Photo illustration by by Nick Youngson via Pix4free

Bridging the Gap

A local public charity has launched a nonprofit bridge loan program to help organizations as they wait for approved government grants. 

By Laura Román López 

More than half of the nonprofits in New York state experience delays in getting state funds for programs the state has already contracted for.

The Central New York Community Foundation hopes its new nonprofit bridge-loan program, launched earlier this month, will help ease the burden caused by those delays. A collaborative effort with Cooperative Federal Credit Union, the program will help nonprofit organizations and organizations working with  501(c)3 fiscal sponsors to borrow money as they wait for the funding. 

“Cooperative Federal is focused on expanding access to capital in ways that benefit diverse people and communities,” said Christina Sauve, CEO of Cooperative Federal, in a press release. “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.”

Using data from the state Comptroller’s office, the community foundation reports that funding delays for already approved projects and grants force 43% of the state’s nonprofits to tap into savings or reserves to cover costs, and 36% had to reallocate funds from other programs. 

Frank Ridzi, vice president of community investment at the Community Foundation, said that they encourage organizations to apply for federal and state grants, but they also want to help the community as they wait for the funds.

“We really had three purposes in mind,” Ridzi said. “We wanted to help residents build wealth, we wanted to contribute to the regional economy, and we also wanted to provide capital to under-resourced communities and nonprofits; people who otherwise weren’t really able to get money through banks.” 

To receive funding, nonprofits must reach out to the Community Foundation and their impact investing team. They will assess organizations through an intake process, which includes a loan application package and a due diligence review before recommending any company to Cooperative Federal Credit Union.

“The Bridge Loan Program will reduce the stress for nonprofits caused by funding delays,” Ridzi said. “It won’t eliminate the problem, but it will help them to keep the momentum going on the very important work they’re doing.” 

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