Expanding Your Comfort Zone

Managing Risk in Family Philanthropy

#NCFP15Risk

The Extended Risky Team

Open Road Alliance

• Laurie Michaels, Founder

• Maya Winkelstein, Executive Director (virtual)

Quixote Foundation

• June Wilson, Executive Director

• Lenore and Erik Hanisch, Board Members (hanging out with us)

Arthur M. Blank Foundation

• John Bare, VP for Programs (virtual)

Facilitator • Tony Macklin

Quiz: How do you deal with risk?

Answer three questions on your own – don’t overthink it

Discuss your answers with your peers

#NCFP15Risk

Hidden Biases

Q8: Loss Aversion

- We dislike losses more than equivalent gains

- Same gamble, same result, but different words

Q14: Risk Aversion

- Prefer an assured result over a favorable gamble with same or slightly higher result

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Hidden Biases

Q18: Sunk Cost Fallacy

- Place undue significance on previous decisions

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Organizational Culture and Brand

External Factors

Personal

Hidden biasesDecision styleGiving styleReputation

Funder

Strategy or

Program

“Are we doing the right thing?”

Grant or

Investment

“Due Diligence”

“Grantee Performance”

Risks in Philanthropy –A Starting Framework

Risk Management (Taming Unpredictability)

Risk Management (Taming Unpredictability)

Taming Unpredictability

Identify Assess Mitigate

#NCFP15Risk

Taming Unpredictability

Identify Assess Mitigate

What’s most likely to go wrong?

• Staff & board thinking

• Strategy or program

• Grant

• External

Taming Unpredictability

Identify Assess Mitigate

Probability

Mag

nit

ud

e

Taming Unpredictability

Identify Assess Mitigate

How much influence and control do you have?

How much influence and control does the grantee have?

Taming Unpredictability

Identify Assess Mitigate

Piloting

Contingency planning

Portfolio approach

Open communications and deep relationships

Roy A. Hunt Foundation Example

Trustee Philanthropy Profile Worksheet

1. Stories that shaped his/her giving

2. Top personal values

3. Top personal interest areas

4. Grantmaking style

Roy A. Hunt Foundation Example

Trustee Philanthropy Profile Worksheet

1. Stories that shaped his/her giving

2. Top personal values

3. Top personal interest areas

4. Grantmaking style

Roy A. Hunt Foundation Example

Roy A. Hunt Foundation Example

Studies in Risk

Open Road

Alliance

Quixote

Foundation

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