An overview is presented of forces that have shaped how public and private funders approach evaluation, including the challenges that funders, and particularly foundations, face in effectively using evaluation within an organizational learning framework. Even with internal organizational challenges to learning, foundations are increasingly embracing knowledge management and performance measurement as tools for reflection, learning, and accountability. The authors argue that funders must ultimately adopt a more systems-oriented view of their work if they are to effectively use and learn from evaluation, and to adopt both funding strategies and evaluation approaches that are situated in a systems change paradigm. Emerging tools to help foundations incorporate systems approaches in grantmaking are highlighted. (Contains 1 table.)