Accepting risk in funding practice

A discussion paper

This discussion paper is based on a review of academic and practitioner research evidence.

The freedom of independent foundations to take risks has long been celebrated as a vital and distinctive contribution to effective social action. But funders’ desire to embrace ‘good risk’ can easily become mired in confusion and anxiety – with a fear of failure attached.

The paper highlights a responsible approach to accepting what risk looks like. We also look at power being a resource which gives funders so much more choice than charities and explore how ultimately, when risk isn’t taken, this constrains charities and funders ability to do their best work.

Being averse to risk is a continuous barrier to meeting number three of the eight Open and Trusting commitments:

Open and Trusting commitment 3: Accept risk
We will accept our share of risk – we will be realistic about how much assurance applicants can reasonably give us; we will clearly explain how we assess risk when we make our funding decisions.

Supporting this research are some key quotes, including: ‘There’s no such thing as zero risk, it’s just how you manage it’ and ‘funders have broader shoulders, we should shoulder more.’


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