Lisa Jordan’s challenge to embrace risk in organized philanthropy reminded me of a quote from technology writer Esther Dyson (who used it as a tagline on her email) – ‘always make new mistakes’. Dyson, daughter of famed physicist Freeman Dyson, suggests that we should not only embrace risk but also learn to ‘fail fast’, then make more mistakes quickly to steepen the learning curve.
One arena where I’ve seen a refreshing approach to risk in philanthropy is with operating foundations – or hybrid social enterprises like limited liability low profit corporations (L3Cs) in the US, including the various enterprises created by eBay founder Pierre Omidyar. Writing in the Harvard Business Review, Omidyar recently described his own failure in first establishing a private foundation, and then realizing that he would be able to take more calculated risk and potentially reap more social benefit by utilizing formal analytics in the way venture capitalists analyse business opportunities.
Similarly, real estate investor and venture capitalist Marcel Arsenault is analysing risk in new ways (new for philanthropy anyway) by establishing operating foundations to tackle wicked problems of governance gaps that can lead to deadly violence and war. The Arsenault Family Foundation dovetails its grantmaking strategy with two operating foundations, the Secure World Foundation, which promotes cooperative solutions for space sustainability and the peaceful use of outer space, and the One Earth Future Foundation, which is developing its own internal professional capacity to tackle global problems like maritime piracy.
These socially concerned businessmen have been through a tough process of venture enterprise development that has made them wealthy beyond their imaginations, and now they are using the lessons they have learned to apply a more advanced understanding of risk in social change philanthropy. They may fail, but I appreciate their willingness to help us learn.
Founder, Global Greengrants Fund