Open Road Alliance Launches $50 Million Fund for Loans to Nonprofits

Open Road Alliance, a private philanthropic initiative founded in 2012 to address the need for contingency funds and the absence of risk management practices in philanthropy, has announced the launch of a new fund that will disburse at least $50 million in short-term loans to nonprofits and social enterprises over the next five years. Piloted in 2017 with an initial investment of $5 million, the fund, Open Road Ventures, will provide one-time bridge or working capital loans to nonprofits at below-market rates to help them overcome discrete and unexpected challenges. The loans will be available to nonprofits and social enterprises of any size, with loan periods ranging from forty-five days to two years and averaging twelve months. Interest income generated by the loans will be held as reserves to absorb future loan losses."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 the new fund. "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."