Risk and failure lie at the heart of social innovation. Time and time again, social entrepreneurs have shown us that finding a creative space – to experiment, make big mistakes, fail, and then readjust – is essential to developing powerful solutions to the most pressing social problems. Our most effective learning comes from confronting and understanding big mistakes.
Entrepreneurs from Thomas Edison to Wendy Kopp have stressed the important role failure has played in their eventual success. Yet, the social sector has not fully embraced that failure is a part of a healthy development process. The sector doesn’t typically invest in it, and we are still hesitant to see organizations and social entrepreneurs engaging with it.
We are indeed acting in a resource constrained environment and it can seem like admitting failure is tantamount to acknowledging that you wasted needed funds. But eliminating risk means eliminating the opportunity to make long-term systemic change. Often this tendency comes from a pressure to meet immediate needs. While these needs are critical and should be served, there is an important place for risk-taking. Taking risks – for the right reasons and with the proper planning – is an essential element of creating transformative change in our communities.
That is why I was heartened to see the recent “Gaining Perspective” report from the Northwest Area Foundation (NWAF). The report provides an honest reflection on NWAF’s ten-year (1998-2008) and $200 million “bold new approach” toward pursuing its mission of helping communities reduce poverty. It shines a light on both the successes and failures of the approach.
NWAF should be recognized for taking risks and pursuing creative, new opportunities especially in an era before social entrepreneurship and social innovation had become big buzzwords. There is much we can learn from NWAF’s experience, and we would do a disservice to ourselves and our constituents if we didn’t aggressively pursue any and all opportunities to absorb the knowledge gained from others’ experiments!
A few key takeaways from the report:
- Develop a clear strategy prior to implementation.
- Do not be afraid of risk. Do plan carefully to mitigate risk.
- Articulate clear objectives and identify how and what long- and short-term indicators you will measure.
- Understand the environment and the market. Involve the communities and people served in planning.
- Plan resource allocation carefully.
- Pilot the work.
It’s exciting to see that these takeaways mirror a number of the core tenets Community Wealth Partners has developed, alongside our partners, in the pursuit of achieving financial sustainability. The experience of the Northwest Area Foundation serves as an important reminder that these same tenets apply both to nonprofit organizations and to major philanthropic initiatives and programs.
It’s exuberating to see Foundations taking the lead in this arena. Another great example of Foundation risk-taking is Anne E. Casey’s current work on talent in the social sector. As a 2011 “big bet,” the Casey Foundation has set out to prove that talent is a critical driver of social outcomes, and investment in talent matters to solving our most pressing social problems. And they’ve committed to sharing their learnings throughout.
I hope that our community continues to share our successes and ours failures. It’s hard for a large organization, especially a foundation, to put its reputation on the line and reveal its missteps and mistakes. But such organizations often have the most resources to investigate, analyze and share their learnings. If the social sector opens itself to failure and to sharing, perhaps we can collectively “risk better” to create transformative and positive change.