With pressure to show returns on philanthropic capital, there’s little room to discuss failure. In order to mitigate huge organisational and programmatic risk, a culture of admitting failure needs to be built.

A lot of ink is spilled, and awards are bestowed celebrating the success of the social sector–and there is much to celebrate. But the truth is, if innovation is essential to the ultimate achievements of the sector, we should spend less time on success, and more time on failure.

We lament the inability of the social sector to scale, but we do not support organisations to innovate on a continuous basis. We know that acceptance of failure is an essential part of innovation, which in turn is required for a successful outcome. Yet we do not bridge the gap.

If innovation is essential to the sector, we should spend less time on success, and more time on failure.

Progress on this issue will require candid communication between social entrepreneurs and the philanthropic community. Unfortunately, such candour is rare.

The impact of the lack of recognition of failure for the sector
Societal change is very complex; it requires system change and the distribution of agency. The path to change at scale needs many experiments, much innovation. Naturally, some ideas will not work on the ground.

For the social sector, recognising failure early, acknowledging one’s personal and institutional role in it, and then embarking on course correction is very critical.

Speaking up about failure gives people courage. The fact that you can express it, and then deal with it, allows you to go beyond the fear of the unknown. Going beyond this fear then opens you up to many possibilities.

Mahatma Gandhi set sail for South Africa because he had failed to set up a successful law practice in Mumbai, and had piled up debts to repay. One failure launched an adventure that encompassed all of humanity.

The reason we don’t recognise failure in the social sector
Funding is so closely tied to the vision of success that social organisations are forced to find ways to claim success, not necessarily for societal outcomes but for continuity of funding. There is also competitive pressure between organisations to show the greatest return on philanthropic capital so talking openly about failure isn’t often possible.

The stage of failure also matters a lot. In the early start-up phase of an organisation, failure can be a badge of honour, and high risk-taking is considered heroic. So, failure is talked about without shame.

Funding is so closely tied to the vision of success that social organisations are forced to find ways to claim success.

When organisations grow, they hesitate to share failures. By then, a culture has often developed where people are supposed to succeed in their tasks. So, when things go wrong, each person or unit keeps it quiet, creating huge organisational risk. Organisations have to learn to build a culture of admitting failure and acting upon it quickly.

It’s also critical to then decide whether to abandon a particular course of action. Otherwise there is a danger of ‘escalation of commitment’. People can double down on some wrong action–hoping to do better next time, or because they are too scared to turn back.

At that point, failure can morph into a moral question. Some failures are a breach of ethics. These should not be absolved or glorified.

Yet, every failure represents a choice made and is an opportunity for everyone in the ecosystem to learn. As philanthropists, we need to create spaces for organisations to share their failures without a negative impact on funding, and on society as a whole.

What philanthropists, funders, and social entrepreneurs can do to help solve this issue
As a philanthropist myself, I can also be bolder in pointing out the failure to understand failure! I would say philanthropists, who are usually successful entrepreneurs in their own right, find it quite easy to take big risks in their business. They do not expect guarantees of success.

But many philanthropists find it very difficult to allow social entrepreneurs the same bandwidth for risk. So, money is spread too thin, or pulled out too soon, or success declared too early.

If we are going to have serious impact, our approach must be seriously different.

Many serious givers, including my husband Nandan and I, have realised that if we are going to have serious impact, our approach must be seriously different. We need to collaborate more, pool resources and experience, and take bigger risks while learning to trust social sector leaders more.

Some hopeful developments in this space
I think Indian philanthropy is at an exciting stage; it is continually evolving, together with the ecosystem of giving. With rapid and concentrated wealth creation, the spotlight is on what that wealth is doing for the country.

Serious philanthropists are investing more capital to tackle bigger, complex problems through mutual trust and collaboration; technology and data platforms; and most importantly–with an approach to distributing the ability to solve across samaaj (civil society), bazaar (markets), and sarkaar (the state).

We call this ‘Societal Platform Thinking‘. For example, some of us, led by the Tata Trusts, have come together to form the India Climate Collaborative. Some of us have pooled resources to set up the IPSMF(Independent and Public-Spirited Media Foundation). Globally, we have The Audacious Project and also Co-Impact, which is a global philanthropic collaborative, backing a few attempts at population-scale social change.

These are new and welcome developments. Now we must be seriously ready to encounter failure and minimise externalising the cost to society.

This is an excerpt from an article that was originally published by the World Economic Forum. You can view the original here.

Rohini Nilekani is Founder-Chairperson, Arghyam, a foundation for sustainable water and sanitation, which funds initiatives across India.