Syracuse, N.Y. — The Community Foundation and a local credit union are working together to offer short-term loans for area non-profits to speed up their efforts and help people in the Syracuse area.
The new bridge loan program is aimed at organizations that already have approval for state and federal money — but are waiting for that money to come in to further their missions, said Frank Ridzi, the vice president of community investment at the Community Foundation.
The foundation and Cooperative Federal are starting with a pool of $500,000. Organizations can apply to borrow $25,000 to $150,000, with an interest rate of about 6%. The loans will mature in six to 18 months with the full balance due when the borrower receives their full government grants.
Successful applicants will include organizations aiming to build wealth locally, improve the local economy or increase access to capital for those who have not had it in the past.
“Cooperative Federal is focused on expanding access to capital in ways that benefit diverse people and communities,” Christina Sauve, the CEO of Cooperative Federal said in a press release.
The loans can be used for programming or capital and are decided on a case by case basis, Ridzi said.
While the Community Foundation has invested in nonprofits in the past, this is the first formal and expedited loan program. Since the program recently launched, no loans have been given out yet, but Ridzi said they are already seeing interest from local nonprofits.
It’s common for nonprofits to wait several months to a year to get reimbursed by the state or federal government for their projects and initiatives. In a Community Foundation survey of more than 50 local nonprofit organizations, 58% said they experienced funding delays from New York state grant contracts.
“We’re constantly trying to listen to our nonprofit partner’s needs,” Ridzi said. “Part of our relationship is nonprofits telling us about their stressors.”
When nonprofits face funding delays, they often have to tap into their savings. According to the Community Foundation survey, about 36% of nonprofits have to reallocate funds from other programs, 33% have to scale down or seize programs and 29% have to take out a line of credit, directly impacting their grant money.
The Community Foundation has helped Home Headquarters in the past with similar loans. Karen Schroeder, the chief communications officer at Home Headquarters estimates that the organization likely expended $10 million in funding this year that hasn’t been reimbursed.
Home Headquarters works to do a variety of housing initiatives in Syracuse such as new construction and home rehabs. To keep working on their projects despite funding delays at the state and federal levels, the organization contacted the Community Foundation for help.
“We often front the dollars on things and the state doesn’t usually pay until a project is fully complete,” Schroeder said. “The Community Foundation really stepped up and figured this out. They listened to our needs and were flexible and creative.”
Under the new program, organizations will borrow Community Foundation dollars on deposit at Cooperative Federal. The foundation will approve applications before forwarding them to the credit union.
Nonprofits and unincorporated organizations looking to apply for the bridge loan program should reach out to the Community Investment Team at the Community Foundation. The Vice President of Community Investment, Frank Ridzi can be reached by phone or email at 315-883-5553 and fridzi@cnycf.org.
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