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FIP 114: Why you need a clear fundraising strategy before going to market with Solonia Teodros of The Change School

This week on the Finding Impact Podcast, we are talking to Solonia Teodros, Co-founder of The Change School, who describes why social entrepreneurs need a clear fundraising strategy and goal before starting their fundraising activities. Solonia shares her journey of fundraising for The Change School, with lessons from her experience of almost closing a fundraising deal, changing course and walking away from the deal and coming back to it later with a clear strategy.

On this podcast, you will learn:

  • How Change School helps transform organizations and individuals by helping them re-connect with their values, re-design their work and re-define success as authentic leaders. Change School thus equips and empowers people to navigate uncertainty and embrace change during the transition or transformation that they are going through.
  • About Change School’s journey of testing various offline business models such as: creating immersive retreats for people to re-connect with themselves while enabling a peer-to-peer and community learning experience; to creating Change School mind gyms for bite-sized learning to develop mental resilience; and creating bespoke experiential transformation programs for organizations.
  • How the founders encountered the growth and scale challenges of Change School by evolving and developing an online delivery model of working with its vast pool of trainers and experts while drawing from the expertise of its offline immersive retreats and retaining the Change School brand personality.
  • Why social entrepreneurs should have a strategy of pro-actively approaching investors for funding and alignment with business growth plans rather than just nosediving into fundraising re-actively in trying to impress investors, while not losing focus on the business vision and operating matters such as managing cash flows properly.
  • Finally, you will learn about Change School’s online courses and tutorials for anyone needing resources and additional support to managing change and transitions. Check out the free online course at https://findingimpact.com/changeschool, which is a 5-day visioning challenge for teams or individuals to help find clarity of vision in careers or lives.

Links to Resources:

Connect with Solonia:

FIP 113: Funding for when things go wrong, with Caroline Bressan of Open Road Alliance

This week on the Finding Impact podcast, we spoke with Caroline Bressan, Director of Social Investments at Open Road Alliance. This incredible service at Open Road Alliance provides capital (loans or grants) to social impact organizations (non-profits and for-profits) facing an unexpected roadblock during implementation.

On this episode you will learn:

  • The story behind why it was set up: founded in 2012 by psychologist and philanthropist Dr. Laurie Michaels to address the need for contingency funds and the absence of risk management practices in philanthropy. It originally started as a grantmaking organization and then moved on to recoverable grants, and finally in 2018 launched Loan Fund Open Road Ventures which is a $50 million dollar commitment towards short term loans on solving these unexpected roadblocks and cash crunches. To date they have put out $18 million towards that $50 million target.
    • Half of their portfolio is in East Africa.
  • Fast response: from initial request to decision being made, it’s a period of 6 weeks.
  • Examples of:
    • Some organizations receiving bridge loans for accounts receivable and / or a large purchase order, and
    • When social entrepreneurs are raising money, it’s been committed, and there’s a delay in disbursement.
  • The Roadblock Analysis Report which has around 150 data points which shows (among other things) that about half of these cash crunches are caused by funder created obstacles.
    • E.g. An agricultural social enterprise in Kenya can look at the report to see what are the top three risks likely to occur so that they can put a contingency plan in place.
  • Caroline’s advice from the entrepreneur side: when talking to investors, first make sure they have already raised their funding and ask if they have made their first deal out of their new fund yet. Impact investors, particularly in East Africa, could do a better job about being clear and transparent regarding their application process, their timeline for disbursement, and criteria they use to make decisions.
  • Open Road Alliance criteria for social entrepreneurs applying for funding:
    • 1) It has to be mid implementation (ie. you had all the money you needed and then something happened).
    • 2) An “unexpected” criteria (ie. something external outside of the management teams control, like a funder pulling out, the government changing a policy, or an office being robbed, etc.).
    • 3) Discreet criteria (ie. need to be able to fully solve the problem at hand, for example, the average loan is $300k and if you have a million dollar gap, Open Road Alliance won’t be able to fund you until you find that first $500k).
    • 4) Catalytic impact criteria (ie. does this model have the potential to be system changing either in design or scale, and what is the probability of achieving that impact?)
    • **Geography is not important.
  • The process: an entrepreneur-centric approach. It typically takes 4 to 6 weeks, although the fastest they have ever moved is 7 days. You can connect through an existing investor or reach out to the funding@OpenRoadAlliance.org email to start an initial conversation to talk through your model, ask questions about the roadblock(s), and Open Road Alliance can give a diagnosis to how well things are fitting into their criteria. The next stage is the application which is 4 pages and asks about your model, the roadblock, the solution, and the impact. Open Road Alliance can have a 1 hour call to give feedback to make the application as strong as possible before moving to the investment committee. Then a decision is made after that within a week. In between Open Road Alliance will check references, talk through repayment structures, etc.
  • Open Road Alliance has only had 1 loss out of 60 loans.

Links to Resources:

Connect with Caroline: