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.