In the social sector, foundations and NGOs were required to think about the level of risk they were willing to take and how they could manage that risk, noted panel facilitator Professor Stephen Cheung. Taking up this point, the speakers opened this plenary discussion by commenting on what they saw as key drivers of the risk they faced.

Mr Michael Berkowitz, President of 100 Resilient Cities, which was established by a US$170m grant from the Rockefeller Foundation to make 100 cities around the world more integrated, inclusive and forward looking, spoke about the inevitable political risk his NGO faced. Corruption and other challenges were impossible to escape when problems of this scale were being taken on, he said, because they involved such a large and diverse range of stakeholders.

The drivers of risk could also be at a more strategic level for foundations, believed Ms Elizabeth Knup of the Ford Foundation. She cited as an example her organisation’s recent decision to invest its endowment capital in impact investing.

Several speakers described the long-term and intangible goals of their work as a source of risk. Impact was often difficult to measure, they agreed, and as a result it could be difficult to know if their approaches were working. Foundations and NGOs should respond by thinking carefully about the short-to-medium-term outputs that they chose as proxies for real impact – a task that could often be challenging, given the amount of uncertainty that existed in this field.

Mr Rip Rapson added to these points by saying that when thinking about risk, foundations must make sure the risk taken was proportion to the impact results in question. Discussing what drives risk, he argued that risk for foundations was a direct product of their partnerships. When working alone, their risk tended to only be financial, i.e. the money that could be lost. However, that level of risk grew significantly when they were partnering with private or public sector groups, as reputation risk for everyone involved came into play.

The conversation then turned to how the social sector should manage risk. Various speakers implied that part of the answer was simply a shift in mindset. Failure could happen but that did not need to derail your impact journey. Mr Berkowitz cited an example of a relationship-building effort by 100 Resilient Cities in Senegal with local politicians that created significant publicity, only to be followed by those politicians becoming embroiled in a corruption scandal.

He and other speakers recommended that all foundations and NGOs focus on being transparent when taking part in risky ventures, both in terms of how they went about their work and the outcomes they were hoping to achieve. Mr Rapson said that foundations were often at fault here, because they demanded transparency and accountability from their grantees that they did not practise themselves.

Another important way to manage risk, he said, was by collaborating deeply. Partners could be used as sounding boards for ideas, and their expertise was often a useful way for foundations to self-regulate their strategic decisions. However, both Mr Rapson and Ms Knup said the cost of collaborating tended to be much greater than people expected. Building relationships and involving multiple stakeholders in decisions could be extremely time consuming.