Steinberg et. al's Four-Sector Advantage Framework (SAF)

Core Concept: Sectoral Advantage Framework (SAF). Developed by Richard Steinberg, Eleanor Brown, Liza Taylor, and Teresa Harrison, SAF is a theoretical model that generalizes the classic “three-failures” sector theories by incorporating four sectors of society: the market (private sector), the state (public sector), the nonprofit/civil society sector, and the family/household sector (Sector Theorists Should Expand Three-Failures Theory to Include ...). Instead of focusing on what each sector fails to do (as in market failure, government failure, etc.), SAF emphasizes each sector’s comparative advantages in addressing societal needs. It provides a structured framework to analyze why a given activity or social problem is best handled by a particular sector (or a combination of sectors) and “which sectors are the best homes for these activities” (). Key elements of analysis include defining the set of sectors, the nature of the problem, criteria for evaluating performance (e.g. efficiency, equity, scale, trust), the domain/context of the problem, any structural constraints, and relevant theoretical lenses ().

Sectoral Focus: By “adding the family sector” to the traditional triad (Sector Theorists Should Expand Three-Failures Theory to Include ...), Steinberg et al acknowledge that households and informal community networks play a vital role alongside nonprofits, businesses, and government. Their framework suggests that many functions (such as caregiving, community organizing, or small-scale mutual aid) might be most effectively performed at the family/community level, which earlier theories of sector failure often overlooked. They also refine how we view the public sector by recognizing “varied forms of government” (e.g. local vs. national) in addressing failures (Sector Theorists Should Expand Three-Failures Theory to Include ...), rather than treating “government” as a monolith. Overall, the four-sector advantage theory encourages looking at cross-sector collaboration and optimal alignment: it asks “why [certain] activities occur in particular combinations of sectors” and how to determine the ideal sectoral partnership for a given challenge (Remarks from Richard Steinberg, recipient of the 2023 Distinguished Achievement Award - ARNOVA). This marks a shift from zero-sum thinking (where sectors compete or step in only when others fail) toward a positive-sum view where each sector’s strengths are harnessed in concert.

Four Axes of Capital Allocation Framework

4_Axes_of_Capital_Allocation__1741195744.pdf

Core Concept: The Four Axes of Capital Allocation is a strategic portfolio framework for wealth stewards (e.g. philanthropists, impact investors, foundations) that delineates four complementary investment focus areas (link). This approach, developed by Indy Johar and Irina Wang (2021), is aimed at deploying capital “beyond ROI” to drive systemic change and resilience (link). The four axes – Frontier, Resilience, Transformation, and Systemic Solidarity – represent distinct yet interdependent dimensions in which capital can be allocated for maximal collective impact (link). Rather than siloing philanthropic efforts, this framework calls for parallel engagement on all four fronts to “move beyond fragmented efforts and embrace a systemic approach to capital allocation”(link). The axes can be summarized as:

• Frontier Axis – Exploration & Long-Term Innovation: Investing in the far-horizon ventures that expand humanity's options and push the boundaries of possibility. Frontier investments fund breakthrough sciences, technologies, and visionary projects (e.g. interplanetary exploration, radical life extension) to "transcend systemic boundaries" and build a "species-level safety net" for the future (link). This is the ultra-long-term, high-risk/high-reward end of the portfolio focused on survival and discovery.
• Resilience Axis – Safeguarding the Present Systems: Strengthening the capacity of current social, ecological, and economic systems to withstand shocks and stresses. Resilience investments fortify foundational infrastructure and communities to be "anti-fragile" in the face of "accelerating volatilities like climate change, resource scarcity, and political instability", with the goal of preventing existential risks or "societal collapse" (link). This axis anchors the portfolio in addressing immediate and near-term systemic risks (climate adaptation, disaster preparedness, etc.).
• Transformation Axis – Systemic Change & Transition: Accelerating the shift of our economic and governance systems toward sustainability and equity. This axis funds efforts to "internalize externalities" and rewrite the rules of the game – for example, pushing carbon pricing, new metrics beyond GDP, or innovative policies and business models that correct market failures (link). Transformation investments bridge the gap between present resilience and future frontiers by reforming institutions and values, essentially laying the groundwork for a regenerative economy that can sustain both the Earth and ambitious future endeavors.
• Systemic Solidarity Axis – Social Cohesion & Safety Nets: Ensuring no one is left behind during turbulent times. These investments build "robust networks of mutual support, emergency response, and social safety nets" to protect the most vulnerable (link). The Solidarity axis recognizes that despite preventative efforts, crises will occur; thus society must be prepared to respond compassionately and maintain trust. Funding in this area might support disaster relief systems, community mutual aid, equitable access to healthcare, or policies that uphold the social contract during downturns. By *"strengthening our collective bonds"*amid disruption (link), this axis upholds societal stability and legitimacy, which in turn enables the other axes (transformation, resilience, frontier) to progress in an inclusive way.

Importantly, the Four Axes framework stresses that these categories are interdependent, not independent silos. Each axis complements the others: "Frontier" pulls us toward possibilities, "Resilience" keeps us secure in the present, "Transformation" builds the bridge between present and future, and "Solidarity" holds society together throughout the journey (link). Rather than choosing one approach over another, wealth stewards are encouraged to allocate across all four axes in a balanced manner, coordinating them "in parallel to maximize their collective impact"(link). This integrated portfolio approach is presented as crucial for systemic resilience and regenerative transformation, especially in an era where relying solely on market returns or government action has proven insufficient (link). It is essentially a call for "integrated wealth stewardship" (link) – aligning philanthropic, market-shaping, policy-influencing, and community-strengthening capital towards a resilient and just future.

