Risk with Vision
placing informed big bets

Philanthropy undertaken with big vision requires an appetite for big risk. The promise of success is almost always accompanied by the potential for great failure. Philanthropy that is able to accept high risk in the pursuit of a bold vision may well be the transformative mechanism that a highly pressured society requires.

Investing in bricks and mortar




Too often philanthropy is intimidated by what is happening in the country. If there is one important thing we can learn from international philanthropy it is a robust independence and the need to sometimes take on difficult and necessary political challenges.*
Russell Ally, Executive Director, Development and Alumni Department, University of Cape Town
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The Big Bet: Philanthropy and Risk


Philanthropists who combine a powerful vision with a high tolerance for risk have the potential to effect bold, game-changing difference. However, a high tolerance for risk also bears an equally high probability of failure. In a society where the demand on the philanthropic rand is genuinely acute, philanthropists find it increasingly difficult to support high-risk ventures that seemingly come at the cost of alleviating fundamental social difficulties. Yet, philanthropy that is able to accept high risk in the pursuit of a bold vision may well be the transformative mechanism that a highly pressured society requires.

The prospect of bringing about systemic and pioneering change in society is the key motivator for durable philanthropic investment. Philanthropy expends funds on seeking solutions for complex social dilemmas. However, social problems are not one-dimensional. The factors that influence their establishment and perpetuation are numerous, complex and often intricately connected to frameworks of politics, economics and privilege, to mention only a few.

Philanthropy that supports social change is always faced with choices that require the weighing up of risk against potential achievement. The risk of not achieving change, despite the application of extensive resources, is perhaps the greatest risk that philanthropists face.

This refers to impact risk, the assessment and management of which is a critical component of a successful philanthropy programme. The possibility of failing to achieve change that is proportionate to the investment made, remains one of the most important considerations for philanthropists when selecting grant destinations if they are to feel that their giving is impactful.

You do your homework. You look into every aspect of these organisations. You look at their leadership, finances, how they are perceived, the quality of their plan and what other donors think. You make sure that the political landscape makes it feasible for them to do what they say they will.*

Martin O’Brien, Former Senior Vice President for Programmes, The Atlantic Philanthropies
Assessing and managing risk

Impact risk is defined as the risk that the impact that is achieved, relative to the level of investment, will be significantly smaller than expected, or not achieved at all. Impact risk has two components, namely:

  • Strategic risk – the risk of failing due to the pursuit of a strategy that has been developed with inadequate understanding of the environment in which the philanthropist or Foundation operates. It is the risk that the philanthropy’s desired outcome is being pursued through a faulty or inadequate strategic plan
  • Operational risk – the risk that failure will result because of unsuccessful processes, people or systems, or unforeseen external events, despite adequate support and appropriate planning

Few philanthropy organisations are perceived as risk takers. Despite being in the business of giving money away, in general philanthropy has a surprisingly low tolerance for risk. The appetite for risky investments in philanthropy has tapered off as business and global economic difficulties have changed how philanthropy thinks about identifying and selecting investments.

Despite the fact that philanthropy does not have the same pressures of financial return on investment, as do government and business, it nevertheless has become extensively metrics-driven in its grantmaking direction and evaluation of outcomes. Philanthropy has become somewhat mired in technical measurement, and this has translated into grantmaking that channels funds in the direction of guaranteed outcomes.

In South Africa the last two decades have produced extensive political and social change. Despite being a democratic and right-based dispensation, the country still faces enormous challenges in regard to poverty, unemployment and equitable access to quality services in education, water and sanitation, and healthcare, amongst others.

The continuing urgent demand on philanthropy to fund short-term palliative programmes has caused local giving to veer sharply from more audacious ventures, to more charitable forms of giving that focuses on the immediate needs of a persistently distressed society.

Philanthropy with strong vision and a high tolerance for risk needs people and organisations with which it can develop powerful relationships. This requires that a bond of confidence and trust is developed between all of the parties and that the nature of the relationship is equal.

Risk with vision requires funders to be able to imagine, with their grantees and beneficiaries, a difference that requires bold interventions. Audacious projects such as, for example, the construction of multi-million rand buildings, support for legal action, or assistance to emerging grassroots organisations that have little infrastructure and under-developed operational frameworks, do not have certain outcomes.

By eschewing the safety of the known, this kind of philanthropy has the ability to profoundly advance the lives of people who suffer acute disadvantage and marginalisation. This is philanthropy that places big bets that prevail over time. It is also philanthropy that sometimes fails to achieve those ends. The ability to manage the big vision together with high impact and possible high risk, is the hallmark of strategic social philanthropy.

An appetite for risk

The Atlantic Philanthropies approach to risk combined a strong vision with confidence in the ability and knowledge of the people working in the areas that they wished to influence in order to construct their own futures.

Driven by the principle of a fairer society, especially for the vulnerable, Atlantic’s work in South Africa focused on human rights, reconciliation and population health. The South African Constitution and the precepts of a thriving constitutional democracy served as the guiding framework for Atlantic’s points of entry and encounter in these programmatic areas.

Programmes that focus on human rights and social justice have elements of risk, particularly for an international funder. The risks of being seen as meddlesome or facing political resistance are always present. Vision accompanied by knowledge-gathering that relied on convincing research and genuine partnerships, ensured that Atlantic entered into its fields of choice with sensitivity and flexibility, and by funding with conviction.

Atlantic’s cycle of due diligence prior to making investments, its confidence in grantees and activists with whom it partnered, and emphasis on a cycle of open engagement rather than stringent evaluation frameworks, have produced extraordinary gains.

In order for philanthropists to achieve systemic change they must be prepared to take on the audacious projects and the big bets.

Unlike business and government, philanthropy has both the means and relative freedom to select and support projects that do not, necessarily, have easily quantifiable or proven outcomes. Risk in this sense is not foolishly chasing dreams merely for the sake of the dream, but rather an informed leap of faith that, if successful, will produce tremendous benefit and springboard significant change.