Leader Works to Name — and Tame — Grant-Making Risks - The Chronicle of Philanthropy
4/7/17, 11'18 AM
NEWS AND ANALYSIS
APRIL 07, 2017
PREMIUM
Leader Shakes Up a Small Nonpro2t to
Expand Impact
By Nicole Wallace
The world can be an unpredictable place.
Currency rates fluctuate, new laws pass,
natural disasters strike — all of which can
present serious problems for the projects
foundations support. Yet talking about the
things that could go wrong is largely taboo.
"Risk is a four-letter word in philanthropy,"
says Maya Winkelstein. "Everybody knows it
happens, but no one talks about it."
As executive director of the Open Road
Alliance, Ms. Winkelstein, 32, is committed
to jump-starting the conversation. She leads
a fund with an unusual mission: making
grants and low-interest loans to nonprofits
in the middle of projects that encounter
roadblocks. It doesn’t matter what issue the
charities tackle or where the projects are
OPEN ROAD ALLIANCE
Maya Winkelstein, 32, is executive director of the Open
Road Alliance, which has an unusual mission: to make
grants and low-interest loans to nonproIt projects that
have hit roadblocks.
located — only that they ran into
unexpected problems.
Since, the alliance’s launch in 2012, it has
awarded $7.6 million. It expects to
distribute between $5 million and $7 million
more this year.
Open Road’s focus allows it to catalyze impact with a small amount of money, says Ms.
Winkelstein.
Take the case of Root Capital, a nonprofit that provides financing and assistance to
small-scale farmers in developing countries. Around 2010, a devastating fungus that
kills co!ee trees hit Latin America. By 2013, more than half of the region’s co!ee crop
was infected.
Relying in part on $2.3 million from a U.S government agency, Root Capital set up a
loan fund to help farmers replace diseased trees and provide them with working capital.
After the grant was approved, the agency informed Root Capital that none of the money
could be used in Nicaragua, leaving the project $100,000 short.
Open Road covered the shortfall, a relatively modest outlay that allowed Root Capital to
keep Nicaragua — a major component of the overall e!ort — in the program.
https://www.philanthropy.com/article/Leader-Works-to-Name-and/239742
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Leader Works to Name — and Tame — Grant-Making Risks - The Chronicle of Philanthropy
4/7/17, 11'18 AM
Sometimes, Ms. Winkelstein says, projects that run into such problems fall apart. Or,
"because nonprofits are scrappy," groups make do. "They’ll pull out the duct tape," she
says. "They’ll limp forward, but they’ll do so at the expense of e"ciency, e!ectiveness,
and ultimately impact."
Creative Thinking
Ms. Winkelstein was a consultant at Williamsworks, a philanthropic advisory firm in
Seattle, when she began working with Laurie Michaels, the donor who started Open
Road. In 2015, after they’d been working together for two years, Ms. Michaels hired Ms.
Winkelstein to lead the project full time.
"When Maya became executive director, she took o!," says Ms. Michaels. "She had
ideas and plans that were well beyond things that I had conceived of."
One of those ideas was adding loans to Open Road’s o!erings. Ms. Michaels says she
was skeptical at first — "I said, ‘We’re a philanthropic organization. Aren’t we
supposed to be giving money away?’ " — but she won over by her new hire’s careful
reasoning. Ms. Winkelstein argued that Open Road could take bigger risks if it knew
that a significant amount of the money it loaned out would be repaid, and that the
transactions could help charities build credit that would help them qualify for bank
loans.
Today, loans make up an important segment of Open Road’s assistance, says Ms.
Michaels.
"There are a lot of reasons why loans are a good thing," she says, chuckling. "But I
have to say when she first brought it up, I really was kind of stunned."
Active Duty
Open Road operates as a virtual organization. Ms. Winkelstein and two other sta!
members are in the greater New York City area. Two employees are in Washington, and
the founder is in Colorado.
"We write, and we read, and we talk," says Ms. Winkelstein. "That’s our day, in various
forms, and that can be done from anywhere."
