How Open Road Alliance is Helping Cure a Blind Spot for Philanthropists

Tuesday, October 2, 2018

How Open Road Alliance is Helping Cure a Blind Spot for Philanthropists

The philanthropy world has a blind spot when it comes to risk. Projects can be waylaid or abandoned when unexpected challenges arise. Laurie Michaels started looking for a solution while attending the 2011 Burning Man arts festival in Nevada. Michaels, who’s married to billionaire dealmaker David Bonderman, founded Open Road Alliance to offer fast funding to nonprofits and social enterprises facing unexpected roadblocks. It made its first grant in 2012 and now offers loans, too. Open Road Ventures, its new loan fund, just topped $10 million in loans and expects to disburse at least $50 million over five years.

It’s perhaps no surprise that Michaels founded such an initiative. Her training as a psychologist helped her recognize the holes in how some philanthropists manage risk. And her husband, the chairman and co-founder of TPG Capital, has spent his career exploiting leverage and managing risk.

Michaels, Open Road Alliance Executive Director Maya Winkelstein and Caroline Bressan, director of social investments, spoke with Bloomberg this month to discuss the venture. Comments have been edited and condensed.

How did Open Road come about?

Laurie Michaels: My background is as a psychologist. I had a private practice here and I wanted to close that down and move into philanthropy more. I was interested in being able to look for strategic and targeted kinds of investments and I was looking for leverage. A couple of friends of mine and I were at Burning Man and discussing some of the ridiculous things that happen in philanthropy. Stuff that could be so quickly and easily solved with a check to the right person at the right time. And my friend looked at me and said, “Well, you’re looking for a project, why don’t you take this up?”

How is risk dealt with in philanthropy?

LM: In philanthropy there’s generally not a plan B, which when you think about it is extraordinarily outside mainstream thinking in any other business where you always have a plan B and you start with the risks. While most donors will look at risk in terms of reputation or risk to their endowment and funding, they don’t look at risk in terms of project risk. 

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