Whether it involved risks to marginalized communities, to migrants, to residents of informal settlements in megacities, to protesters, or indeed to philanthropy and development organizations themselves, risk was a constant theme of the Bellagio Summit on the Future of Philanthropy and Development in November 2011. It found its way into a whole range of discussions, on the comparative advantages of philanthropy, evaluation, innovation and trust, among other topics.
Comparative advantage and risk
Many participants favoured a systems approach to problem-solving – which can mean mapping the public, private, civil society and community stakeholders, drivers, and barriers affecting an issue before attempting to solve the problem. Most compelling was a shared sense that philanthropic organizations do not live up to their potential to be risk takers in the broad ecosystem of development actors. Many felt that foundations and even new philanthropists are risk-averse and impatient. A more sophisticated understanding of risk and tools for managing organizational and community risk tolerance need to be developed. This might include balancing risk against opportunities, assessing risk at the strategy and portfolio level rather than at the individual project level, and creating a culture where failures can be accepted and seen as sources of learning. For foundations to effectively partner with either communities or development organizations, they must be clearer about their comparative advantages, sensitivities and capacities for risk.
Evaluation and data-driven decision-making
Conversations at Bellagio moved quickly from the need for more data, better evaluation and more transparency to the need for open and honest sharing of knowledge about successes and failures. Recent efforts by USAID, the World Bank and the UK’s Department for International Development to share more of their data were praised, but added to the sense of urgency to make sense of the flood of data and to provide qualitative analysis of the causes of success and failure. There was a shared sense that the current culture of highlighting success stories and pulling a curtain over failures discourages risk-taking.
Among the topics that surfaced under the head of innovation was the question of how to adapt the private sector concept of value chains to philanthropy. In particular, an area suggested for further research was innovation value chains that draw on ideas emerging from communities and individuals rather than organizations and research labs, and the roles development and philanthropic organizations could play in supporting grassroots innovation. There were calls for a greater familiarity with how venture capital and technological innovation deal with risk management, success and failure.
While trust between individuals emerges slowly and depends upon a sense that relationships will survive short-term challenges, funding models (in both philanthropy and development) are often short-term and contingent. Better and more reciprocal feedback mechanisms, longer-term funding and safe structures for reviewing performance and admitting failures are needed. Organizations should also explore a mixed portfolio of long-term, institutional, relationship-building and capacity-building grants and short-term, targeted, performance-driven grants, and find ways to balance the drive for risk-taking with the need to build trust in partner organizations.
The three Bellagio Initiative organizing partners – the Institute of Development Studies, the Resource Alliance and the Rockefeller Foundation – have commissioned a study, based on interviews with 25 leading actors in the philanthropic sector, to better understand foundation perspectives and strategies for managing risk. The Rockefeller Foundation is also considering funding research on the social innovation ecosystem and the role that philanthropy might play in it.
Meanwhile, the fruits of the Summit have been shared by participants at a number of international forums, including the Council on Foundations conference and the Global Philanthropy Forum. Workshops will be conducted later this year at two small-scale forums for new philanthropists from Africa and Asia and at the Bellagio Center. The Bellagio Initiative organizations will continue to seek opportunities to promote development through more effective collaboration and more sophisticated understanding of the interplay of innovation, risk and trust in efforts to promote well-being.
Rob Garris is managing director of Bellagio Programs at the Rockefeller Foundation. Email RGarris@rockfound.org
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