I’ve used a simple frame for many years to help organisations and groups think through their choices on funding change. The method is called a risk-impact matrix. We used it at Nesta throughout the 2010s and I've used it often with other groups and particularly funders.
The idea is that most funders probably want to develop a portfolio of initiatives or projects that will vary in terms of their risk (how likely are they to achieve anything?) and their impact. Obviously you don't usually want to fund things which are high risk and likely to be low impact, ie left of the dotted line.
In an ideal world you could spend all your money on low risk and high impact options. But this is rarely realistic! So in practice you usually have to mix some higher risk and higher impact options with some lower risk and lower impact ones.
Then, over time, you should use your money to help them move across this two dimensional space – becoming less risky (as they build up evidence, gather support) and as the intervention improves (so increasing its potential impact).
There are lots of ways to then make this more complex. You can size the shapes to reflect the amount of money needed or allocated. You can colour code according to whether they are young, maturing or mature projects, and so on. You can try to put numbers on each axis – eg % likelihood of achieving impact on the Y axis, or millions reached on the X axis – though these are bound to remain rough. But although it's never easy to make an objective assessment of where any project sits – usually a group can quite quickly come to a rough consensus.
The key point is that it’s a useful framework for boards or groups of any kinds. Its particularly useful as a tool to reflect on past decisions and to address basic questions like whether enough risks are being taken, or whether there is the right spread of topics.
Sometimes foundations like to talk about making a very small number of big bets - but that does mean quite a high chance of achieving nothing. Others only want to fund things which already have lots of evidence, which means more likelihood of achieving something but also means ignoring high risk and potentially high reward options. Others still want to transform whole systems - but again, this makes it very unlikely they'll succeed as they are usually very small players in very complex ecosystems.
In most cases, if foundations andboards they think seriously about what they want to achieve they end up wanting a mix, a portfolio of projects and programmes that combines different levels of risk and impact, and funding approaches that help to move projects and organisations across this two dimensional space towards the lower right.
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