The Big Lottery Fund commissioned Diana Leat to write a discussion paper exploring the nature of risk and how it applies to the business of grantmaking.
- Grantmakers can give out their money in different ways according to their goals, values and priorities. Associated with the whole process are various inherent risks.
- Voluntary organisations such as foundations may see themselves as risk-takers but are not always clear or consistent about what this means. In any case, rather than seeking to anticipate every risk or danger, it may be a more effective approach to develop the capacity to respond resiliently to untoward events and to learn from experience.
- Foundations have great freedom in the way they distribute their funds. Different types of risk can be addressed by grantmakers in different ways. For instance, checks and controls can be increased, although by reducing potential harm, benefit is likely to be reduced too.
- The effective grantmaker must thus make choices in its strategic decisions, the way it operates and how it manages its relationships. Risk is ever-present, comes in different forms. All grantmaking is a matter of choices and trade-offs, with all options carrying both negative and positive risks.
Source: The Big Lottery