Giving Compass' Take:

• This Stanford Social Innovation Review post discusses welfare reform and how funders can use risk as a tool for continuous learning, across many different types of programs.

• How can we encourage bolder ideas when it comes to improving the social safety net? Is the philanthropy sector too risk adverse in general?

• Here's how to think about risk on nonprofit boards.

Even with her new job, Martha didn’t earn enough to enroll Ruben in a comparable private program. So her choices were stark: She could either quit her job and get back on welfare so that her son could continue in the program (where he had been thriving) or find another way to build a future for her family that didn’t include welfare — or Ruben’s program.

It’s true that many existing efforts to address poverty are looking to expand their scope and reach. Food pantries and homeless programs are looking to add workforce training services; housing programs are encouraging long-term residents to become upwardly mobile; and schools are trying to encourage more parents from low-income families to get more involved in their children’s education. These new efforts will inherently involve some level of risk in the hopes of greater impact; nonetheless, their leaders forge ahead.

Our sector’s affinity for innovation and social entrepreneurs reflects a system-wide recognition of the need for change. However, when ideas are novel, we tend to back away. We need to be able to offer a greater tolerance and even an appetite for risk so that we can learn from the lessons that trial and error provide.

Certainly, there may occasionally be a novel approach that doesn’t result in the desired outcome, but those ventures yield sector-wide learning and improvement if the right information about them is gathered, analyzed, and shared ... Funders must drive the promotion of a risk-tolerant environment so that service agencies testing new models are able to make real, sustainable progress.

Risk is often perceived as a negative in program implementation, especially when resources are constrained and there seems to be little room for error. However, to make real progress in the war on poverty, or any other area of social impact, some level of risk not only is a necessity but also can be an asset.

Read the full article about change in welfare reform by Mauricio Miller at Stanford Social Innovation Review.