Financial Analysis for Measuring and Comparing Risk in Grantmaking Portfolios

· Risk has not been treated in a systematic way that allows for a rich understanding of the extent to which foundations are, or should be, incorporating or evaluating risk in philanthropy. · In this article, we conceptualize and develop a tool to evaluate the levels of philanthropic risk that foundations maintain through their grant portfolios. · We create an index of aggregated risk at the portfolio level using several financial indicators based on previous theory and literature. Then, we test the index on a sample of foundations and their grantees in the state of Georgia and compare risk levels across community, corporate, family, independent, and operating foundations. · Our results show small differences in philanthropic risk levels when measured by financially oriented proxies between foundation types