Trustee boards get in the way of innovation, IFC told

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Trustee boards get in the way of innovation, IFC told 5

Fundraising | Celina Ribeiro | 21 Oct 2011

Risk-averse trustee boards are holding back progress on finding new ways of fundraising, according to fundraisers debating the value of innovation at the International Fundraising Congress.

Charities need to shed these risk-averse ways and prepare to meet new challenges in new ways, delegates heard yesterday.

Kevin Waudby (pictured), who was formerly head of innovation at Cancer Research UK, likened the UK charity sector to the airline industry in the late 1990s, before the likes of Ryanair and Easyjet revolutionised air travel.

“The charity sector in the UK is ripe for reinvention,” he said.

However, because of a risk-averse culture, new fundraising developments and methods were more likely to come from emerging markets rather than mature ones like the UK, Waudby predicted.

Fundraisers and charities suffer from a “fear of failure”, more content to innovate around things that already exist rather than take real risks, Waudby told delegates in Holland.

Waudby was backed by others in the debate, who highlighted trustees in particular as barriers to risk-taking and innovation within fundraising. “Trustees see their role as managing risk rather than setting ambition,” he said.

Waudby, who now runs the agency Good Innovation, said that despite what many charities like to think of their donors, “giving is not that important to most people”.

Yet while it is a low priority, he challenged fundraisers and charities on why they weren't making it easier for people to give. “I think people who aren't giving now want something different from the charity sector,” he added.

Who's Who: Kevin Waudby

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Kevin Baughen
Founder
Bottom Line Ideas
26 Oct 2011

I think there is a double misconception around risk in the context of Trustees:

1) All risk is bad
2) Risk is binary - ie; there is risk and therefore a decision should be bad versus good decisions being ones with no risk.

Neither of these are very helpful day to day, in my experience. As someone who works with many charities trying to help valid, feasible, new ideas deliver real-world benefits and a Trustee it drives me crazy when people perceive all risk as a bad thing!

There are degrees of risk. In the commercial world, these are rated most frequently alongside the potential benefits of making a decision. It's a calculated risk if it's a risk at all.

Life is a risk; we could all go under the proverbial bus tomorrow but yet we venture into the street anyway. All I'm suggesting (possibly in line with Mr Waudby above) is that decision-makers in the third sector should understand risk for what it is; one of the factors to consider when making a decision and one that needs to be rationally examined, not emotionally reacted to.

[Reply]

Ms Moynihan
Director/Senior Consultant
Anne Moynihan Consulting
25 Oct 2011

It's too easy to blame trustees when there is generally low public tolerance of risk. Trustees therefore have the unenviable task of balancing social & economic risks with the risk of blame.

[Reply]

Kevin Waudby
Founder
Good Innovation
2 Nov 2011
Response to [Ms Moynihan]

Hi Anne,

Thanks for your comment. I couldn't agree more with you! And I think this was my point, the role of a Trustee is not an enviable one - they take on a huge amount of responsibility for the good governance of the charity (which, as you rightly point out, comes with the potential for blame), which becomes their focus, rather than setting ambition. Having been a Trustee I have some experience of this. in the current economic climate and given how challenging the fundraising environment has become, I wonder how we can help them focus more on managing fundraising risk rather than avoiding it?

All the best,

Kevin

[Reply]

Richard King
Charity specialist
Tozers LLP
24 Oct 2011

Easy to talk glibly of trustees being "risk averse", as if they should be entrepreneurs, but if by risk you mean risk to a charity's resources or reputation then that is a no-no for any trustee!

[Reply]

Kevin Waudby
Founder
Good Innovation
2 Nov 2011
Response to [Richard King]

Hi Richard,

Thanks for your comment. I think you're absolutely right to point out that a very important role of Trustees is to manage the risks to a charity's resources and reputation. Having been a Trustee myself I completely appreciate this. My point was that managing risk to the detriment of setting ambition is, it seems to me, wrongly structured into the role of a Trustee - they are required to take a lot of responsibility onto their shoulders without a great deal of 'up-side'. Unless checked, I think this can lead to an over focus on managing risk and not sufficient focus on taking (and managing) some in order to grow income.

From my experience in Cancer Research UK, as a consultant in this area and through observing several successful start-ups, entrepreneurs are unlikely to take risks unless they're sure they can be mitigated. I wonder if this mindset would benefit more charity Boards? Rather than being about 'risk avoidance' should they be thinking more about 'risk management'? And particularly in the current economic climate I think we need to help Boards feel more comfortable about empowering their fundraising teams to take some calculated and controlled risks.

All the best,

Kevin

[Reply]

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