Charities need funders to take more risks.

What risk looks like in foundations

Too much caution can narrow the range of people and organisations funded and what that funding can achieve.

A framework for thinking about risk

We developed a framework to help foundations to achieve greater clarity about the different aspects of opportunity and risk inherent in their strategies and aspirations. It offers seven attitudes and aspirations that influence appetites for risk, and have a direct impact on how foundations frame application processes, make grant decisions, manage grants, and make judgements about effectiveness:

  1. Attitude to innovation
  2. Expertise
  3. Clarity and certainty of outcome
  4. Data
  5. Capacity and capability
  6. Financial risk
  7. Public opinion

Case study

Considering your appetite to risk when you have a bold ambition

In 2019, we carried out a learning review of The Queen Elizabeth Diamond Jubilee Trust (QEDJT), which was established in 2012 to mark and celebrate Her Majesty The Queen’s 60 years as Head of the Commonwealth. Trustees decided to dedicate nearly £80million to a five-year strategic programme to tackle avoidable blindness. Across the world, 285 million people are visually impaired, of whom 39 million are blind. Yet 80% of blindness and visual impairment is curable or treatable. Good quality eye care is a scarce resource for millions of people across the globe, including in many Commonwealth countries.

By any stretch of the imagination, this was a bold ambition. The learning for foundations interested in framing their work around a tightly defined goal includes:

  • Understanding and agreeing a foundation’s own organisational needs and expectations is a critical first step in identifying an objective that fits its scale, aspirations and appetite for risk.
  • Recognising and accepting the importance of complete organisational alignment behind an agreed strategy – ‘achieving strategic focus involves giving up everything else’.
  • Building genuine credibility as a contributor ‘beyond the money’ takes time and effort – being present, being interested and being useful all help this process run more smoothly.

This was also a potentially risky initiative. Our evaluation highlighted four key areas of focus for foundations considering their risk appetite and their approach to innovation:

  • Achieving real clarity and agreement – both internally and with partners – about what risk looks like and where it lies, and then being realistic about potential risks and taking care not to overreact; while being ready to take quick, and hard, decisions where necessary.
  • Taking a positive approach to risk management and mitigation, actively seeking access to skills, knowledge and expertise to assist in this task, and deploying these resources effectively.
  • Seeking to create relationships with grantees that enable them to contribute their expertise and have the confidence to share ‘real-time’ information on challenges and risks so that timely action can be taken to deal with them together.
  • In balancing questions of risk and benefit, being conscious of the distinctive freedoms that come with being an independent foundation and being willing to take risks where the potential rewards are sufficiently promising.
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With thanks to Justlife and the Queen Elizabeth Diamond Jubilee Trust/Rob Beechy/Duck Rabbit/Darren James for the photos used on this page.

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