In this time of uncertainty, nonprofits and social enterprises are being hit hard. Many of you have reached out to Open Road directly to share how COVID-19 is already impacting your organization and work.
The effect of the COVID-19 pandemic on the impact sector has reached natural disaster proportions in its scope and scale, which means that the global need for our ‘emergency’ capital vastly outstrips our available resources. Given this reality, we have decided to use our limited resources to best serve the sector under the following circumstances:
- Charitable Grants will only be offered to organizations responding directly to COVID-19.
Open Road will be offering four loan products to organizations affected by COVID-19:
- Lost Event Revenue
- Accelerating Incoming Emergency Funds
- Co-investment to Support Social Enterprises
- Deep Impact Loans
As always, all of our grant and loan products will be subject to Open Road’s traditional criteria:
We only make a loan or grant to an organization that is (1) otherwise fully funded, then (2) hit an unexpected, external roadblock (i.e., COVID-19), where (3) Open Road’s loan can fully solve the problem at hand and (4) demonstrate the potential to create catalytic impact. In this time of exceptional need, we will be prioritizing impact.
Direct COVID-19 Response
Who: For organizations engaging in direct COVID-19 response. We will prioritize organizations and activities that have a clear and direct role in ‘flattening the curve’ and thus limiting, shortening, or minimizing the economic and social, as well as health effects of the pandemic.
Why: Slowing and stopping the spread of COVID-19 is directly linked to reducing and limiting the economic and social hardship our communities are experiencing.
What: Charitable Grants
- One-time cash need
- Up to $100,000 USD
- Any geography and any sector, providing they can demonstrate that they are directly contributing to ‘flattening the curve’ in their community.
- Prioritizing clear, demonstrable, and deep impact.
Apply: Send an email to [email protected] with the following information:
- Your Organization
- Your Response to COVID-19
- What you need and why
- Keep it short and to the point!
Lost Event Revenue
Organizations with annual revenue UNDER $1 million:
Open Road will offer a one-time, fixed, low-interest, $50,000 loan to organizations that are rescheduling/postponing their fundraising events until later this year. Loan criteria and terms include:
- $50,000 loan to organizations with annual revenues of $1 million or less
- 1-2% simple interest
- Final principal repayment due by December 31, 2020
To be eligible, the event in question must:
- Be postponed – not cancelled
- Have a new, confirmed date with appropriate confirmations from venue, host committee, etc.
- Have a track record of successful fundraising performance in the past two years
Organizations with annual revenues OVER $1 million:
Organizations with annual revenues over $1 million that are facing a similar cash crunch from rescheduled/postponed events may apply for a larger loan up to $250,000 and will follow our existing underwriting process. Apply Here.
Accelerating Incoming Emergency Funds
Terms: Low-interest, 3-6 month loans up to $1 million with an average loan size of $500,000.
Target Partners: DFIs, governments, multilaterals and other institutional donors, as well as frontline organizations approved to receive emergency funding from these or similar entities.
Purpose: During the Ebola outbreak in 2014, it took some health organizations on the ground 45 days to receive funding due to delays in government and institutional mechanisms for providing emergency relief. In this environment, timing is critical. The difference of days can have a significant negative impact on both an organization, and the people they serve.
Our bridge loans can accelerate incoming funds from other investors or donors who can’t move as quickly as us, which we hope will prevent delays similar to the 2014 Ebola outbreak. We are looking to work with government and DFI partners to accelerate their committed emergency funding into the bank accounts of social enterprises and nonprofits. Through our existing relationships and underwriting model, we have created a streamlined process that allows us to fully process applications within a two week period and disburse funds 48 hours following approval. Apply Here.
Co-Investing to Support Social Enterprises
Terms: Low-interest, 1-12 month loans up to $500,000.
Target Partner: Impact investing funds, both equity and longer-term debt funds that have deep relationships with their portfolio companies.
Purpose: We recognize that many of our peers are also stepping up to support their portfolios during this crisis. We also know that many of these social enterprises will need additional support to weather the storm.
We will take referrals from existing investors, and expect to share the risk of keeping these portfolio companies afloat through a co-investment strategy. For these loans, we will bridge to future committed funding or delays in accounts receivable, equipment, etc. where the organization’s cash flow is typically strong enough to repay within a 12-month period. By combining forces with other investors, we will also be able to solve for larger short-term financing gaps. Apply Here.
Deep Impact Loans
Terms: Low-interest, 1-18 month loans up to $250,000.
Target Partner: Organizations that deliver vital community services.
Purpose: We recognize that not every situation will tie up neatly into a clear future cash flow. There are situations where simply “holding the line” of impact is deeply important. These are scenarios where clear and lasting damage will be done to the wider health of the community if a given organization does not stay afloat through this crisis. Potential areas of deep impact could include health care supplies, the safety of food chains, or critical communication services that allow frontline workers to share information.
These loans will also require an initial referral from an existing investor. Apply Here.