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“Risk”

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risk2After that first blog, I’ve had a lot of good feedback, some of it offline so be sure to pipe up and post your comments online too!

One thought that Garrison Kurtz’s (www.thrivebyfivewa.org) post raises for me is this issue of “risk” and what it means in a nonprofit / philanthropic context.  SVP was asked to submit input for an upcoming issue of Alliance Magazine (www.alliancemagazine.org), which is a very good publication covering international topics. The magazine issue will address risk from a number of angles, including: Do foundations actually take risks as they claim to be able to? How are these risks assessed?  What are the reasons for taking risks (innovation is only one of them)? Do systems for measuring performance and/or impact limit innovation and risk-taking?

Risk: it’s a term that has lots of different meanings and contexts. The piece SVP submitted to Alliance begins like this … “Words like “risk,” “innovation,” and “outcomes” get bandied about by for profit and nonprofit management and boards alike.  The for profit world has defined and measurable parameters for risk.  Understanding risk and how it affects a business can be measured—the service or product either makes money or it does not. In the nonprofit world, risk, measurement, and outcomes are more ephemeral—we aren’t as sure what failure is because we don’t have as clear a method to measure success. If we are unsure of how to measure success, it is difficult to assess risk.”

And is risk even relevant when the ultimate purpose is more positive social outcomes, whatever the risk? I wonder what others think about risk – how you define it, what it means, how you use it?

Paul S

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