Overlaps and Synergies between the Frameworks

Despite coming from different angles – one an academic sector theory, the other a practical investment strategy – the four-sector advantage theory and the four-axes framework share a notable common vision of systemic, holistic change. Key overlaps include:

• Moving Beyond Silos: Both frameworks argue against isolated, single-sector or single-approach solutions. Steinberg et al.'s SAF explicitly promotes a "focus on cross-sectoral alternatives" and combinations, rather than viewing government, market, or nonprofit action in isolation (). Likewise, the Four Axes approach urges philanthropists to work on multiple fronts simultaneously, rather than funding one type of initiative at a time. It notes that the axes "are not isolated or competing priorities; they are interdependent components" of a unified strategy (link). In essence, each approach calls for integrated action: SAF integrates across sectors; Four Axes integrates across issue domains. Both reject zero-sum thinking in favor of collaboration and complementarity.
• Systemic Change and Resilience: Ensuring systemic resilience is at the heart of both perspectives. SAF is fundamentally about finding the right structural home for solutions so that they can scale and endure – implicitly, a system functions best when each sector does what it excels at. This can be seen as a design for resilience: a robust society where family, state, market, and civil society each reinforce the others' efforts in their areas of strength, minimizing overall failure risk. The Four Axes explicitly targets systemic resilience: one axis is even named "Resilience" and another "Systemic Solidarity," and the whole framework's goal is to "hedge against near-tail risks" and address "interdependent crises like climate breakdown, economic volatility, and democratic erosion" in a coordinated way (link). Both frameworks understand that tackling today's complex challenges (from climate change to social inequality) requires multi-faceted, system-level responses rather than piecemeal fixes. They converge on the idea that no single sector or strategy alone can safeguard the future – it takes a portfolio of efforts and actors working in concert.
• Role of Philanthropy and Cross-Sector Collaboration: The two perspectives each acknowledge that private wealth and philanthropy can play a catalytic role in areas where markets or governments struggle. The Four Axes paper explicitly frames itself as a "call to Wealth Stewards" to deploy capital in ways that "step in where markets and governments fall short" (link). This echoes the traditional rationale for the nonprofit sector (to fill gaps left by market and state) and indeed aligns with Salamon's interdependence theory. Steinberg et al.’s theory modernizes this notion by providing a blueprint for how and when such cross-sector stepping-in should occur. For example, if a certain challenge (say, a new public health threat) is not being met because of government inertia (a government failure) and lack of market incentive (market failure), SAF would analyze whether nonprofits or community action have a comparative advantage to address it – or whether a partnership (public-private, etc.) is optimal. The Four Axes framework would simultaneously encourage a philanthropist to fund, say, a Resilience initiative in public health (strengthening health systems via nonprofits and local communities) and a Transformation push (advocating policy change in government for better preparedness). In practice, both approaches promote cross-sector partnership: wealth stewards using the Four Axes will inevitably find themselves funding different sectors (e.g. grants to nonprofits for solidarity safety nets, program-related investments in social enterprises for transformation, support for public-sector innovation labs for resilience, etc.), embodying the SAF principle of putting each task in the hands of the actor best suited to it.
• Holistic View of Value: Another subtle overlap is how each framework broadens the definition of returns or success. The Four Axes framework talks about expanding beyond direct financial returns to include "relational and systemic returns" like strengthened institutions and mitigated existential risks (link). Similarly, the Sectoral Advantage approach moves beyond narrow economic efficiency to consider qualitative criteria (social equity, trust, voluntarism, etc.) when judging which sector should lead an initiative. Both imply a more nuanced value system for evaluating interventions – one that accounts for long-term societal benefit and moral considerations, not just short-term profit or simple cost-benefit. This alignment in values underpins their synergy: SAF provides the logic for why a wealthy donor might choose a nonprofit or community-led solution (due to trust or equity advantages) even if a market solution exists; the Four Axes provides the imperative to actually fund that solution as part of a balanced portfolio for the public good.

Differences and Tensions

While complementary in many respects, the two frameworks have different focal points and can exhibit some tensions or contrasts in perspective:

• Analytical Theory vs. Action Framework: Steinberg et al.’s four-sector advantage theory is primarily an analytical tool – a way to understand and evaluate the roles of sectors. It doesn’t inherently prescribe specific actions without a given context; rather, it offers a method to determine the best sectoral mix for a problem. In contrast, the Four Axes of Capital Allocation is a prescriptive strategy for a particular audience (wealth stewards). It is essentially a playbook for how those with capital should allocate funds across predefined categories. This means the SAF is broad and conceptual (meant for scholars and strategists to diagnose sector roles), whereas the Four Axes is pragmatic and targeted (meant for donors to structure their portfolios). As a result, SAF might analyze a scenario and conclude, for instance, that public sector leadership is optimal for some aspect of resilience (say, building flood defenses) due to scale and authority, even if a philanthropist is ready to act. The Four Axes approach, on the other hand, might encourage that philanthropist to invest in resilience regardless – perhaps by funding innovative prototypes or advocacy to nudge government action. Tension point: the four-axes framework pushes private action into arenas that SAF might traditionally assign to government or the market, which raises questions about the proper long-term locus of solutions.