Giving Compass' Take:

• Maya Winkelstein shares lessons learned working with nonprofit and social enterprise partners that center around risk management and the challenges with charitable giving.

• How can donors encourage more nonprofit feedback in order to obtain the most useful lessons?

• Read about these lessons from funders on philanthropic failure.

Five years ago, Open Road Alliance was founded to help nonprofits overcome unexpected obstacles that threatened impact. While “Keeping Impact on Track” is still our core mission, our execution of that mission has evolved. Our work has expanded to include the promotion of risk management in the sector; we’ve learned some hard lessons about the constraints and challenges of “giving money away;” and we’ve explored new approaches to investing for impact, including recoverable grants and loans.

Most importantly, we’ve been watching and listening to our own partners and the nonprofits and social enterprises they run. What we’ve seen and heard is this:

  • ‘We’re not in Kansas Anymore’: Nonprofit models, financing options, how we measure impact, who we partner with – everything about generating social impact is in a rapid state of flux.
  •  What’s in a Name?: Our vocabulary is not keeping pace with the change. As one social entrepreneur put it: “I generate more revenue than expenses, but I’m legally incorporated as a 501c3 because I founded this organization for the purpose of social impact.
  • Show me the money!: Whatever label you use to describe them, social impact organizations need more money, in new ways, from more sources.

Philanthropy loves to see initiatives scale, but we rarely scale our own operations. Funders encourage, praise, prod, and require their grantees to grow and replicate, but few foundations follow suit.  As we look to the future, if we hope to maximize our impact, we must adapt alongside our social entrepreneurs and nonprofit leaders. To meet the demands of this new marketplace, Open Road is scaling.

Read the full article about why philanthropy must adapt by Maya Winkelstein at GrantCraft.