Maya Winkelstein is CEO of the Open Road Alliance, which makes grants and low-interest loans to charities facing unexpected challenges. In an interview, she describes what charities need as they grapple with coronavirus and how foundations can help.
What are you hearing from charities?
Anybody who had a fundraising gala planned for this spring, that revenue is pretty much gone at this point. The inquiries we are receiving are coming from all over the world — Kenya, Peru, Europe, Cambodia. This really is a global crisis.
We’re also seeing anticipated revenue loss. Even before Covid, charities were seeking help from us due to delays in disbursement of foundation grants. What nonprofits are starting to think through is, How is this going to affect my pipeline six or nine months from now? We’ve heard about funders that are delaying board meetings, postponing staff meetings, postponing grant dockets. All of this will have knock-on effects.
Experts have emphasized since the financial crisis that charities need a contingency plan and an operating reserve that could see them through three to six months. Is this lack of planning coming home to roost?
I don’t see this as the fault of nonprofits. Social enterprises are the working poor of the business world. You can only blame them so much for not saving money when they barely have enough to live on to begin with. There is a lesson learned here for the value of risk management and contingency planning. But I don’t put it on nonprofits. I put it on our sector as a whole.
When we spoke six months ago, you said that it’s not the next recession that will hurt nonprofits — it will be the botched response by foundations. Do you stand by that?
I absolutely stand by that. But we have enough pessimistic news out there. I would put it in a more optimistic framework. Foundations and funders have an opportunity. The first issue is the immediate crisis — whatever it takes for us to flatten the public-health curve. The second issue is the knock-on effects, which are going to hit six or nine months from now. For many organizations, that will prove to be the bigger hit.
If you’re a foundation that is delaying your board meeting concurrently with offering emergency funding now, that’s just kicking the can down the road. Move your board meeting to a virtual meeting. Get creative and do what you can do to keep the process moving forward.
Should foundations increase the percentage they spend from their endowments to help charities during this crisis?
Yes, I do think foundations should be thinking hard about that. We are not in a binary situation — protect my endowment or protect my grantees. There is a way to do both.
Maybe you’re not comfortable putting out an extra million dollars in charitable grants. Maybe you are comfortable putting out an extra million dollars as zero-interest loans to your grantees, knowing that you’re not going to get paid back in every case. This is a time for funders to step out of their comfort zone and do some things they haven’t tried before.