The structure is a good fit because she’s married to an active-duty military o"cer, who
has served in Iraq and Afghanistan. The family relocates every two to three years; next
year they’ll be moving from New York to Kansas.
Very few Americans have a personal connection to the military, Ms. Winkelstein says,
especially in the world of philanthropy, which tends to be wealthier, more middle and
upper class, and more urban than the country as a whole.
People in the field are often surprised to learn she’s an "Army wife," she says. "It’s a
nice little plus to be able to bring that perspective and story to an audience doesn’t
necessarily have that personal connection."
A Common Problem
Ms. Winkelstein got her start in the nonprofit world as a fundraiser, writing grant
proposals for Lift, an antipoverty charity. She hasn’t forgotten what it was like to be a
grant seeker, and she has set up her organization’s systems with nonprofits’ needs in
mind. Open Road accepts applications on a rolling basis; the first step is a telephone
call.
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Leader Works to Name — and Tame — Grant-Making Risks - The Chronicle of Philanthropy
4/7/17, 11'18 AM
"It is amazing how much easier and faster it is to build the trust and transparency
necessary to get at the heart of the issue," she says of the phone discussions.
The initial call is followed by an application. Open Road aims to give applicants written
feedback within 72 business hours. Its employees are evaluated, in part, on whether
they meet that expectation.
"At the end of the day, the customer is the grantee, not us," Ms. Winkelstein says.
"We’re here to serve them."
And it isn’t unusual for those customers to hit unexpected hurdles, says Ms.
Winkelstein. In 2015, Open Road commissioned a survey of 200 grant makers and 200
nonprofit leaders. The study found that roughly one in five projects experienced
unanticipated challenges, putting billions of philanthropic dollars in jeopardy.
The root of the problem is communication — or, more accurately, a lack of it. Roughly
three-quarters of the grant makers in the survey said their institutions didn’t ask
nonprofits during the application process what could go wrong with a project.
"If donors don’t ask, grantees don’t tell," Ms. Winkelstein says. "And when it doesn’t
get talked about, then, of course, it doesn’t get managed."
‘Training Wheels’
As word about Open Road’s work spread, a funny thing happened: It started to see a
jump in referrals from other grant makers. Program o"cers called to say they had a
fantastic grantee that ran into a problem their own foundation couldn’t or wouldn’t
provide extra money to solve. Could Open Road help?
The requests, Ms. Winkelstein says, meant that foundations clearly saw the value in
what Open Road was doing. So she and her colleagues brainstormed ways to encourage
grant makers to take on contingency funding themselves.
Last year, Open Road launched the
Unexpected Fund, which will pay 50 percent
of the money needed to solve an unforeseen
problem if the project’s original donor puts
up the other half.
It’s designed to make it easier for program
o"cers to broach the idea of an additional
grant with their boss or board, or for
IPSI
The International Peace and Security Institute trains
young practitioners to be effective peace leaders, such
as these participants at a Johns Hopkins University
center in Bologna, Italy, who are taking part in a peacebuilding simulation based on the conWict in Syria.
nonprofits to alert foundation o"cials to the
stumbling block they’ve encountered.
The hope is that the matching grants act as
"training wheels" that show foundations
the benefits of providing contingency
grants, says Ms. Winkelstein, "so that over
time, they’re more willing to step up and do
it themselves."
Open Road also worked with Judith Rodin, then president of the Rockefeller Foundation,
to pull together a task force on risk management in philanthropy. The partnership
recently published a tool kit to help foundations identify their risk tolerance and the
steps they should take to manage risk.
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Leader Works to Name — and Tame — Grant-Making Risks - The Chronicle of Philanthropy
4/7/17, 11'18 AM
"There is no such thing as zero on the risk-tolerance scale," says Ms. Winkelstein.
"Even if you’re the most conservative, cautious donor, risk will still exist — and you
need to manage for that."
Send an e-mail to Nicole Wallace.
1255 Twenty-Third St., N.W.
Washington, D.C. 20037
Copyright © 2017 The Chronicle of Philanthropy
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