For the first edition of “5 minutes with a social agitator,”* we sat down with Caroline Bressan, the Director of Social Investments at Open Road Alliance. Open Road is a private philanthropic initiative that provides grant capital to non-profits for mid-implementation projects facing an unexpected roadblock or a sudden catalytic opportunity. Let’s jump in…
In a nutshell, what big global problem are you trying to solve, and how?
Open Road Alliance is trying to make philanthropy more efficient by bringing better management risk practices to the sector. We step in when a project runs into an unexpected roadblock but the original donor can’t – or doesn’t want to – provide the additional funding needed to get over that roadblock. So if you have a $1 million project that runs into an $100,000 unexpected challenge, Open Road Alliance foots the bill to get the project back on track. It’s like we’re paying $100,000 for $1 million of impact – it just makes sense.
What a lot of people don’t realize is that we (as funders) are leaving a lot of impact on the table because of the constraints of institutions. I like to think of what we do as “keeping impact on track” or preserving the ROI of the original funder’s investment.
Here’s one story I can tell you to make it more concrete: One of the common roadblocks we see is “organization misfortune” – like fraud or robbery. We had a social enterprise in Ghana whose European CEO contracted dengue fever for the second time. It turns out that when you have dengue more than once, the mortality rate skyrockets. So, this CEO had to leave the country entirely for health reasons. Open Road Alliance funded the hiring of a COO to manage day-to-day operations so the social enterprise didn’t go under.
If you could get two groups that don’t usually collaborate to work together in some way to help solve a global challenge, what would that look like?
I guess this answer is a little bit cheesy, but I would want to get funders and grantees in the same room to look at the power dynamics in that relationship and disrupt the balance. We see so many grantees or nonprofits that are afraid to tell their funders when something goes wrong because they fear future funding repercussions – and many of them have reason to be afraid of that based on what’s happened in the past. If grantees don’t feel comfortable sharing, then funders won’t know what the real issues are. We need to invest in these funder-grantee relationships to keep them strong, and funders must be accountable to their grantees.
Tell us a story of a time something went massively wrong with your work, and how you rebounded.
I was working in microfinance at the peak of the financial crisis in 2009. I was one of two people on the Calvert Foundation’s international team, and the other was my boss, who was out on maternity leave. We had a lot of loans out to microfinance institutions, fair trade coffee collaboratives, etc.
Every day we heard more news out of Europe about economies collapsing and other negative impacts. I felt like I was failing because I hadn’t predicted this and there was a lot more risk in my portfolio than I anticipated. (In retrospect, I don’t think anyone predicted it, so I feel okay.) But in those moments, there was actually a very positive experience for me. I got to work on a bunch of loan restructures, including with lender groups where we negotiated how one organization would pay all of us back without pushing them into bankruptcy. It was very political and involved a lot of intense negotiation, but it showed me how to navigate the backend of lending and the sticky situations where things go wrong. Until that point I had only seen the good side of lending.
What advice do you have for other “social agitators” driving urgent global change?
At the end of the day, you need to get out there and test your hypothesis. Open Road Alliance is learning by doing. To date, we’ve made over 100 grants and loans to organizations that run into unexpected roadblocks. This portfolio has turned into our data set for thinking through how to better prepare nonprofits and social enterprises for managing through the unexpected. Ultimately all our insights comes from real situations we’ve encountered in the field; we’re not calling up nonprofits and asking them what roadblocks they’ve encountered.
You can collect all the data in the world, and at the end of the day, you’re not going to know if it works until you try it. Instead of getting stuck in a cycle of analysis paralysis, what would happen if you just jumped to trying it?
If you had control over significant philanthropic funding, what “big bet” would you fund?
It’s great because what I would do is very aligned with what I’m doing now at Open Road Alliance. I see a real need for working capital loans for the social sector. So many of the roadblocks we see could have been solved if the organization had access to lines of finance.
When I started working in microfinance, the field was seen as this silver bullet to end poverty. What it really acted as was a cash management tool for the working poor – it stopped them from dropping down to the ultra poor rung.
I see contingency and bridge funding as playing that role at the organizational level. Nonprofits and social enterprises don’t usually have access to sustainable financing from a bank (loans, credit lines, etc.), so these organizations that are doing the hard work are one shock away from closing shop. Contingency funding can act as a product that prevents that.
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*This post is part of GDI’s series “5 Minutes with a Social Agitator.” We define social agitators as people driving urgent change around the world using unorthodox approaches that cut across silos. If you would like to be featured or get in touch with GDI, contact us here.