By Elaine Gast Fawcett on behalf of ASF
The word risk can have a bad rap in philanthropy.
If you’re like a lot of donors, you may find it tough to think of a grant you could call risky. In fact, most funders have grown accustomed to making grants they know (or at least suspect) will succeed. No one likes to fail. And failure—in philanthropy—means losing money that could have gone to another organization.
Yet, these days, some are saying risk is a value that small-staff philanthropy must embrace.
For example, The Case Foundation has dedicated an entire campaign to encouraging a fearless approach to finding or funding social problems. The idea is that old models move too slowly. To tackle today’s complex challenges, we have to “take risks, be bold, and fail forward.”
That’s inspiring. But what does it look like for small-staff philanthropy to take that kind of risk? One thing is clear: Risk means different things to different people.
Most define risk in investment terms—as in the tolerance for losing money. Others define it in terms of being willing to not get the results they expected. For some, risk means changing their grantmaking from a reactive to a proactive approach. Still others define it in terms of family culture, such as adding a younger generation member to the board.
Often, donors and staff think of risk as making a big splash. That’s not the case, said ASF member Jennifer Astone of the Swift Foundation at ASF’s 2012 National Conference. There’s a lot of innovative work being done quietly. The Swift Foundation funds First Nations and grassroots organizations in British Columbia, for example, and bases the success of its program not on publicity, but on building relationships of trust with those partners.
Astone finds that one way to understand risk-taking is that the donor gives the organization time and support to create meaningful programs and relationships in response to community needs and feedback instead of outside agendas. “I’ve found that often the most creative grantmaking comes from taking risk, which is another way of trusting local decision making. It’s the more intuitive side, the heart side [of grantmaking]. When you are willing to trust leadership, you create the space for listening to what communities really need,” she said.
In spite of the different definitions of risk, there also seems to be some agreement: The more risk there is, the more potential there is for meaningful change to happen. And small-staff philanthropy, because of its modest size and ability to act fast, has a nimbleness that accommodates risk.
And, if it doesn’t work, said Astone, “as a private foundation, you can fail—or you can make mistakes and learn.”
What role does risk play in your grantmaking?
- Failure is not an option. Or is it?
- Tolerate More Risk to Advance Social Change?
- It’s About Trust: Balancing Relationship With Risk in Social Entrepreneurship
Elaine Gast Fawcett helps foundations tell their story, educate their stakeholders, and move their mission forward. For 12 years, she has worked nationally to strengthen the philanthropic and nonprofit sectors as a communications and grantmaking consultant. Originally from the Maryland/DC area, Elaine now lives in the San Francisco Bay Area with her husband Ted and toddler Scarlett. Reach Elaine at firstname.lastname@example.org or on Twitter @4WindsWriting.