Muhammad Babangida discusses why risk is so important in philanthropy.

1. Why Risk Is
Necessary In
Philanthropy
Muhammad Babangida

2. Itissadtonotethatphilanthropyisnotasimpactfulasit
shouldbe.Thisisduetomanyphilanthropistsbeingafraid
tobeboldandtakerisks.Manywanttosticktothe
traditionalformofphilanthropyofgivingoutfundswithout
creatingmeaningfulimpact.

3. Also,thereisnoopendiscussionaboutriskin
philanthropy.Intheworldofphilanthropy,calculatedrisk
isessential.Philanthropistsinvestmoneytoachieve
specificresults.Andjustlikeanyotherinvestment,
thereisaninterplaybetweenriskandreturnin
philanthropy.

4. Thereisasystemfailureintheworldtodayinthatphilanthropists
donotgettheimpacttheyintend.Forinstance,MacKenzieScott,
theex-wifeofJeffBezos,maynotachievephilanthropy’ssocietal
impacteventhoughshemakesconsiderabledonationsto
organizations.

5. Why?Evenwithhergoodintentions,MacKenzieScottis
conservativewithherapproach.Shefallsintotheregular
donationsratherthanfundanunconventionalideathatshehas
passion.Herdonationscutacrossorganizationsfightingracism,
climate-sensitiveorganizations,andpro-democracygroups.She
maybecreatinganimpactbutnottotheextentthecolossal
donationsshould.Shecandomuchmore.

6. Scottisnottheonlyonetakingthistraditional
philanthropyapproach.Others,likeJackMaandLarry
Ellison,havefollowedsuit.Don’tgetmewrong,there’s
nothingwrongwiththeirintentions.However,theycan
achievemuchmoreimpact.

7. Youmightbewonderinghowtheycandothis.Donorscan
disruptthephilanthropyworldthroughcatalytic
philanthropy.Thisapproachisdifferentfromcharitable
donations.Itgoesbeyondwritingacheque.The
philanthropistgoesamilefurthertoresearchthesource
oftheproblemfacingsociety.Insteadofpouringmoney
intotheproblem,thephilanthropistestablishestheroot
causefirst.That’sresultsinusingthepowerofmoney
responsibly.

8. Catalyticphilanthropistsdonotignoretheaspectofrisk.
Otherwise,thiswouldjeopardizetheimpactoftheirfunding.They,
however,assessandmeasureriskvisavisthereturnoftheir
donations.Thisstrategicphilanthropyembracesriskthrough
progressiveriskmanagementsystems.Withthisapproach,they
developdisruptivesolutionstotheworld’schallenges.

9. Towrapthingsup,philanthropyisnotassimpleasjustgiving
donations.Untilrisk-takingbecomesthenorm,philanthropistswill
missthechanceofmaximizingimpact.Riskisaboutbeingquick
andreactingtotheenvironmenttoprovidecustomizedsolutions.

10. Thanks!
@MBabangida_
MuhammadBabangida.org
MuhammadBabangida
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