The Community Forward Fund (CFF) will make loans or arrange financing for non-profits and charities.
Its structure is designed to address a gap in access to capital for small- and medium-sized organizations.
“We are pleased to be joining a number of community foundations in Ontario as supporters of this investment vehicle in support of our vital voluntary sector,” said Rob Welch, a director on the board of the Niagara Community Foundation.
The initiative follows a recommendation contained in a national report called Mobilizing Private Capital for Public Good that called on community foundations to invest at least 10 per cent of their capital in mission-related investments by 2020.
The board began studying the idea in June 2011.
“We wanted to make an initial modest investment and will be assessing whether it makes sense to move to the 10 per cent goal by 2020,”said Welch, who led the board through its due diligence process.
Following the announcement made today at the 11th Annual Canadian Business Leaders Breakfast, the Foundation hosted a workshop for 25 organizations across Niagara providing them with information on alternate forms of financing available for their projects.
Community Forward Fund CEO Derek Ballantyne said: “We look forward to working with the Niagara Community Foundation in pursuing their objectives of mission-related investment in area communities.
“The Foundation’s local knowledge and close community ties are an essential asset to this innovative approach to supporting and strengthening non-profit and charitable organizations. We are very pleased to receive this significant investment in the Community Forward Fund and welcome our collaboration with the Foundation.”
Created in 2000 the Niagara Community Foundation has raised more than $20 million in endowment funds and has granted in excess of $4.8 million to charities working in the culture, environment, social services, health, education and community development.
The Community Forward Fund (CFF) makes loans or arranges financing for Canadian nonprofits and charities. Its structure has been designed to address a gap in access to patient, working capital and bridge loans for the sector for small and medium sized organizations. An important part of CFF’s role will also be to provide financial coaching and review services, assessment tools and to help build financial skill capacity for sector organizations.
CFF will provide a combination of revolving credit and term loans, up to five years. While CFF is currently finalizing details of its planned loan portfolio, it envisions initial loan sizes ranging between $35,000 and $250,000 (which CFF expects will complement most existing lenders). For larger loans, it plans to work with partner institutions.
Research indicates that there is a market for one year bridge loans, and three and five year term loans. CFF will provide a combination of revolving credit and term loans, up to five years.
Loan interest will be dependent on the type of loan or guarantee plus other fees.
(Submitted by the Niagara Community Foundation)