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Risk and reward in philanthropy



It’s human nature to be adverse to risk-taking. But like successful business people, many social entrepreneurs believe you have to be willing to take risks to achieve progress.

A widely read example of risk and reward in philanthropy is the story of Greg Mortenson and his painstaking journey to build schools in Pakistan and Afghanistan in the New York Times bestselling Three Cups of Tea. With a typewriter Mortenson wrote 580 appeal letters to potential donors and 16 grant applications in an attempt to raise $12,000, the minimum he needed to fulfill a promise and build a school in a remote alpine village in Pakistan. While his appeals were largely a failure, the difference came with one individual who read a newsletter article about Mortensen’s personal mission, took a risk, and moved fast - agreeing to fully fund the school. Dr. Jean Hoerni made the decision to fund the project after one phone call and Mortenson’s word that he would “not to screw up.”

In the San Francisco Bay Area, another philanthropist embraces the idea of risk-taking in grantmaking. In a new book, Bill Somerville, president of the Bay Area Philanthropic Ventures Foundation (PVF), makes the case that grantmakers should take risks to reap the highest rewards for their investments. Somerville recounts several stories of how a little risk went along way in transforming individual lives and communities – from juvenile courts to classrooms. Published by Berkeley-based Heyday Books, his new book with Fred Setterberg is titled “Grassroots Philanthropy, Field Notes of a Maverick Grantmaker.”

In Grassroots Philanthropy Somerville advocates that grantmakers should find and fund outstanding people, eliminate bureaucracy in favor of moving quickly, focus on ideas and not problems and take risk and initiative. While Somerville’s approach to grantmaking may not be for every foundation, it makes sense for the grassroots as the book title implies. By definition, grassroots movements move quickly and are driven by effective leaders doing hands-on work at the community level. Many of these individuals cannot afford to get bogged down in time-consuming and costly application processes.

In the case of Mortenson’s plight to build schools, a donor’s risk-taking led to the formation of the Central Asia Institute, which has now established 64 schools in remote and underserved regions of Pakistan and Afghanistan. The remote schools have educated over 25,000 children and have provided unprecedented opportunities for girls.

For Somerville and the Philanthropic Ventures Foundation 17 years of nonconformist approaches to grassroots grantmaking has attracted several prominent California foundations as supporters including The California Endowment, David & Lucile Packard Foundation, Flora Family Foundation, Herbst Foundation, and the San Francisco Foundation, among others.

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Gavin Newsom on social innovation

The Stanford Center for Social Innovation recently released a podcast of a talk by San Francisco’s Mayor Gavin Newsom titled Gavin Newsom: Say what you think, then take action. To an audience at the Stanford Graduate School of Business, Newsom talks about leadership and risk-taking, qualities he has been known for since he ordered City Hall to issue marriage licenses to same-sex couples soon after becoming mayor in 2004. His talk at Stanford was two months before the California Supreme Court ruled on May 15, 2008 to overturn the state’s ban on same-sex marriage. Before public service, Newsom started 19 small businesses. Coming from a business-minded background and speaking to a room full of social entrepreneurs, he emphasizes that a risk-orientation is critical for success. “I fail more than I succeed,” says Newsom. But the idea is to “fail forward.”

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Bay Nature launches new Web site

hooded merganser, a Bay Area winter migrant

Now in its eighth year of publication, Berkeley-based Bay Nature magazine recently announced the launch of a new content-rich Web site (baynature.org). While many nonprofits have good stories to tell, Bay Nature now has over 700.

The concept of Bay Nature magazine began as a conversation in 1997 between publisher David Loeb and Malcolm Margolin, author of the much-admired Ohlone Way and founder of Heyday Books in Berkeley. With seed funding from the David and Lucille Packard Foundation and other local funders, the inaugural issue covered by a majestic great blue heron photograph hit local magazine racks in January 2001. Now, just over ten years after that initial conversation, the magazine is one of four programs that make up the nonprofit Bay Nature Institute.

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Getting outside



“Exercise is key to health, and studies have shown that people are much more likely to exercise if parks and opportunities for recreation are nearby,” writes the Trust for Public Land (TPL) in their latest issue of Land & People. For TPL and many other community-focused organizations, the interconnected issues of physical health, getting outdoors and connecting kids to the outdoors, are becoming paramount to their work. These issues are relevant for the land conservation-focused TPL, health organizations like Kaiser Permanente and funders like the Stewardship Council in California. TPL in fact received funding from Kaiser Permanente to build what they call “Fitness Zones” in Los Angeles, particularly in densely populated low income East Los Angeles neighborhoods where obesity is high.

Another organization focused on getting youth outside believes “[c]hildren are smarter, cooperative, happier and healthier when they have frequent and varied opportunities for free and unstructured play in the out-of-doors.” As such, the Children & Nature Network, chaired by Last Child in the Woods author Richard Louv, compiled two annotated bibliographies to research that will tell you just how much kids are not getting outdoors, the consequences and the most promising solutions.

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