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Risk aversion perpetuates the status quo

I have been thinking a lot lately about our tendency, as humans to be risk averse.

We are risk averse because we see our goals as opportunities to maintain the status quo, and to keep things running smoothly. (Harvard Business Review)

Undoubtedly an evolutionary trait, but at what point does it actually decelerate our progress?

The grant-making process has not changed in 100 years. Yes, we have gone from typewriters to computers, but the fundamental process is the same.

Foundations release an RFP and 3,000 nonprofits answer.

Foundation staff read these applications and deploy 5% of their assets.

No more, and sometimes less.

Risk aversion in philanthropy has limited the impact that we can all make, together, as a sector -- foundations and nonprofits working in tandem.

And now, as we enter the “era of AI”, the bigger risk lies in not adapting giving models to reflect the changing times we live in.

Now is the time to think about how AI can help us move forward in a meaningful way.


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