Risking Honesty
Sometimes you come across an idea that does more than influence you — it becomes a part of you. Fifteen years ago, Jacob Lief and Banks Gwaxula gave me an incredible gift: the idea of ubuntu — that our common humanity is linked, or that “I am because you are.” They showed me the incredible power of this way of living. More importantly, they showed me how this idea could be applied to the context of development. Through ubuntu, we could change our lives, other peoples’ lives, and an entire community. The potential of this idea was palpable. I felt it with every essence of who I was.
Most people in the development sector can relate to discovering their passion, and the risks that came with pursuing it. Take me — I jumped on a plane to Port Elizabeth, South Africa with very little knowledge of the context and the work, and no promise of income. People in this sector take risks because some things are bigger than any one person. For me, the creation of Ubuntu Pathways was one of those things.
Risk is inherent in our stories, lives, and work. Yet very few of us in the social impact sector talk honestly about risk to external audiences. This reality is harmful, and leads to a lack of structure, process, and ability to execute innovative ideas, navigate potential risks, and create global social change.
Open Road Alliance, a funder that provides contingency support for organizations that experience unexpected obstacles, recently conducted extensive research of funders and grantees. They discovered that nearly one in five impact projects are disrupted due to unexpected obstacles during implementation, and yet most funders do nothing in the grant process to plan for what might go wrong. In fact, only 17% of funders set aside funds for contingencies, while 76% do not ask grantees about possible risks at all. On the grantee side, only 23% of NGOs have formal risk management policies and procedures, even though 20% of them encounter unforeseen events that threaten their outcomes.
While both funders and nonprofits agree that about 20% projects will be negatively affected by unexpected events, most of the development sector does nothing about it. Nearly half of the grantees in Open Road Alliance’s research believe that asking for additional funds in the case of project disruption would reduce the chance of being awarded future grants. As a result, nonprofits tend to paint appealing pictures of their work to secure funding while neglecting to disclose realities, many of which are out of their control. We tend to summarize our struggles and journeys, downplaying the complexity of our work. We sell long, grueling journeys as sparkly success stories. We stuff these stories into easily digestible, marketable, and inspiring buzzwords. By scrubbing risk from the conversation, it becomes easy to forget that nonprofits need to take risks, and sometimes fail, before realizing success.
This lack of honesty results in unreasonable expectations of success over short periods of time and strains the funder-grantee relationship, which is arguably the most important relationship for creating sustainable impact. Breakdowns in communication can lead to serious effects. Funders that withhold crucial information about financial support can undermine projects; grantees that do not honestly disclose project risks can lose opportunities to resolve major challenges.
Risk is not an integral part of conversations in the development sector even though we often operate in high-risk contexts and unforeseen events occur regularly — from a major flood in the dry season damaging equipment to exchange rate fluctuations causing a project budget to lose its full value. When we avoid talking about risk, the entire sector’s ability to meet our goals and create sustainable impact is threatened.
Funding development projects is an inherently risky endeavor. But risky endeavors are worth the investment when the potential result is eradicating global poverty. The sector needs to commit to injecting honesty into the funder-grantee dialogue, which is a crucial relationship for producing impact around the world.
It is time for the sector to address risk in a productive way.
Open Road Alliance, Rockefeller Foundation, and Arabella Advisors convened the Commons, a task force consisting of leading practitioners across the development sector, to examine how to manage risk. Together, we created a working risk Toolkit, which contains instrumental advice for funders and grantees. The Toolkit stresses the need for funders to establish a host of risk-management activities into their grant-making practices.
Grantees, on the other hand, need to start to deliberately sharing our strengths, weaknesses, and potential challenges. In order to foster an open dialogue around risk, all nonprofits should commit to conducting and sharing a thorough risk assessment with funders. This includes assessing potential risks and consequences, determining steps to manage those risks, developing alternative plans in the case of project disruption, and creating processes to consistently monitor the status of project derailment.
Nonprofits also need to paint an honest picture of our impact. We need to abandon the harmful practice of inflating numbers to depict massive scale. Let’s talk about what we are really accomplishing by sharing our successes as well as our failures, so that others can learn from our mistakes. Without a true conversation around failure, real learning cannot occur.
Lastly, nonprofits should stop destructive marketing campaigns that highlight unrealistic depictions of success, such as the perpetuated belief that you can “save” a child for $1 a day. These fuel antiquated ideas that people require very little to break the cycle of poverty, instead of honestly sparking the discussions that need to occur about real impact requiring long-term commitments and extensive investment.
Everyone in the sector needs to commit to including risk in our dialogue. Let’s start by risking honesty, and admit that for every story of a successful college graduate, there is a would-be scholar stuck in the cycle of poverty. Most of the sector prefers disruptive and innovative ideas, but we are not creating sufficient conditions to mitigate the risks that will make those ideas work. When the sector acknowledges this disconnect, we can make risk integral to the conversation.
We need to remember that risk is worth it. Let’s go back to why we started this work in the first place, and communicate the truth behind doing development work externally. If development leaders can take risks that transform entire communities, why can’t we risk being honest?
