Leader Shakes Up a Small Nonprofit to Expand Impact

Open Road Alliance

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 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 coffee trees hit Latin America. By 2013, more than half of the region’s coffee 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 effort — in the program.

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 efficiency, effectiveness, 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 off,” 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 offerings. 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.

On the Rise: Young Nonprofit Leaders Breaking New Ground

A collection of profiles of leaders who stand out from the pack with an innovative approach to tackling major issues facing society. New articles are added monthly.

• A Native American Activist Who Tells It Like It Is to Grant Makers
• From Zero to $40 Million: Elite Fundraiser Explains How She Did It
• Foster-Care Veteran Seeks to Use Tech to Ease Transition to Adult Life
• Soccer Program Helps Refugee Children Find Footing in America

“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 staff 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 officer, 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.

“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 officers 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.

IPSI

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 officers to broach the idea of an additional grant with their boss or board, or for nonprofits to alert foundation officials 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.

“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.”