Philanthropy – A Risky Business?

As grantmakers, it is a given in any community investment that there is going to be risk: The question is, how much are we willing to tolerate for the chance at a greater return for our mission?

Brenda SharpePresident & CEO
Back Row: Arif Ahmed, Ph.D., Danielle Jones, Lisa Thurlow, D.D.S., Andy Klocke, Linda Hall, Tom Handley, Heather Samuel, Joe Reuben, M.D., Angela Harse, Jim Sanders, M.D., Brenda Sharpe Front Row: Jon Marshall, Vicki Hohenstein, Dana Abraham, Raymond Rico Not Pictured: Laura Bond, JC Cowden, M.D., Rachelle Styles

REACH Board Chair, Dana Abraham, & President and CEO, Brenda Sharpe

Dana Abraham:  Six years ago, I came to the role of Board member of the REACH Foundation as a professional in the field of financial services and investment management. My background in health and healthcare was limited. However, that perspective, and my sense of responsibility for the financial well-being of the foundation, led me to think about philanthropic risk in terms of not only financial and investment risks that could affect future spending and protection of the foundation’s assets, but also the role of risk in grant making and community investment to achieve long-term impact.

Risk to the foundation’s charitable tax status and governance can be mitigated through accountable governance and management policies, practices and adherence to a transparent process. It is also important to acknowledge political risk in philanthropy when foundations choose to shine a light on issues that some may view as controversial, such as expanding access to health coverage or health care for all people. In those instances, it has been important to me as a Board member to remember that foundations occupy a unique position as independent bodies – governed by leaders and volunteers in the community – to take a stand on the future of our communities. Many REACH Foundation grantees do not have the same luxury given the political environment at the state and local level. Some of these partners face a risk of having their funding, government contracts or even their legal status placed in jeopardy.

The foundation’s Board and staff also have to consider the hazard of not taking any risks. If the sizable philanthropic sector, with its billions in assets and politically connected network of trustees, is unable to take the kind of risks needed to advance social justice and equality, then who will? Exploring this broader concept of risk has been an exciting and gratifying part of my own Board service.

Brenda Sharpe:  When REACH considers a potential investment of a significant scale, we approach our decision from a multitude of risk angles. Our philosophy is similar to how the REACH Board of Directors examines a financial investment in our portfolio— be as informed as possible. As grantmakers, it is a given in any community investment that there is going to be risk: The question is, how much are we willing to tolerate for the chance at a greater return for our mission?

We know that some community investments may not succeed as we would like, so we attempt to mitigate potential pitfalls and determine if we are prepared to see the effort through to the end. As an example, REACH and other health funders made an informed decision in 2010 to invest in public policy and advocacy strategies following passage of the Affordable Care Act. We knew that an investment in this strategy could result in reputational risk because of the diverse viewpoints surrounding the health law. Nevertheless, we discussed the opportunities with the REACH Board and conferred with funder colleagues in our region and nationally, and came to the decision to forge ahead with a number of community investments because of the policy alignment with our mission. Today, our region’s uninsured rates stand at their lowest levels in decades. Now that the ACA is again under attack and declining uninsurance rates approach a reversal, we have to review our strategies and adjust our investments accordingly.

As with any investment opportunity, the quality of the outcome rests largely on the quality of the due diligence and leadership. We rely heavily on the professional expertise of our Board of Directors, staff and partners to inform our decision-making process. We seek out solid organizational leadership; multi-funder efforts; potential leverage for our investment; the opportunity to learn from other communities and states; and the downside risk to our partners and region if we choose to defer on an investment at that time.


Dana Abraham:  When I think about this type of due diligence, I think of grants such as the multi-funder partnership that helped to launch the Alliance for a Healthy Kansas in 2016. That statewide coalition drew hundreds of Kansans together around the necessity of affordable health coverage and addressing the health care challenges for those who fell in the Medicaid coverage gap. The Alliance began as an idea incubated among a group of Kansas health grantmakers in early 2016. It was not clear at the start how much could be accomplished given resistance to Medicaid expansion among Kansas government leaders. However, in 2017 we saw a giant shift in support among Kansas lawmakers because of the Alliance’s effective work and leadership.

The foundation’s investments in closing the coverage gap reinforces for me how much risk there is in doing nothing: The risk of not fulfilling the organization’s mission; the risk of staying silent on issues that have an impact on people’s health and well-being; and the risk to our effectiveness of passing on an opportunity that has been shown to yield tremendous outcomes.

Brenda Sharpe:  Other examples from the past year that come to mind include the foundation’s investments in supporting immigrant and refugee health. More than a year ago, we convened a group of community leaders with direct experience working with immigrants and refugees in our service area to learn about the resources available and the barriers that limited health care access. The group helped us organize a 2017 Summer Series on Immigrant and Refugee Health -- three forums that looked at legal issues, culturally competent behavioral health services, and new tools for promoting welcoming communities. Nearly 300 people attended the series. At the end of 2017, the foundation awarded three grants totaling $160,000 to focus attention and action on eliminating barriers to coverage and care for those populations. This body of work laid a great foundation for future investments to improve health of these highly vulnerable and underserved populations.

Because of the willingness of the REACH Board to broaden its perspective on risk, REACH was able to join a $2.25 million multi-funder investment aimed at voter engagement. The Integrated Voter Engagement Initiative -- IVE for short -- is a three-year commitment we made with the Kansas Health Foundation and the Health Care Foundation of Greater Kansas City to support an initial cohort of 10 organizations to engage disenfranchised residents and voters on issues that affect their health and well-being. This initiative built on earlier “one-off” IVE investments REACH had made in Missouri and Kansas. When we work together, we can accomplish so much more.

In my own leadership role, I am grateful for our Board and a highly engaged staff that challenge and join me in a continuous endeavor for equitable access to quality and affordable health care. Watching from the sidelines as people struggle is not acceptable. I’m proud to say our work in philanthropy is, and will continue to be, about funding change.

We still have a lot of work to do, and more to learn. So we continue to invite your thoughts and ideas for how we can more effectively accomplish our mission. Looking forward to 2018!

Dana Abraham, Chair

Brenda R. Sharpe, President & CEO

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