Funders often talk about taking ‘good risks’ but how clear are we about what that actually means? IVAR’s Funding Risk Tool is a practical tool to help funders:
- Start a conversation about risk in grant-making within your organisation;
- Define and articulate your attitude to risk in grant-making;
- Ensure alignment between your grant-making practices and your attitude to risk;
- Consider how taking better risks might help you to achieve more effective grant-making.
Designed to support the commitments of Open and Trusting grant-making, the tool encourages funders to be clearer, more realistic, and more intentional in how they approach risk.
How to use the tool
The tool aims to be comprehensive about risk in grant-making, but if you’re just starting out it could be used to initiate conversations about risk internally as well as to review changes to risk attitudes and grant-making practices over time.
You can use this tool as an individual, with your grant-making team, or with your wider organisation, discussing and comparing your responses as you complete the questions. It is intended to prompt reflection and discussion and not to be used comparatively with other funders.
Why it’s important
The freedom of independent foundations to take risks in grant-making is a vital to effective social action. But funders’ desire to embrace ‘good risk’ can easily become mired in confusion and anxiety. Evidence suggests that, without a greater shared understanding of what funding risk looks like and who carries it, many efforts to mitigate risk are misdirected and much of the social value of risk-taking unrealised.
To fully implement the eight commitments at the heart of the Open and Trusting approach, we need funders to be clearer and more realistic about their attitude to risk in grant-making and more balanced in their attempts to manage it.
