Nonprofit Loan Fund of Tucson & Southern Arizona – A Creative Financial Solution
We are proud to be a founding member (through our president, Mike Hannley) of the Nonprofit Loan Fund (NPLF) of Tucson and Southern Arizona. Established in 2014, NPLF has made nearly $1.3 million in loans to local nonprofits to help strengthen operations, bridge cash-flow gaps, further their initiatives and make them overall financially sustainable.
Some of the many worthy recipients of NPLF loans include YWCA of Southern Arizona, Southwest Folklife Alliance, Esperanza En Escalante, Tucson Botanical Gardens and International Sonoran Desert Alliance. Loans range from $10,000 to $200,000 for up to five years.
NPLF’s liquidity is funded by a variety of investors which lend money to NPLF for a term of up to 10 years. Those investors include public agencies, nonprofits, individuals and several private foundations.
Investors receive two percent interest, while NPLF lends money out to local nonprofits at approximately eight percent. Since its inception, NPLF has grown its loan pool from $450,000 and three investors to nine investors and $850,000, with an additional $200,000 pending.
“This system is win-win,” says Don Jenks, Executive Vice President and Regional Credit Administrator for Bank of Tucson and NPLF board chair. “Investors make a return on their investment while also helping many wonderful nonprofit organizations make a difference in our community.”
Each loan recipient is thoroughly vetted, and the loan is structured to meet the unique needs of the recipient organization.
“With grant and donor funding, that capital is often restricted to certain uses,” said Jenks. “A NPLF loan gives the nonprofit the leeway to use the loan funds for general operations or other important priorities.”
For True Concord Voices & Orchestra, it was a cash flow issue that brought them to NPLF. In the fall of 2015, True Concord made its New York debut at Lincoln Center, a performance that hit number five on the Billboard charts. The performance was swiftly followed by a Grammy nomination for a composition performed on the group’s first internationally released album “Far in the Heavens.” While True Concord maintains a balanced budget, cash flow was not adequate to fund the travel requirements that arose from these honors. Fortunately, NPLF helped bridge the gap.
The NPLF board continues to recruit additional investors as well as collaborate with other lenders in Arizona to provide options for local nonprofits. Board members are also pursuing grants to expand the financial education programs NPLF offers to area nonprofits — education that will help them achieve long-term financial stability. Most recently, NPLF has applied for Community Development Financial Institution (CDFI) certification, which will provide access to federal funding and partnerships with local and national financial institutions. Our bank is proud to also provide some of the financial support for NPLF’s operations.
Launching NPLF was made possible through the joint efforts of the Community Foundation of Southern Arizona (CFSA), and Diamond Family Philanthropies.
For more information about NPLF, visit http://nonprofit-loans.org/
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Posted on February 14, 2017, in Charity and tagged CDFI, Community Development Financial Institution, Community Foundation of Southern Arizona, Diamond Family Philanthropies, Don Jenks, Esperanza En Escalante, Far in Heavens, Grammy, International Sonoran Desert Alliance, Miek Hannley, nonprofit loan fund, Southwest Folklife Alliance, True Concord Voices & Orchestra, Tucson Botanical Gardens, YWCA of Southern Arizona. Bookmark the permalink. Leave a comment.