Risks Worth Taking

Jeff Ubois, Vice President of Knowledge Management at Lever for Change, considers perspectives on risk in philanthropy and how it might be rethought.

One of the surest ways to start a revealing conversation with a donor is to ask them how they think about risk.

Relative to global needs, the funds philanthropists control are small, so it is critical to avoid wasting philanthropic dollars. Sometimes, fear of wasting funds on projects that might fail drives donors to make large—but perhaps unimaginative—awards for projects with tangible, ‘low fail’ outcomes such as new buildings at well-known schools.

At the other end of the risk spectrum, some funders seek breakthrough approaches to global problems whether it is focusing on big bets to truly scale a proven model, investing more dollars in local leaders, or making the decision to combine all of a foundation’s assets into one pot of mission-driven investments. These risk-taking approaches are needed urgently, yet most truly bold projects fail. More than ever, there seems to be a need for bolder philanthropic funding. But the drive to be a careful conservator of foundation money makes it difficult to take chances, and the field, as a whole, is still learning to think about these issues.

Modern, large scale competitions, such as 100&Change, and other competitions managed by Lever for Change, aim to reconcile these concerns—they aim to make breakthroughs of various kinds and to do so, in part, by rethinking risk. And some of the best participants push donors to think differently about the risks that are appropriate to take and about strategies to manage those risks.

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Jill Geiger