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Increase in Donations: Nonprofits to Find Funding for Expansion Plans

Sunday, 22 July 2012 19:40

NonprofitWhile many nonprofit organizations were hit hard by the recent economic downturns, there may be light at the end of the tunnel. A survey conducted by the Nonprofit Research Collaborative indicated that over half of all charitable institutions reported increased donations for 2011. According to the Nonprofit Fundraising Study, 70 percent of these organizations indicated that they expected increases in 2012 as well. This is good news not only for nonprofits in the U.S. but also for the numerous individuals who seek help from these institutions each year. As discretionary income continues to rise throughout the economy, many nonprofits are looking to the future and planning to expand their services and programs to reach an even wider audience.

Managing the mission

Finding the funds to expand and offer a greater array of services to the community can be a challenging undertaking. By their very nature, nonprofit organizations do not turn a profit for shareholders. Because they put most of their funds directly to work in their core mission, these institutions may not be able to provide the same sorts of financial criteria that are available for traditional profit-based businesses. As a result, they may find it difficult to find a lender willing to finance expansion plans without providing considerable collateral to secure the loan.

Collateralizing charity

In some cases, the collateral for expansion can come from existing buildings owned by the nonprofit organization. Institutions can leverage the equity already accrued in their current facilities to acquire commercial loan capital for expanding those facilities or expanding to an additional location. In order to achieve eligibility for these traditional loan arrangements, nonprofits typically must provide significant collateral. However, given the current state of the commercial real estate market, that collateral may be hard to find.

Government-sponsored lending arrangements

Another option for charitable institutions, religious organizations and other nonprofits is to seek governmental assistance for their expansion plans. While this may not be practical in all cases, local, state and federal governments often sponsor programs that can provide needed funding for expanding services and funding new facilities for nonprofit organizations. These programs have relatively stringent requirements and may require changes in the workflows and functioning of the nonprofit organization; as a result, many nonprofits look to private investors to achieve the funding they need to expand and serve their communities more effectively.

Private investments

While donations are likely to make up the lion's share of the funding received by charitable institutions, private investments are sometimes necessary to achieve the goals of the nonprofit and to serve its constituency adequately. CNF Exchange can put nonprofits in touch with private investors through its Investor Exchange program. By connecting directly with these lenders, nonprofits can take the next step in providing relevant, immediate help to those who need it most.

CNF Exchange specializes in helping nonprofit organizations and other businesses achieve the funding they need to accomplish their short and long-term expansion goals. By working with borrowers to help them navigate the paperwork and qualifications required to achieve funding, CNF Exchange provides real assistance and support for nonprofits, religious organizations and other charitable institutions throughout the country.

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