May 22, 2008

The Risk & Control Equation

A mentor from a previous chapter in my life taught me about the relationship between risk and control, reminding me when I was struggling with a decision that risk and control go together. He was a masterful deal-maker. And used his experience with risk and control to craft deals that almost always worked to his advantage.

He taught me that a bad deal is when you shoulder all of the risk and have little or no control. A fair deal is when the amount of risk that you experience equals the control that you have. And, the best deal (for you, of course) is when you have little or no risk but have all of the control.

Let's look at how risk and control might play out in a setting that involves funders, a technical assistance organization (aka a gapper organization) and neighborhood groups.

The setting is a conversation with a funder who wants neighborhood groups in her community to embark on specific projects on specific time lines – to produce specific results that the funder feels are in the best interest of the neighborhood groups and the funder's community change agenda. But, the money in the picture goes to a technical assistance provider, not the groups that will be doing the work and producing the results. No grants to the neighborhood groups are in the picture.

In terms of the risk and control equation:
  • The technical assistance provider has most of the risk and no real control. They are expected to deliver but have no leverage with the neighborhood groups other than access to information and good relationship karma.
  • The funder appears to have the best deal - little or no risk and all the control (over the technical assistance provider). No money on the table, no direct relationship with the neighborhood groups that might be at risk, and someone to blame (those unappreciative neighborhood groups or that ineffective technical assistance provider) when things go wrong.
  • And the neighborhood groups? They are actually in a pretty good position. They have control (they can vote with their feet and vanish mid-project) and not much risk. After all, the powers-that-be already believe they are not ready to be at the table, so they're not risking their reputations. And, the project may or may not be the right project at the right time for them - so they're not losing ground on something that is near and dear.

Here we are again talking about the slippery world of "working in the gap". Imagine that you are the Executive Director of this technical assistance organization (the gapper organization), and your funder (and board member, by the way) wants specific results from specific neighborhoods on a specific time line and is expecting you to deliver. What do you do?

  • If you go along with the funder/board member, you can "sell" the funder's idea to the neighborhood groups and, in doing so, be on the dangerous side of the risk and control equation. You are at risk of losing credibility with the neighborhood groups - a growing risk as the neighborhood groups in question grow in capacity and understanding of their own power and authority. And you have no authority (control) to require the neighborhood groups in question to produce those results in that time line....unless you do the work FOR the groups, which would violate the principles of good technical assistance.
  • If you don't go along with the funder/board member, your job might be at risk. After all, your performance (in the board member's mind, at least) is tied to the neighborhood groups in question achieving the expected results in the specified time frame.

Yikes! If the technical assistance provider is successful in the eyes of his funder and delivers the product, he is working counter to his organization's mission (building capacity).

This is getting complicated. But isn't this why the real work of grassroots grantmaking can be harder than it sounds when people couch it in terms of making a few small grants? In reality it's about relationships, trust and distrust, learning curves, comfort levels, risk-tolerance, and differing priorities - with people who often come from different worlds.

So what to do, what to do? Is there a win/win/win here? A situation like this is where a good gapper really shines.

  • A good gapper would recognize the dilemmas and not fall into the risk and control trap that the funder has unknowingly set with all the best intentions.
  • A good gapper would point out that the low-risk path that the funder has charted is really a high-risk path, with a type of risk that is equal to (if not greater than) risking money. What about the risk of wasting every one's time and energy and damaging the credibility of the technical assistance provider with the neighborhood groups? What the funder wants is earnest work on a product that will lead to something. What the funder is at risk of getting is a "sit on the shelf" product plus a reason for neighborhood leaders to look at the next outside-in good idea with more skepticism and less willingness to go along.
  • A good gapper would be aware of and sensitive to the funder's anxiety over making grants to groups that don't fit their normal grantee profile, but not "buy in" to that anxiety. Perhaps the gapper could find a way to tap into the experience of hundreds of funders who are having good success making grants to informal resident-led groups to expand the comfort zone of this funder so that these specific projects on specific time lines can be negotiated as grants to the organizations that are sufficiently interested to step up to the grant table. If that could be done - voila! Everyone is sharing some risk, and everyone has some control.

There is much wisdom out there in the grassroots grantmaking world on the risk and control equation. What do you do when you are in a situation like this - with all of the risk and very little control? What have you found to be helpful when you are working with someone who is holding most of the control cards and is avoiding risk that is necessary for success? The floor is open....


  1. I can't tell you how refreshing this line of thinking is. As the leader of a collaboration of resident-led community-based organizations (most informal), in an underserved neighborhood, I've been told many times "don't bother applying unless you become part of a systemic response to various issues." That of course means we lose credibility and effectiveness. Alternatively, as long as we are resigned to being sorely under-funded, we are the most cost-effective thing going when it comes to sustainable social change here. One question: where are those hundreds of funders who have had success supporting groups like ours. We are constantly on the lookout, and we are splashed across the media frequently, but the connections seem never to be made. This blog, at least, acknowledges there's an issue here...more than most funders - government and private - seem willing to do outside of closed doors.

  2. Thanks for your comment - great that this is hitting home for you and touching on something that you feel merits more discussion. The funders network that I'm associated with (Grassroots Grantmakers) is about furthering a "we begin with residents" approach to funding. We are working toward "hundreds of funders" - our aim is to bring grassroots grantmaking into the philanthropy mainstream. We know some wonderful place-based funders who are really committed to this perspective, and also know that there is growing interest in very local citizen-led approaches to change as the counter-part to larger systemmic approaches. It is very powerful for me (and our network) to hear from you - hope that this is the first of many comments that you will make in the future to share your perspective!