.
In short, we hope to make the most of our endowment’s last ten years through a strategy that is hypothesis-led, lean, and iterated in collaboration with partners and always with a view to influence something bigger than ourselves.
Sarah, February 2026
