Risk & Reward: Open Road Alliance and Candid launch new risk management course for funders
One need look no further than the events of the last 18 months to understand the importance of considering the power of the unexpected to disrupt and derail the best laid plans. How can funders safeguard impact in an uncertain world? And how can the exercise of risk mitigation support grantee efforts rather than create a burdensome process? Candid Learning teamed up with Open Road Alliance, a longtime advocate of using risk mitigation strategies as a form of social sector strengthening, to develop a new, free eLearning course designed to help funders use risk management to preserve impact in an uncertain world.
In this post, Janet Camarena, Senior Director of Candid Learning, interviews Maya Winkelstein, CEO of Open Road Alliance to discuss the project, the importance of risk management, and learn about what’s next for Open Road Alliance.
Janet: Open Road Alliance was founded in 2012 with the ambitious goal of helping the social sector weather the unexpected risks that threaten to derail impact. Looking at your mix of support strategies, this has meant you have realized this goal by doing things like bridge funding as well as one-time grants and loans to grantees experiencing unexpected external roadblocks. So, it seems, from the beginning you were focused not just on the “what” of your grantmaking, but more specifically on the “how,” which is rare for a start-up funder. What made you focus on the “how” and what has reinforced its importance for the last decade?
Maya: We focus on the ‘how’ because that’s where system-change lives. There’s not enough grant money anywhere to solve the world’s problems. So if we want any hope of moving the needle, we need our market to operate more efficiently. Ultimately, Open Road’s strategy is an efficiency play. By providing relatively small amounts of money to keep much larger initiatives on track, not only do we get massive leverage as an individual donor, but we improve the efficiency and effectiveness of the system as a whole.
Over the past decade, our observation that the philanthropic market doesn’t operate efficiently has been underscored time and again. Luckily, we’ve also seen that our original hypothesis that we could solve for that with fast, flexible, emergency, and bridge funding has also remained true.
Janet: Open Road Alliance has developed a variety of tools and presentations to help support funder learning around risk management. What makes this new Risk & Reward course different? And can you describe a few of the tools the course helps funders learn how to use?
Maya: This new e-Learning course synthesizes everything we’ve learned about risk management since our work on this topic began in earnest back in 2014. It’s also our first self-learning tool that allows grantmakers and donors to acquire both the information and the tools to begin tackling this topic in their own work. For example, not only does it describe what a risk management cycle is, but it provides a template risk matrix which can be directly used to complete step 1 of that cycle: identify and prioritize risks.
Ultimately, this course democratizes the research, knowledge, and tools that we’ve developed over the years. It’s our offer to the sector writ-large, to pass the torch to our community to be able to continue building on this foundation themselves.
Janet: The title of the course is Risk & Reward—what is the reward? What are some of the success stories you can point to from working in this way for the last decade?
Maya: Reward and risk are two sides of the same coin. As the saying goes, taking great risks can often lead to great rewards, which is the conventional wisdom of traditional investing and a wisdom that can translate into philanthropy as well. For example, making a grant for a new, unproven—and therefore “risky”—avenue of research might yield the rewards of a cure for cancer. But there is also reward baked into simply walking through the steps of risk management—regardless of how “risky” the project is. That’s because when we appropriately manage risk, we increase our grantee’s chances for success. Applied correctly, risk management maximizes impact. That’s a reward we all need.
Janet: The dual tragedies of the pandemic and George Floyd’s murder brought into focus structural inequities that have resulted in some funders rethinking their own processes and practices. For example, as funders look to embrace more flexible approaches to unburden grantees, they may be more likely to embrace Trust-Based Philanthropy approaches and believe that conversations about risk may signal a lack of confidence in the nonprofit and opt to deprioritize such dialogue. Why would this be a mistake and how can risk mitigation strategies actually serve to support trust-based models and grantees?
Maya: We are huge fans of the trust-based model of philanthropy, but leading with trust doesn’t eliminate risk, it simply changes the way we can talk about it. The grantees of trust-based funders get hit by the same risks as everyone else whether it’s a global pandemic, employee fraud, a change in government, or simply discovering that your nonprofit office has flooded due to a burst pipe. We can’t trust risk away. However, I think what trust-based philanthropy does offer us is a wonderful framework to help us see risks as an inevitable challenge that we can solve with our grantees. Risk is not evidence of weakness or a ‘gotcha’ moment for funders to judge. Ultimately, a candid, honest, two-way conversation about risk is an expression of trust.
Janet: You are completing a decade of work in influencing the field to lean into its power to remove barriers that can derail impact. Candid is proud to team up with you to house what you have learned from this work in the form of this eLearning course. What else is next for this work and for Open Road Alliance?
Maya: In working on these issues, our most rewarding moments have been seeing organizations across the country engaging in a meaningful conversation about risk as an essential and necessary component of good grantmaking. In recent years, we have realized that making risk management mainstream will only be successful as an open- source community of practice for all. As we approach our own 10-year anniversary in 2022, it is time for Open Road to pass the torch to our peers, our grantees, and you, the grantmaking community, to carry this conversation forward. We are thrilled to partner with Candid on this course to provide our peers in the philanthropic community the tools, lessons, and resources needed to carry the practice of risk management in philanthropy forward. While Open Road will continue to practice what we preach, we leave the work of sharing this body of knowledge in good hands, with you, to encourage, question, explore, share, learn, and cultivate the ongoing conversation and practice around risk.
To learn more or register for the new course, visit Candid Learning.