Many congrats to the Nonprofit Loan Fund (NPLF) of Tucson and Southern Arizona for being recognized by the U.S. Department of the Treasury as a Certified Community Development Financial Institution (CDFI). This designation will give NPLF access to loan funds through various Department of Treasury programs.
We have profiled NPLF previously on our blog for the good work it does providing financing to promote economic and community development in distressed and underserved areas. Don Jenks, Executive Vice President and Regional Credit Administrator for Bank of Tucson, chairs the NPLF board.
As Don pointed out, “[The NPLF] system is a win-win. Investors make a return on their investment while also helping many wonderful nonprofit organizations make a difference in our community.”
NPLF has provided nearly $2 million in loans to local nonprofits to help strengthen operations, bridge cash-flow gaps, further their initiatives and make them financially sustainable. Investors receive 2% interest, while NPLF lends money out to local nonprofits at approximately 8% interest rate. Loans range from $10,000 to $200,000 for up to five years.
After receiving the CDFI designation, NPLF applied for and will receive operational funds in the first quarter of 2018 to help run its operations. This funding will allow NPLF to bring on an additional staff member and free up the executive director to market the loan services available through NPLF to local nonprofit organizations.
“Loan demand from local nonprofits has been very strong this past year,” said Don. “More nonprofits are recognizing how NPLF can help them, but we still need to do a lot more to educate the nonprofit community about how an NPLF loan is structured to work for an organization that may not qualify for a conventional loan.”
The NPLF board plans to apply for additional funds from the U.S. Department of Treasury next year as well, this time to fund capital rather than operations.
“In the meantime, being a CDFI will also qualify NPLF to apply for community reinvestment act (CRA) funds from banks,” said Don.
Arizona Daily Star wrote about the CDFI designation for NPLF, pointing out that “NPLF is the only local CDFI to target nonprofit organizations throughout Southern Arizona.”
Locally, beneficiaries of NPLF loans include Southwest Folklife Alliance, Esperanza en Escalante, International School of Tucson, True Concord, Tucson Botanical Gardens, YWCA of Southern Arizona and more.
Many of the organizations have provided testimonials for NPLF’s website, including:
“’The NPLF loan made it possible for Tucson Botanical Gardens to move forward with confidence on major financial commitments.’ An NPLF loan was bridge financing during the pledge phase of a capital campaign [and] ensured that they could complete the new Visitors Center in time for opening of a new exhibit.”
NPLF loans have helped nonprofit organizations in our community strengthen Tucson’s reputation as a destination, educate Tucson citizens, build affordable housing and much more. It is a model for the dynamic relationship private citizens, businesses and nonprofit organizations can build to transform their communities for the better. And now, NPLF adds a Federal government agency to that formula for success.
Bank of Tucson is proud to support the efforts of Don and NPLF to elevate our community.