Philanthropists should focus on gains, not losses – report

Billionaire philanthropist Bill Gates speaks at a pledging event for GAVI Alliance. Photo by: Ben Fisher / GAVI Alliance / CC BY

Philanthropy can be a risky business, just like in the private sector. Wonder how Bill Gates does it?

report commissioned by the Rockefeller Foundation and Resource Alliance reveals that philanthropists, especially those coming from the private sector, are “not willing” to take too much risk. In fact, some philanthropists engage only in projects where the outcome is “certain.”

This can be a problem in the long run, with philanthropists gearing toward projects with a high probability of success. But what can be done to solve this problem? The report lists several recommendations for entrants to lower risks or be braver in tackling difficult projects.

In assessing risk, philanthropists should focus more on the gains than on the losses. They should “invest time” in learning about the project they are getting themselves into and avoid comparisons.

Meanwhile, in terms of managing impact risks, the report encourages philanthropists to engage with people who share the same philanthropic interest or work in the same field to help guide their decision. It also urges philanthropists to take a market-oriented instead of a sales-oriented approach. This way, they will learn more of communities’ needs.

As for managing operational risks, the report says “support networks” will be of help to philanthropists. Learning needs to take place at the organizational level too.

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About the author

  • Jenny Lei Ravelo

    Jenny Lei Ravelo is a Devex Senior Reporter based in Manila. She covers global health, with a particular focus on the World Health Organization, and other development and humanitarian aid trends in Asia Pacific. Prior to Devex, she wrote for ABS-CBN, one of the largest broadcasting networks in the Philippines, and was a copy editor for various international scientific journals. She received her journalism degree from the University of Santo Tomas.