Why was the fund created?
Nonprofits, especially those serving the communities hardest hit by the pandemic, are vital to our region’s recovery. Government loans, grants and charitable contributions have been critical tools in support of nonprofits’ immediate responses to COVID-19. However, as we look to mitigate the pandemic’s lasting impacts, foundations have an opportunity to provide financial and technical assistance that will help strengthen specific nonprofit organizations, and the nonprofit sector more broadly, so that the most affected communities do not just recover, but thrive.
When organizations led-by and/or serving people of color receive sufficient funding, they excel. Yet, there is a long history of these groups being underserved and discriminated against by traditional banking. A no-interest loan program is a low-risk way for nonprofits to manage debt and build credit, making them better candidates for financing from the commercial market in the future.
Loans also enable participating funders to reinvest all repaid dollars back into the community, creating a more sustainable funding source than the one-time grants typically made by foundations.
What will the loans provide?
Stabilization: Financial assistance for smaller nonprofits whose work must continue for the sake of the communities they serve.
Sustainability: Opportunity for nonprofits to develop new and diverse revenue sources, such as fee for service, reimbursements or long-term contracts, that are more sustainable than one-time grants.
Experience: A low-risk way for nonprofits to manage debt and build credit, making them better candidates for financing from the commercial market in the future.
Growth/Scale: Opportunity to increase nonprofit service capacity and the number of people they are able to serve.
Loans will be between $50,000 – $250,000 with terms up to 36 months, no payments for the first year and 0% interest.
Who is eligible?
- 501(c)(3) nonprofits located in seven-county Denver metro area or those that have an endowment at Community First Foundation, Rose Community Foundation or The Denver Foundation.
- Organizations with demonstrated financial need, indication that loan capital is the appropriate financial tool to meet that need, and budgets below $5,000,000.
- Organizations that are led-by and/or serving people of color.
- Organizations with satisfactory operational history and operating outlook. We do not have a one-size-fits-all model for this requirement, but aspects we look for are: consistent operating surpluses; reliable revenue sources; sufficient cash flow for operations and debt; positive year-to-year cash balance; and on-time debt payment
- Organizations with at least 2.5 years of operational history
How long will funding be available?
Our goal is to provide funding as quickly as possible to as many qualifying organizations as possible. We anticipate multiple rounds of funding. The exact number of funding rounds is dependent on several factors, including the number of organizations that apply and the number of additional investments the Fund receives.
What are the loan terms?
0% interest
Unsecured
No payments for first year
36-month term
No prepayment penalties
How can nonprofits demonstrate that loan capital is the appropriate tool to meet their financial needs?
If you missed it, we recommend watching Nonprofit Finance Fund’s “Introduction to Debt” presentation (the recording is at the bottom of this page) which covered what lenders typically look for when evaluating loan applications from nonprofits. The eligibility requirements are also meant to be helpful barometers for gauging organizational readiness.
If my organization meets most but not all of the eligibility requirements, can I still apply?
- The eligibility requirements are intended to demonstrate what the Fund is looking for to ensure that loan recipients are ready to take on debt. We want these loans to be a benefit to nonprofits, not a hindrance.
- They are not meant to be so rigid that they prevent an organization that may not meet every requirement, but is otherwise a good fit, from applying. If your organization has a unique circumstance or doesn’t fit within each parameter, we welcome a conversation with you to help your organization determine whether it makes sense to apply.
Is there other information, in addition to the application, that nonprofits need to submit in order to be approved for a loan?
- Barring unique circumstances, applicants can expect that all documents and financial statements needed for approval will be collected through the application.
- NFF will not collect closing items, such as insurance certificates, a signed officer’s certificate, board borrowing resolution, and good standing certificate, until after applications are approved and they are ready to move forward with closing.
Will this Fund replace grantmaking from the three foundations?
No. The goal of the Fund is to extend additional support to nonprofit organizations, not to replace grant funding. Community First Foundation, The Denver Foundation and Rose Community Foundation remain fully committed to supporting metro Denver nonprofits through traditional grantmaking
Can fiscally sponsored organizations apply?
We consider each fiscally sponsored organization on a case-by-case basis. If your organization has a fiscal sponsor, we encourage you to reach out to us to schedule a conversation before applying, so we can understand your situation and help provide guidance.
