Risk in philanthropy is fundamentally about outcomes. Not just whether funds are spent responsibly, but whether a grant delivers the change it was intended to create, without causing unintended harm.
That uncertainty takes many forms: impact risk if a program fails to achieve meaningful results, financial risk if resources are used inefficiently, and reputational risk on an organization if a grant or initiative undermines trust in the foundation’s mission.
In 2026, these pressures are amplified. Nonprofits report surging demand and resource volatility, while many foundations are facing pressure to move money faster and more efficiently. A recent Center for Effective Philanthropy report found that 87 percent of foundations report rising demand from grantees, but only 30 percent have increased payout rates.
While uncertain times can lead to risk aversion, many funders we’ve spoken to this year have identified this as a moment to embrace risk and focus on smart, grantee-centered approaches to grantmaking. The kind that builds trust, accelerates impact, and strengthens resilience without causing unnecessary burden for grantees.
Here are 5 ways funders are approaching risk management in 2026.
More data does not equal less risk
Funders often assume collecting more data from grantees reduces risk. In reality, reporting requirements can increase burden on grantees without necessarily improving outcomes or reducing risk for either side.
Lilia Granillo at Libra Foundation emphasized the foundation’s commitment to trust-based practice by keeping applications focused only on what is truly needed for decision-making.
“Libra staff assume as much of the administrative burden as possible and avoid relying on a standard set of onerous documents. Our aim is to form long-term trusting relationships and have found that meaningful conversations serve that purpose better than long reports.”
– Lilia Granillo, Libra Foundation
This approach reduces grantee workload while still enabling accurate reporting and thoughtful risk assessment, and it reflects a broader ethic at Libra to minimize burden and strengthen trust with nonprofit partners.
Prioritize grantee safety
While it’s important to evaluate potential risk to your foundation, grantee risk should not be overlooked. Helping nonprofits minimize risk and protect themselves requires a long-term, capacity-building approach, not just a response to the latest crisis.
As Linda Aitch of the St. Louis Philanthropic Organization explains,
“The goal is to support organizations in building the skills and infrastructure they need via workshops, toolkits and other resources to navigate ongoing change — from policy shifts to evolving public expectations.“
– Linda Aitch, St. Louis Philanthropic Organization
By strengthening their leadership and ability to adapt operations and communications over time, nonprofits are better positioned to protect their missions, their people, and the communities they serve.
Some funders are also reducing the amount of sensitive grantee information they publish online, helping shield partners from harassment and minimizing opportunities for “bad actors” to target them. These efforts underscore a critical shift: responsible risk management includes protecting the communities doing the work.
Focus on relationships
Trust is the foundation of effective risk management. Strong relationships reduce uncertainty by creating the conditions for faster action, clearer communication, and deeper understanding between funders and grantees.
Ayana Gabriel from the Community Foundation for Greater Atlanta offered a compelling example about building resilience through trust:
“After spending a full year convening donors, strengthening relationships, and building shared understanding, the foundation was able to mobilize a Head Start loan guarantee in just 48 hours. This is a rapid response that would have been impossible without sustained relationship‑building.”
– Ayana Gabriel, Community Foundation for Greater Atlanta
Relationships also create room for honesty on both sides: grantees can share emerging risks earlier, and funders can respond with flexibility rather than punitive oversight. When funders prioritize genuine connection, the result is a more resilient ecosystem that can absorb shocks rather than react in crisis.
Embrace experimentation over certainty
While it may seem counterintuitive in an environment where challenges evolve quickly, funders are recognizing that waiting for perfect clarity often increases risk. Experimentation allows funders to learn quickly without locking themselves into rigid strategies.
Kyla Kasharian at the Siegel Family Endowment captures this ethos well:
“There are no right answers, just answers.”
– Kyla Kasharian, Siegel Family Endowment
That mindset encourages funders to try new models, which in Siegel’s case includes pooled funds, a rural learning series, and cross‑sector networks, while acknowledging that not every initiative needs to become a long‑term program. Siegel’s inquiry‑driven approach encourages funders to adapt as conditions shift, exploring what works rather than assuming they must predetermine a solution.
Experimentation also allows for shared learning. Pilots tested by one organization can be adapted by others, accelerating insight across the sector.
Treat knowledge sharing as a risk mitigation strategy
If uncertainty is the problem, shared knowledge is the antidote. Funders we spoke to described knowledge exchange as a cornerstone of modern risk management.
In Foundant’s 2026 kickoff webinar, leaders in philanthropy agreed that sharing insights, patterns, and learnings strengthen the collective ability to respond effectively. Peer convenings, leveraging nonprofit expertise, and shared resource hubs to build a common understanding of policy impacts. This collective intelligence allowed funders to move more strategically and avoid mistakes.
Knowledge sharing reduces risk by:
- surfacing emerging threats earlier
- preventing funders from working in isolation
- enabling coordinated responses
- accelerating innovation through shared learning
In a moment defined by uncertainty, these approaches show that effective risk management isn’t about avoiding risk entirely, but embracing the strategies that strengthen trust, deepen understanding, and reinforce the resilience of the communities’ funders serve.
