PRESS RELEASE – The Commons Releases First Ever Framework For Philanthropic Sector To Addresses Risk
Open Road Alliance Leads Task Force to Create Risk Management Toolkit for Funders
January 18, 2017 (NEW YORK, New York) – The Commons, a 25-member task force co-convened by the Founder of Open Road Alliance and the President of Rockefeller Foundation, with support from Arabella Advisors, today announces the launch of Risk Management for Philanthropy: A Toolkit. It is the first practical, comprehensive framework designed to guide foundations in implementing best practices in risk management for their grantmaking portfolios in order to maximize impact.
While risk is intrinsic to the work of nonprofits and a necessary element of impact, it often goes unacknowledged and unmeasured. To address this, the Commons developed the Toolkit which includes 10 adoptable and adaptable tools that address risk culture and risk management practices in philanthropy. It details strategies for setting aside emergency funding, establishing contingency protocols, and building more effective funder-grantee communication.
“Prior to the Commons, we collected data that shows donors do not commonly include risk management in their budgets or grant practices, which is a systemic problem within the sector,” said Laurie Michaels, founder of Open Road Alliance. “Our ability to achieve greater impact depends upon our willingness and our capacity to protect our grants and social investments from unexpected
disruption in the same way
we would any traditional financial investment – this means addressing risk.”
The Commons is a diverse group of philanthropic leaders representing foundations, nonprofits, impact service providers, nonprofit attorneys, wealth advisors, and philanthropic associations. The group met multiple times over a seven-month period in 2016 to better understand risk in philanthropy and develop a baseline of best practices for managing risk, explicitly designed to ensure and maximize impact.
The Toolkit is broadly applicable across the philanthropic sector and is useful for all types of funders with varying levels of risk management practice. It is a first step in the development of a comprehensive risk management framework and is expected to evolve, improve and iterate over time as more experience and data become available. Using these tools, funders will be better positioned to discuss, assess and manage risk in their philanthropic practice.
“Risk can be a complicated concept because it means different things to different people – even within the same organization. Bringing such a diverse group together allowed the Commons to define risk for groups across the sector and ultimately understand how to properly address it at every level,” said Judith Rodin, President of The Rockefeller Foundation. “Because every organization has different goals, and therefore a different risk appetite and capacity, providing a range of risk assessment strategies and tools has been critical to this work”
About Open Road Alliance
Launched in 2012, Open Road Alliance is a privately funded initiative designed to fill the void of fast, flexible contingency funding in philanthropy. In addition to cultivating its grant-making portfolio, Open Road conducts research, generates data, and shares its learnings with the wider sector. Open Road’s goal is to make managing risk as commonplace in philanthropy as monitoring and evaluation. To accomplish this goal, Open Road develops and disseminates best practices for the assessment and management of risk with the goal of protecting the integrity and impact of the original project.
About Arabella Advisors
Founded in 2005, Arabella Advisors helps philanthropists and investors who are serious about impact to achieve the greatest good with their resources. Arabella employs a team of more than 150 people across four cities who provide strategic guidance for effective philanthropy. In the creation of the Toolkit, Arabella served as a critical thought leader and strategic partner in convening the Commons and creating the tools.
About the Commons
Comprised of twenty-five members, the Commons is a geographically diverse task force representing institutional and family foundations, non-profits, law firms and financial advisors that specialize in the philanthropic sector. Over a seven-month period in 2016, the Commons met multiple times to discuss risk in philanthropy and develop best practices for risk management, designed to ensure and maximize impact. The Commons was co-convened by Laurie Michaels, Founder of Open Road Alliance, and Judith Rodin, President of the Rockefeller Foundation, in partnership with Arabella Advisors.
About Risk Management for Philanthropy: A Toolkit
The Commons culminated with the collaborative authorship and publication of “Risk Management for Philanthropy: A Toolkit” – the first practical, comprehensive framework providing guidance to funders on how to implement best practices in risk management. The Toolkit includes ten adoptable and adaptable tools that cover a spectrum of practice including how to determine your organizational risk profile and how to integrate specific financial, governance, and other procedural risk management activities into daily philanthropic practice. The tools are designed to be used in total or a la carte. Ultimately, the Toolkit is meant to facilitate and mainstream comprehensive risk management in philanthropy in order to preserve and maximize impact.
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