Nonprofit Loan Fund

Denver’s Human Rights and Community Partnerships (HRCP) Agency and Office of Nonprofit Engagement is establishing a contract with the Nonprofit Finance Fund to provide lending services for a contract amount of $250,000. The funds distributed to the Nonprofit Finance Fund will be used to capitalize the Metro Denver Nonprofit Loan Fund.  The Metro Denver Loan Fund provides loans to qualifying individual nonprofit organizations and also strengthens the nonprofit sector so community members can continue to access needed services during and following the COVID-19 pandemic. 

 

Program Description

Nonprofits, especially those serving the communities hardest hit by the pandemic, are vital to our recovery. Government loans, grants and charitable contributions have been critical during the immediate crisis. However, as we emerge from the crisis, we have an opportunity to combine financial and technical assistance to help strengthen individual nonprofit organizations, as well as the sector, so the communities hardest hit are able to do more than recover- they can thrive.

While some organizations may rely on grant dollars alone, traditional philanthropy is limited. Some organizations are positioned to add debt to their toolkit, opening another avenue for needed funds. Whether these investments are in the form of working capital, bridge loans, or other financial support, these organizations can take on low-interest loans to span gaps in the flow of their revenue during this uncertain and critical time. Moreover, for nonprofits with little experience with debt, this is a low-risk way to develop credit worthiness and learn how to manage debt, making them better candidates for other financing from the 'commercial' market in the future.

The inclusion of technical assistance in this program is a strong benefit to nonprofit organizations, which may find that they can strengthen their business planning, that they would benefit from a restructure of their business model to better serve their constituents or that a strategic alliance with another organization would enhance service provision.

 

Program Purpose

The purpose of this program is to strengthen both individual nonprofits as well as the nonprofit sector so that individual community members can continue to access needed services by providing:

  • Technical assistance to help nonprofits assess their business operations so that they can be adapted to a changed or changing environment
  • Loans with a grace period to support business operations and/or business adaptations to ensure sustainability of services

 

Who's eligible?

Nonprofit organizations must:

  • Be recognized by the Internal Revenue Service as organizations described in section 501(c)(3) of the Code and are not private foundations as defined in Section 509(a) of the Code Be tax-exempt under 501(c)(3);
  • Be located in and primarily serve the City and County of Denver.
  • Have budgets of less than $5M;
  • Serve and be run by excluded populations, including people of color, women, immigrants, and others; and
  • Be facing financial challenges related to the COVID-19 pandemic.

Additionally, organizations fiscally sponsored by the Colorado Nonprofit Development Center or a qualified 501(c)(3) are eligible to apply.

Furthermore, based on ARPA definitions, nonprofit organizations who receive funding must be either impacted or disproportionately impacted by the COVID19 pandemic.

This determination will be based off the City and County of Denver’s Denver Opportunity Index mapping tool. This mapping tool will show which neighborhoods of Denver have been least impacted and most impacted by the pandemic based off of a 1-5 grading scale, with 1 being least impacted and 5 being most impacted. By this scale, neighborhoods with a rating of 2 or 3 would be considered impacted and those with a rating of a 4 or 5 would be considering disproportionately impacted.

Denver’s Office of Nonprofit Engagement will provide access and guidance on this mapping tool to the Nonprofit Finance Fund. 

 

How do the loans work?

Loans made under the Fund shall support one or more of the following needs:

  • Stabilization: Supports a necessary service that must continue for the sake of communities
  • Sustainability: Gives nonprofits the opportunity to re-think their business and find new and diverse revenue sources that are more sustainable in the future such as fee for service, reimbursements, or long-term contracts
  • Growth/Scale: Increases nonprofit service capacity and the number of people they serve

There will be two types of loans:

  1. Short term bridge loan to provide access to cash while awaiting receipt of other revenues. These loans would allow organizations to continue to provide services and pay staff and other expenses while waiting for likely government or philanthropic funding or other revenue to be received.
  2. Term loan that would a) give nonprofits the opportunity to re-think their business model and find new and diverse revenue sources that are more sustainable in the future such as fee for service, reimbursements, or long-term contracts or b) increases service capacity and the number of people they serve ahead of revenue

 

How to apply?

Applications are currently closed.