We're pleased to announce the Open Road Impact Fund (Impact Fund). The Impact Fund will provide short-term bridge loans to social impact organizations that run into unexpected obstacles on their path to scale, ensuring that these businesses survive and thrive.
We are the market-leading organization dedicated to keeping impact on track by helping social entrepreneurs and nonprofits bridge financing gaps. To meet immediate needs, we offer fast, flexible, and affordable funding to organizations facing discrete, unexpected roadblocks during project implementation. We fund via two portfolios, charitable grants and loans.
We are proud of our reputation as a trusted partner to social entrepreneurs and are committed to promoting the long-term, sector-wide adoption of better risk management practices in the social impact sector. We were founded in 2012 by psychologist and philanthropist Dr. Laurie Michaels to address the need for contingency funds and the absence of risk management practices in philanthropy.
The Impact Fund is a $40m fund established by Open Road Alliance that will provide short-term bridge loans to social impact organizations that run into unexpected obstacles on their path to scale, thereby ensuring that these businesses survive and thrive. The Impact Fund provides investors the opportunity to access high impact investments across multiple geographies that also provide a financial return.
The Impact Fund is the first fund by Open Road that is open to outside investors including family offices, foundations, and impact-first investors and will provide loans ranging from $100,000 to $1,000,000 to social impact organizations located primarily in Africa, U.S., Latin America, and South Asia. The Impact Fund is designed to provide investors with a return of 2-4%.
The Impact Fund is targeting family offices, foundations, high net worth individuals and impact-first investors.
Yes! We are highly-specialized experts at what we do and have proven this model with our first fund – both the market need for this type of financing as well as our ability to successfully identify those organizations with the highest likelihood of repayment. We launched our first loan fund, Open Road Ventures (ORV), in 2017 with proprietary capital. To-date, ORV has invested more than $19.5m across 65 deals providing an average 4.5% return with a low 0.3% default rate.
You can learn more about Open Road Ventures here
All of the investments made by Open Road Ventures are high impact investments. Open Road estimates that the Impact Fund, over the first five years, will disburse $100m in short-term loans across 200 organizations, and keeping up to $1b of impact on track, all the while providing investors with a financial return. Our estimate is based on our own track record. For each dollar invested, Open Road Ventures returns $9 in impact. This 9x leverage has already resulted in $186m of additional impact across the ORV portfolio, to date.
The Impact Fund will loan to social impact enterprises and non-profit organizations to help them overcome unexpected financial roadblocks so they can scale. The problem we help fix exists independent of sectors and geography, so the Impact Fund will loan to organizations regardless of sector and located primarily in Africa, U.S., Latin America, and South Asia.
We are highly-specialized experts in the niche market of short-term bridge financing. Our first fund, Open Road Ventures, has proven this model in both the market need for this type of financing as well as our ability to successfully identify those organizations with the highest likelihood of repayment. ORV has a low borrower default rate of 0.3%.
Our proprietary risk assessment process is specific to the market of bridge financing. Core to Open Road’s repayment success is our customer service credo and focus on impact, which aligns our repayment with the goals of our borrowers. We source most of our pipeline directly from other impact investing organizations, creating a trusted network of referral partners. We have shown that we can do this quickly and with a high degree of success.
The Impact Fund will only provide a loan to a nonprofit or social enterprise that is experiencing a short-term cash gap, where Open Road can provide a bridge loan to committed future funding. The Impact Fund is sector agnostic and will loan to social impact organizations located primarily in Africa, U.S., Latin America, and South Asia. Our funds are only used to support mid-implementation projects overcome unexpected obstacles. To learn more about our criteria, please visit our investments page.
To invest in the fund or learn more about investment offerings, please contact us here.