Roland Bleyer’s Philanthropic Conditional Non-Repayable Loans

A successful business professional, Roland Bleyer has developed innovative structured-finance products to meet the needs of promising young companies. Mr. Bleyer also utilizes his expertise to provide financial support to worthy causes, such as the construction of infrastructure or the amelioration of water supplies in developing nations. One of the ways in which he supports these projects is through the provision of conditional non-repayable loans (or grants).

Conditional loans of this nature can be designed in a wide variety of ways, but two of the most common approaches rely on the principles of underwriting or of fund matching to stimulate the recipient’s own fundraising activities.

In an underwriting approach, the organization is offered a loan conditional upon the accomplishment of certain types of activities. The organization must make a good-faith effort to raise funds through other channels, but if they fail through no fault of their own, then the loan is granted. The terms of the conditional loan are typically laid out in detail ahead of time, and the organization must show definitively what actions it has taken to raise the required funds. Oftentimes, having the conditional loan in place is enough to attract other investors, as they see that the project will go ahead regardless of whether or not the full fundraising goal is met.

In a fund-matching approach, the loan is granted to the organization on the condition that the funds are matched by other donors. Therefore, a $10 million loan would require the organization to fund raise an additional $10 million from other sources. Again, with the conditional loan in place, donors are often more willing to contribute to the cause.

Both of these approaches rely on leveraging goodwill or reputation. The conditional loan serves as a validation of the activities of the recipient organization and helps to build positive attention among potential donor groups.

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