PRESS RELEASE – OPEN ROAD ALLIANCE LAUNCHES “THE UNEXPECTED FUND” TO ASSIST DONORS AND NON-PROFITS TO OVERCOME UNFORESEEN CHALLENGES
Fund Provides One-Time Charitable Donation that is Matched by Original Funder
Launched as Part of Commitment to Action through the Clinton Global Initiative
WASHINGTON, D.C. – March 23, 2016 – Today, Open Road Alliance announced the launch of The Unexpected Fund (TUF), a matching fund available to donors to help them provide contingency funding to a grantee that has encountered an unexpected roadblock. By working directly with donors, Open Road will help them ensure the successful completion of programs in which they have already invested. Our long-term goal to create systemic change by encouraging funders to integrate contingency and risk mitigation strategies more formally into their operations.
Like other Open Road investment vehicles, The Unexpected Fund exists to keep impact on course. The Unexpected Fund is unique in that it accepts requests only from original funders, not the grantees. Previous research shows that grantees are generally very reluctant to approach original funders for additional funds above the agreed upon budget. It also shows that about 1 in 5 projects will need contingency funding. To access the TUF funds, however, a non-profit will need to discuss the roadblock situation with their original funder. We hope to stimulate productive conversations between the grantor and grantee that will open new avenues of communication for the future.
Since the original funder will be requesting assistance from Open Road, The Unexpected Fund’s review process is expedited and enables matching funds to be quickly dispersed. Applicants must meet the standard Open Road funding criteria of “Mid-Implementation,” “Unexpected,” and “Discrete,” and be willing to match Open Road’s investment.
“Foundations and non-profits don’t plan for something to go awry on a project, and as a result, when projects encounter problems, no one is prepared. The Unexpected Fund provides donors with emergency funds to ensure impactful projects are completed. We expect that this process will encourage donors and non-profits to recognize that small amounts of contingency planning and funding can save multimillion dollar programs,” said Laurie Michaels, founder of Open Road Alliance. “Open Road believes that in order to maximize the social impact of philanthropic dollars, non-profits and funders need to have open and honest conversations about the risks involved in each project. Our goal is to engage donors about the benefits of contingency funding and establish this practice as a standard for charitable giving.”
Results from a recent survey conducted by Open Road, demonstrate that one in five grants will face unforeseen obstacles. Yet, 83 percent of donors lack a dedicated budget allocation for contingencies. Seventy-six percent of funders said they do not ask applicants to assess, either in written or verbal form, what circumstances could lead to a need for additional funding. Eighty-seven percent of grantees stated that RFPs do not ask what could go wrong with a project and what it might take to fix the situation.
As a result, projects are stalled and sometimes completely shut down when small amounts of additional funding are needed. Billions of dollars are at stake when risk goes unaddressed. However, incalculable returns on impact are the true opportunity cost of poor risk management and mitigation practices. The Unexpected Fund’s goal is to educate donors about the benefits of contingency funding and establish this practice as a normal part of charitable giving. It is being launched as part of Open Road’s Clinton Global Initiative Commitment to Action.
Michaels continued, “As part of our Clinton Global Initiative commitment, The Unexpected Fund will collect a wealth of case studies, testimonials and data on how funders can and do address contingencies, serving as a platform to gradually build a network of funders who embrace contingency funding and are working to establish best practices. By addressing risk, stronger partnerships and relationships will be formed between non-profits and funders.”
To learn more about Open Road Alliance and the Unexpected Fund, please visit www.OpenRoadAlliance.org
About Open Road Alliance
Founded in 2012, Open Road Alliance is a private philanthropic initiative that provides capital to cover the need for contingency funding that non-profits frequently encounter. We make discrete, one-time charitable and recoverable investments across all sectors and geographies because projects everywhere are vulnerable to disruption created by external circumstances.
In addition to its portfolio of investments, Open Road conducts advocacy and research to promote practices that address risk mitigation and contingency funding. We believe that in order to get the greatest social impact out of philanthropic dollars, Grantees and Funders need to have open conversations about risks involved in each project. When these conversations don’t happen, risks turn into roadblocks and impact is in jeopardy. For more information, visit OpenRoadAlliance.org and follow us on Twitter @OpenRoadTweets.
About the Clinton Global Initiative (CGI)
Established in 2005 by President Bill Clinton, the Clinton Global Initiative (CGI), an initiative of the Clinton Foundation, convenes global leaders to create and implement solutions to the world’s most pressing challenges. CGI Annual Meetings have brought together 190 sitting and former heads of state, more than 20 Nobel Prize laureates, and hundreds of leading CEOs, heads of foundations and NGOs, major philanthropists, and members of the media. To date, members of the CGI community have made more than 3,400 Commitments to Action, which have improved the lives of over 430 million people in more than 180 countries.
In addition to the Annual Meeting, CGI convenes CGI America, a meeting focused on collaborative solutions to economic recovery in the United States; and CGI University (CGI U), which brings together undergraduate and graduate students to address pressing challenges in their community or around the world.