In 2015, Open Road Alliance conducted a 400-respondent survey designed to look at the frequency of need for contingency funding as reported by Funders and Grantees. The survey was designed to explore the following questions about risk and contingency funding:
How often do projects need contingency funding?
How often are projects granted additional contingency funds?
What policies and procedures are in place to deal with contingencies?
What are the consequences of unfunded requests for the project and for the Funder-Grantee relationship?
The survey data lead to five key findings:
- Disruptions requiring additional funds (i.e., contingency funds) are common and expected. Both Grantees and Funders report that about 1 in 5 projects require contingency funding to bring projects in on time and with full impact.
- It is not a common practice for Funders or Grantees to address these risks before they happen.
- When contingency funds are needed, most Funders do have the operational and financial capacity to respond. When asked, the majority of Funders do approve additional requests.
- Grantees are hesitant to communicate with Funders about potential obstacles.
- Funders' and Grantees' perceptions regarding the effects of their actions on each other are often misaligned. Specifically, grantees believe that asking for additional funds negatively affects the likelihood of being awarded future grants, while the vast majority of Funders claim such requests have no effect on future decision-making.