Open Road Alliance Mobilizes Emergency Funding Response to Assist COVID-Affected Social Enterprises
Loan and Grant Activity Spike Along with Increased Investor Interest
New York, NY, July 13, 2020– Open Road Alliance (Open Road), the market-leading organization providing short-term bridge loans and grants to social enterprises facing unexpected roadblocks, today announced an update on its COVID-19 global emergency funding response. With a mission to keep impact on track in an unpredictable world, Open Road implemented its COVID-19 rapid response funding within the first week of the pandemic, quickly mobilizing fast and flexible financial assistance to social enterprises affected by COVID-19. Given the organization’s expertise in the emergency funding space, the Open Road Impact Fund (Impact Fund) has also seen a timely and consistent uptick of interest from investors seeking effective and resilient funding solutions during this crisis.
Since the beginning of the global pandemic in mid-March, Open Road has received more than 1,200 funding inquiries, totaling more than $150 million in requests. In comparison, the organization had a total of 351 inquiries in all of 2019. Adjusting its screening and funding criteria to better align with the urgent needs of the crisis, Open Road has made 13 loans and 27 grants for a total of more than $5.5 million in disbursements. Out of the nearly $5.5 million granted, about 71 percent account for loans. This is the largest number of grants and loans in both volume and dollars that the organization has ever made in such a short time frame.
“Social enterprises depend on access to fast and flexible capital as much as we depend on them for their impact, and these enterprises have been especially hard-hit by the COVID-19 crisis,” said Open Road’s Chief Executive Officer, Maya Winkelstein. “Now, more than ever, we must lean into their needs as we collectively endure the repercussions of COVID-19. As the only funder exclusively focused on ‘when the unexpected occurs,’ Open Road is increasingly focused on finding new ways to drive funding solutions at scale.”
“Our data shows that the scale of the demand for emergency funding is unlike anything we’ve seen before, and we proudly stand in partnership with others, such as members of the World Economic Forum COVID Response Alliance for Social Entrepreneurs, who are working to get ahead of the challenges caused by COVID and keep impact on track.”
Investor interest in the Impact Fund has also spiked, as institutional investors, family offices and foundations seek ways to use their capital to become part of the solution. Since the organization’s first close in March, the Impact Fund has added an additional three investors, in addition to co-funding partnerships with two others. The Impact Fund seeks to invest $100 million which, based on Open Road’s historic averages, would catalyze $1 billion of impact.
“Investors are showing their resolve and commitment to helping the impact investing sector manage through the COVID crisis,” said Caroline Bressan, Managing Director, Open Road Alliance. “I believe the increased demand for our Impact Fund speaks to the growing recognition that this crisis requires fast action so impact can continue to scale, and this is what Open Road has been about since day one. We are grateful to investors like Blue Haven Initiative who are joining the cause.”
“As investors who work closely with social entrepreneurs and nonprofits, we know we need to be strong partners as they navigate their organizations through the pandemic,” says Liesel Pritzker Simmons, co-founder and principal of Blue Haven Initiative. “Our family office believes grants and bridge loans can be helpful when it comes to keeping impact on track. Since Open Road Alliance already had a structure in place to help social enterprises, we were pleased to support them as part of our COVID-19 relief efforts.”
A Global portfolio for a Global Crisis
Open Road continues to accept funding requests from social enterprises across multiple sectors and geographies. While every enterprise in its portfolio is experiencing an emergency rooted in COVID-19, the manifestation of the pandemic has taken a variety of forms including delayed disbursements from existing funders, supply chain disruptions, and lost revenue. The occasional opportunity to ramp up activities, such as telehealth, also emerged, alongside a contraction of available capital.
While Open Road is still monitoring specific long-term trends in its pipeline, the majority of applications are from North America and Sub-Saharan Africa, with nearly half categorized in the area of Health and Education. The geographic and sector breakdown of inquiries received during COVID-19 is as follows (note that organizations are allowed to identify across multiple sectors).
About Open Road Alliance
Open Road Alliance serves the social sector by keeping impact on track in an unpredictable world. Founded in 2012, Open Road helps nonprofits and social enterprises overcome obstacles to impact. From small startup solar companies in Tanzania to human rights organizations in Syria, Open Road Alliance works across geographies and sectors. As the market leader in social sector bridge funding, our goal is to ensure innovative efforts to address the world’s greatest challenges can carry on without interruption. We do this by offering fast, flexible funding via charitable grants and loans. Open Road Alliance has provided more than 270 grants and loans to 225 organizations across 60+ countries, keeping $450M+ of impact on track.