Philanthropy and Risk

Absent the pressures of a ballot box or quarterly earnings reports, the philanthropic sector has the unique ability to adopt a long-term perspective and to take risks that other sectors may avoid. And yet our sector is often accused—sometimes rightly—of being risk-averse.

Last year, Barr’s trustees affirmed “embracing risk” as one of the Foundation’s core values, but that begs the question: what does that mean for Barr’s work? Determining how we animate that value has been one of the recurring themes during our planning process this year. And core to that conversation has been the reminder that we are not risk seeking. We are impact seeking. To take risks should never be a goal unto itself. Our goal is impact, and what we embrace is a willingness to take smart risks on the ideas and partners with potential to reach ambitious goals.

In discussions among Barr’s staff and with our trustees, we came to three core conclusions about risk and its application to Barr that I want to share as part of our continuing blog series on Barr’s strategic planning process:

Ambitious goals require risk and will surely bring failure

When it comes to pursuing big ideas, we believe the paths to success will require risk and a comfort with failure. Indeed, we will view the presence of failure—either of individual grants or even larger initiatives that do not achieve intended outcomes—as a potential indicator of there having been sufficient ambition and risk-taking in the work. We will therefore encourage and support our partners to be ambitious and bold, ensure we are providing them with the resources to achieve aspirational goals, and accept that some results may fall short of our shared intent. At the same time, as my colleague Phil Buchanan, president of The Center for Effective Philanthropy, has rightly noted, foundations need to be conscious of the costs our failures may impose upon the intended beneficiaries of our work. Therefore, we must strike the right balance and avoid the trap of focusing too much on risk and, in the process, burden the very people it is our mission to serve.

The only failure we won’t accept is a failure to learn

When there is failure, we cannot accept a failure to learn, either from work with our partners or from our own efforts. If taking risks will require accepting some failure, in order to benefit from those experiences, we must commit to a mindset focused on learning, and we must be willing to share lessons broadly. Doing so will not only improve our efforts, and those of our partners, but it can help others understand what works and what doesn’t as we seek to elevate the arts for more vibrant, vital, and engaged communities; advance solutions for climate change; and expand educational opportunities. Recognizing that foundations do not routinely talk about failure, we intend to identify opportunities to contribute to this important dialogue.

Our reputation matters, yet we cannot shrink from putting it on the line

Finally, we appreciate that one important dimension of risk relates to Barr’s reputation. In our formative years, the Foundation always chose to stay behind the scenes. Yet, with a focus on some of the most pressing challenges of our time, we are committed to deploying the full range of tools and assets at our disposal—including, at times, our reputation and voice. Acknowledging that our partners are the ones doing the heavy lifting, and never chasing attention for its own sake, we firmly believe that selectively using Barr’s voice, activating our networks, and exercising our leadership can matter to the issues and causes with which we are engaged. We will not leave those tools unattended.

This means that Barr will sometimes speak out, even on controversial issues, and even when doing so risks negative attention or backlash. The key consideration for us is no longer the possibility of negative attention, but how confident we are that our position—grounded in thoughtful strategy, aligned with our values, supported by credible information, and oriented toward solutions—can accelerate the impact we seek.

This outlines some of our early thinking about the role of risk at Barr. It will surely evolve and become more concrete as we outline and execute upon our new strategies in 2016. Consistent with the theme of this blog series on Barr’s strategic planning, we are sharing these reflections to provide greater transparency about various facets of our work.

But there are two other important reasons to share these ideas now. First, we are eager to ensure that our partners understand how we think about risk, so that we can have productive conversations about our work together. Second, we want to be held accountable to these aspirations. Where we fall short, we hope to be reminded of these expressed intentions so that we can adjust accordingly.

Needless to say, this is a work in progress for us. We continue to welcome your reflections, reactions, and suggestions, which I know will ultimately serve to improve Barr’s work and our ability to fulfill our mission of service.

Jim Canales on philanthropy, risk, and learning from failure: