‘Risky business?’ - how can we embrace risk in fundraising?

When a fundraiser hears the word ‘risk’, it is usually followed by ‘rating’, ‘register’ or ‘assessment’. Most of us would agree that our job is made a lot easier if our organisation is considered ‘low risk’; if we’re seen as a ‘safe pair of hands’.

This is not wholly surprising, given how critical the notion of trust is within the charity sector – we are responsible custodians of donor’s resources, and we owe it to our communities to deliver programmes that meet their needs. Over the last decade, public trust in charities has waned, as the sector has been beset by media stories around misuse of funds, CEO salaries or over-aggressive fundraising practices. In response, charities have (rightfully) stepped up, becoming more transparent about their governance and finances, learning how to better communicate their impact and ensuring their fundraising practices are appropriate and in line with regulation.

As fundraisers, we are acutely aware of how important this trust is to help build sustainable relationships. Donors rely on us to evidence the impact of their support; and we must find ways to communicate this in appropriate and engaging ways. We want to be seen as dependable, responsibly stewarding the funding given to us in trust. We also need to be trusted by our teams and boards to secure the resources needed to deliver on our organisation’s mission, helping realise curatorial visions and strategic ambitions whilst covering core costs to keep operations ticking over.

Is this really the right space in which to be taking risks?

We all know firsthand how difficult the fundraising landscape currently is, and how precarious our sector is. The cost-of-living crisis continues to squeeze charities both in terms of its impact on levels of charitable giving and inflated operating costs.

Working for a charity that champions freedom of expression in the arts, the need for our work is becoming more acute, fuelled by polarisation of public discourse and a fractured political landscape. Alongside many other NGOs operating on an international level, we are experiencing heightened competition for funds on a global scale, with trusts and foundations stepping in plug gaps left by the decimation of USAID, thereby diverting funds from potential new grantees. We are fortunate to have a core foundation of supporters who believe in what we do, but as the need for our work grows, we need to find new avenues of support.

Against this uncertain backdrop, taking risks as a fundraiser may appear foolhardy at best, and irresponsible at worst. And yet, the arts and cultural sector is known for being bold and innovative; taking risks is in our DNA. We champion new work; commission cutting-edge art and celebrate initiatives that break boundaries. It is a natural human instinct to be excited by new things.

It is precisely because the funding landscape is so challenging, however, that we need to re-evaluate our attitude to risk. How can we infuse our fundraising practices with the spirit of boldness and creativity typified by our sector without losing the trust of our supporters? How can we learn to embrace risk rather than minimise it, walking the tightrope between bold curatorial ambitions and stable income generation? What could embracing risk look like for a fundraiser?

Build innovation and risk into your strategy from the outset. What would innovation look like for your fundraising practice; and how can it be achieved? By building it into your strategy, could you make the case to ring-fence some budget towards it?
Measure impact. Be clear about what you are trialling and what you hope to find out; bearing in mind the timescales involved. These might not be quick wins, but you will need to demonstrate you are headed in the right direction. What metrics can you develop to help make the case to your board or donors?
Speak to your stakeholders and supporters. They believe in your cause and may be more open than you think. With the right level of communication and impact measurement, they may be willing to take the risk alongside you.
Do your research. Look into new models of funding that may be more suited to risk-taking and think about these could apply to your work. What are others doing in the sector that might work for your organisation?
Speak to fellow fundraisers. It can feel overwhelming, especially as a sole fundraiser, to scope our risky new strategies. Chances are others are thinking of the same thing, and so by pooling expertise and resources we may be able to achieve far more than you can alone.
Develop a clear stance on the ethics of your fundraising practice, with due diligence processes that include well-thought-out risk assessments and planned mitigations.
Get involved in the organisational risk register. Speak to your board and ask the difficult questions – what are you losing by not taking that risk? What are the financial implications of maintaining the status quo?

Confident risk management is a key attribute of organisational resilience; it is not necessarily something to shy away from. Even if they don’t all pay off; the lessons learnt along the way will make us all better fundraisers.