Why philanthropy needs to change its conception of risk.
The way philanthropy operates in America needs to change, said Alexandra Toma, the executive director at the Peace and Security Funders Group, a network of funders who tackle international security issues.
This is especially true now, as the coronavirus pandemic and nascent arms races threaten to upend global stability, while political unrest at home continues to hamstring an effective government response.
“What funders can do is focus on the root causes of all of this upheaval,” said Toma in an interview on the podcast Press the Button. And in order to do that, they will need to dramatically reshape their conception of risk.
She explained that one of the more notable trends in the peace and security field today is the shift away from traditional, established institutions and toward more localized, grassroots movements that focus on everything from nuclear proliferation to climate change. “It’s just someone in their community observing a wrong and trying to make it right,” said Toma.
However, many of these smaller initiatives remain unfunded. In part, this can be chalked up to the limits of practicality. Individuals or small groups working on peace and security issues almost by definition do not have the same reach and clout as larger universities or think tanks, she explained. And even if they are found, the frequent lack of a standardized process for transferring funds can create serious obstacles in the way of cash flow.
But there’s another, larger factor at play: risk. Foundations and wealthy individuals are often far less willing to “take a shot” on startup projects using unproven methods than they are to approve traditional grants to the same-old partners.
Toma suggested that this reluctance can best be explained by one factor: reputational fear. Older foundations, especially many family foundations, worry that failures will harm their founder’s legacy or waste the resources that remain in their endowments.
To Toma, this mentality gets it all wrong.
“The term ‘risk’ is funny to me,” she said. “What is the risk? Failure? Big deal. That’s the point. That’s why you have these opportunities as a foundation—to take risks. To do things we can’t do with taxpayer dollars.” She pointed out that while there are legal restrictions around what types of projects can be funded, philanthropy’s caution goes well beyond it.
“The thinking itself needs to shift.”
One way to do this would be to gradually increase the proportion of a foundation’s grantmaking budget that is allocated to unconventional projects. “Let’s say you spend one hundred dollars. Take a little part of it and try something different,” said Toma. “Perhaps it’s that guy down the street that was organizing, or it’s that woman across the way.”
“You have to think, ‘We don’t know what’s going to happen, but we’re going to invest it,” she continued. “It might not work.”
Toma was quick to point out that there are already some people in the field who think this way, most obviously the handful of big tech philanthropists who have less of a problem with the unknown. “That’s the beauty of having Silicon Valley funders in the community,” she explained. “Because they made their money taking risks, and that’s the way they approach philanthropy.”
But in the patrician world of storied foundations and their decades-old endowments, this attitude is certainly not the norm. And when it comes to solving major issues of peace and security today, said Toma, that is a shame.
“If we don’t take risks, we’re going to be doing the same thing over and over again,” she explained. “We’re going to find ourselves in the same place one hundred years from now, because we’re not going to get at the root causes of these cycles of violence.” In her eyes, grappling with these global challenges will require all of the weapons in a foundation’s arsenal—not just traditional methods.
“It’s the famous Einstein quote: just doing something, again and again, is the definition of insanity,” said Toma. “Everyone should be very uncomfortable right now on so many levels. Let’s catapult that into grantmaking.” And, ultimately, the best way to do that is to change the ideas around risk.
“Unless you fund something that is illegal, the risk is in your head,” she remarked.
“So, take risks. What is it going to cost you?”
The entire interview with Alexandra Toma is available here on Press the Button.
Zack Brown is a policy associate at Ploughshares Fund, a global security foundation.
The National Interest
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