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Community Foundation Funding Launches Nonprofit Bridge Loan Fund

The bridge loan fund will help nonprofit organizations continue essential community services while awaiting the receipt of approved grant funding.

The Central New York Community Foundation’s local impact investing program closed on a $500,000 deposit to Cooperative Federal (Coop Fed) to launch a nonprofit bridge loan program.

Coop Fed is a Community Development Financial Institution (CDFI) and federally chartered credit union that combines counseling, technical assistance and education with financial tools such as mortgages, loans and account services to help its members reach their goals and build financial stability. Its members are historically underbanked and live and work in disinvested communities.

The bridge loan fund will help nonprofit organizations continue essential community services while awaiting the receipt of approved grant funding. It is common for government agencies and other funders to require awardees to draw down funds on a reimbursement basis, often taking several months to process reimbursements. A Community Foundation survey of more than 50 local nonprofit organizations found that 58% have experienced funding delays from New York State grant contracts.

“Cooperative Federal is focused on expanding access to capital in ways that benefit diverse people and communities,” said Chrisina Sauve, CEO of Cooperative Federal. “Bridge loans have the double impact of supporting and sustaining local nonprofits, while also making it possible for those nonprofits to bring outside dollars into our region.”

Loans will be fully secured by Community Foundation funds on deposit at Coop Fed. Nonprofit organizations and unincorporated organizations working with a 501(c)3 fiscal sponsor are eligible to borrow an amount equal to their first anticipated disbursement under a fully executed funding agreement, ranging from $25,000 to $150,000. The Community Foundation will be responsible for intake, loan application packaging and preliminary due diligence review. Applications that meet the Community Foundation’s internal standards will be recommended to Coop Fed.

“It is not uncommon for Central New York nonprofits to wait several months to receive grant payments, forcing them to alter services or find other stop-gap measures,” said Frank Ridzi, vice president of community investment at the Community Foundation. “The vital work of local community organizations is our top priority, so by providing flexible support through this loan fund, we hope to help ensure their services continue.”

This investment marks a total of more than $3.6 million now advancing housing, business development and lending through the Community Foundation’s local impact investing program. Impact investing allows the organization to use its financial resources to make investments that generate both financial returns and positive social outcomes. In 2023, the foundation’s board of directors approved a policy that allows the use of up to 5% of its main investment pool for the purpose of impact investment. So far, 41 new homes have been built and $56.2 million has been leveraged for home, personal and business loans.

The Community Foundation’s local impact investing program is designed to tackle a wide range of community needs with an emphasis on helping Central New York residents build wealth, equipping residents with the opportunity to contribute to the economic performance of the region and providing under-resourced communities and nonprofit organizations access to capital.

 

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