NEW YORK, Feb. 21, 2018 /PRNewswire/ -- Open Road Alliance, a philanthropic initiative that seeks to preserve impact in the social sector, today announced the launch of Open Road Ventures, a new fund that will disburse at least $50 million in loans to nonprofits and social enterprises over the next five years. Open Road Ventures (ORV) is Open Road's latest instrument to "keep impact on track" in the social sector.
In 2017, Open Road piloted ORV's loan fund with an initial investment of $5 million in order to test the demand for one-time working capital and bridge loans in the social sector. Based on the fund's early success, ORV is expanding its efforts to help nonprofits and social enterprises overcome discrete and unexpected obstacles.
ORV's loan fund is unique in its speed and focus on one-time cash flow crunches. Loans are available to organizations of any size and offered at below market-rates, ranging from 0-7%, to serve as a bridge or working capital. The average loan term is 12 months, with a range of 45 days to two years. Any income generated from interest will be used as reserves to absorb future losses.
"Over the last five years, we've disbursed $13 million in grants and loans to nonprofits and social enterprises. During that time, we've watched the market shift creating a greater demand for financial products designed for the social sector. The launch of Open Road Ventures is designed to meet that demand and allows us to grow our mission to provide funding with greater scale, flexibility, and speed," stated Maya Winkelstein, Executive Director of Open Road Alliance. "By committing to $50 million in loans over the next five years, Open Road will continue to help organizations keep impact on track by solving for the immediate cash flow needs when faced with the unexpected."
The expansion of the loan fund serves as evidence of the overwhelming demand for more flexible and creative funding mechanisms in the social sector. By proving its model, Open Road is encouraging other foundations and impact investors to develop their own funding mechanisms to better serve the needs of nonprofits and social enterprises working for impact.
"There is a huge need for working capital in the social sector, and unfortunately social enterprises don't typically have access to the financial services traditional businesses do," said Caroline Bressan, Director of Social Investments at Open Road Ventures. "By showing there is great demand for short-term bridge and working capital loans in the social sector, Open Road Ventures is highlighting a market gap and creating a roadmap for other social investors."
Open Road Alliance is currently accepting unsolicited inquiries for both charitable grants and ORV loans. Additional information on funding criteria and application process is available at www.openroadalliance.org.
About Open Road Alliance
Established in 2012, Open Road Alliance is a philanthropic initiative that serves the social sector by keeping impact on track in an unpredictable world. Open Road provides short-term solutions by disbursing fast grants and loans to nonprofits and social enterprises facing discrete, unexpected roadblocks during project implementation. It also conducts research and advocates for the adoption of long-term, system-wide risk management practices across the social sector.
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SOURCE Open Road Alliance