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George Soros Takes a Risk

September 09, 2010

(Bradford Smith is president of the Foundation Center. He wrote about diversity and philanthropic freedom in his last post.)

Human-rights1 Philanthropy is innovative, invests in long-term solutions, and take risks, right? Isn't that what we always say when called on to explain why foundations should be independent, free from excessive regulation, and not told how to spend their money? On Tuesday, George Soros walked the talk with a $100 million grant to Human Rights Watch.

The fact that the Soros gift should seem remarkable is, in itself, remarkable. Despite claims to the contrary, philanthropy in general is quite risk averse. In 2008, the largest share of grant dollars went to Health (23 percent) and Education (22 percent). Within each of these areas, some risky grants were made. Any donor who has chosen to fund reproductive health is well aware of the political firestorm that can erupt around that issue. Likewise, the first donors who funded charter schools were roundly criticized for breaking with education reform orthodoxy. But much philanthropy in these areas goes to wealthy alma maters and major hospitals. That is to be applauded; the American system depends on the generosity of donors for these institutions to thrive, but it would be a stretch to say such grants are risky.

Human rights is definitely risky business. By picking Human Rights Watch, George Soros has opened himself to criticism that he is betting on an organization some have accused of having a double standard when it comes to reporting on Israel's role in Middle East conflicts. The AP story on the Soros gift talks about this and the readers' comments below hardly read like fan mail. Human rights, by definition, holds governments accountable for measuring up to the high standards of the Universal Declaration of Human Rights. Human Rights organizations are a thorn in the side of governments everywhere, exposing illegal detention and torture, crimes against humanity, and political repression. Any donor that decides to support human rights can be guaranteed that somewhere in the world, including the U.S., somebody in power will be unhappy with the work their grantees are doing. In extreme cases, the lives of those they are supporting may be in danger.

Because human rights is risky business, it is particularly well-suited to philanthropy. We know who the big human rights funders are: George Soros' own Open Society Institute, the Ford Foundation, Atlantic Philanthropies, the MacArthur Foundation, and European-based funders like the Oak Foundation and the Sigrid Rausing Trust. But how many foundations support human rights work, how much do they spend annually in doing so, and who gets the money? Together, the Foundation Center and the International Human Rights Funders Group plan to answer those questions. By coming up with better definitions of what constitutes human rights philanthropy, applying them to existing data, collecting new data, doing research, and designing interactive ways to visualize this information, we hope to help existing donors become more strategic and encourage new donors who might be considering human rights funding to take the plunge. And lest anyone think human rights is only for the big foundations, consider the High Stakes Foundation in Arlee, Montana, which gives about $750,000 annually and in 2008 used $30,000 of that for a grant to the Montana Human Rights Network.

Russell Leffingwell, former chair of the Carnegie Corporation, said it best in 1952 when testifying before Congress in response to allegations that foundations were supporting "un-American activities":

To my mind, it is not merely the money that the foundations give, but the stimulus and encouragement, the feeling that there is somebody that you can go to and say, "I know this a very difficult thing, and I am going to get into a lot of trouble and get you into a lot of trouble, probably. But here is something that ought to be tried. Those are the risks."

Soros himself reminded us of where philanthropists find the courage to take such risks when he told the New York Times that his gift to Human Rights Watch was "from the heart."

-- Brad Smith

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Posted by Bruce Trachtenberg  |   September 10, 2010 at 09:33 AM

Interesting thoughts, Brad. I think the work you are planning to help donors better understand the risks and rewards of investing in human rights work is laudable. I also hope, though, that the markers you lay could be expanded more broadly to help understand what we mean by philanthropic "risk" in the first place. I'm not sure that's much more than a label at this point, or a loose way of characterizing how people give. A better understanding of what risk is and why philanthropists should do a better risk assessment to help guide their decision-making could be very valuable (if at all possible).

Posted by Matt  |   September 10, 2010 at 10:38 AM

I've often wondered how risk-averse most philanthropists are. In general, these are men and women of business, who recognize that risk can translate to profit and success, but it can also lead to failure and recrimination. It's right to applaud Mr. Soros for taking a risk like this -- and for the many other risks he has taken in order to encourage openness in societies around the world. I hope other philanthropists recognize that there are many other risky areas that need to be nurtured because it's the right thing to do. I won't say I expect it to become trendy, but I can dream.

Posted by Brad Smith  |   September 11, 2010 at 09:36 AM

To Bruce's point, one thing I have learned since joining the Foundation Center is that there are always more funders, including small foundations, working on an issue than you can ever imagine. The virtues of making human rights philanthropy more transparent is that people will see foundations of all sizes doing human rights work, get an idea of the variety of options possible, the risks and rewards, and see that if they decide to enter into the field they will not be alone. Matt's comment has made me wonder if we shouldn't try to highlight and applaud more examples of philanthropists that use their resources and freedom to take risks. He also reminds us that George Soros is no stranger to taking such risks when it comes to his philanthropy.

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