Understanding Risk Tolerance in Grantmaking

Understanding decision-making patterns is the first step toward improving them. We know that despite best efforts to act rationally, human tendencies to avoid risk and loss while seeking certainty and gain can impact sensible decision-making. Research has demonstrated this phenomenon across many facets of our society—including finance, consumer products, and even golf. Given our professional and personal interest in the social impact sector, we considered whether these factors could affect the world of philanthropic foundations as well. How does risk impact—and potentially harm or benefit—our decisions when it comes to grantmaking?

Click here to read the complete article from the Stanford Social Innovation Review.