A recent article in Chronicle of Philanthropy titled “Where Did The Funding Go?” provides a sobering assessment of the nonprofit sector, and highlights FJC’s recent loan to HERE Arts Center as a “creative solution.”

The article by Jim Rendon, published November 20, 2024, notes that organizations across the country are facing dire financial straits that have led to hiring freezes, program cuts, layoffs, and in some cases, closures.  He cites the challenges nonprofits have faced coming out of the Covid-19 pandemic, reduced financial support, and rising costs associated with the recent inflationary economy. 

Finding a bright spot in an otherwise bleak financial picture for nonprofits, the article cites a loan from a new DAF account at FJC, capitalized by donors Jennifer Suh Whitfield, HERE Arts Center’s Board Chair, and her husband Benjamin.

An excerpt is included below, and the full article can be found here.

The past few years have been challenging for HERE Arts Center in New York City. The organization, founded 30 years ago, runs a performance space, but audiences haven’t returned to pre-pandemic levels. The group had been running a deficit for years and was eating into its assets to continue operating. In June, the center’s founding director retired, and it brought on four co-directors.

Donors stepped up and provided additional, often unrestricted funding during the pandemic, but now that the emergency is over, many funders have moved on, says Lauren Miller, one of the center’s new co-directors. Some grant makers changed priorities and dollars have been scarce, she says. Like many new CEOs who have started in the past few years, Miller has found that some donors won’t support an organization in the first years after a leadership change.

“Just when we need new solutions and we need people to think differently and give differently, we’re seeing philanthropy retrench back to the pre-Covid status quo,” she says.

Miller and her co-directors have cut costs. Instead of large, costly productions, the organization is focusing on more one-person shows. It has just nine staff members, down from a peak of 20. The organization is trying to expand its base of donors. The center’s goal is to find a larger number of donors who make modest gifts, rather than depend on a handful of large donors who can give a lot, but who will have a big impact on the group’s finances if their giving changes. Miller wants to partner with other arts groups to seek funding together — many of them have similar missions and even work with the same artists, so why should they compete for money?

The center’s board chair came up with an innovative solution to help it address the financial shortfall. She created a donor-advised fund to give HERE Arts Center a loan. It was money that Miller says the chair was planning to give to charity, perhaps over several years. By structuring the support as a low-interest loan, the group got the money it needed up front. The center is paying back only interest on the loan to start, so the payments are low now while the group needs to conserve funds. The money that the group pays on the loan goes back into the DAF so it can be used for other charitable purposes later.

“By creating these very favorable conditions that can move the money quickly to where we needed it, it protected the organization. It was a real lifesaver,” Miller says. “We could start the next fiscal year fresh without having to make dramatic cuts to our staff or to our programs.”

The DAF was created, and the loan is being serviced by FJC – A Foundation of Philanthropic Funds. The group works with donors to help nonprofits fill funding gaps that government, banks, and other donors and grant makers won’t. A commercial lender never would have made the loan to HERE Arts Center, says Sam Marks, FJC’s CEO.

“You really needed a lender that was looking at it not just from a perspective of credit risk, but from a perspective of really understanding the fundamental business and committed to the mission — a real friendly, mission-based lender,” says Marks.

This creative approach has made Miller optimistic that the center can thrive in the coming years — and also that philanthropy, at least in some places, is starting to become more agile and listen to the needs of nonprofits.

“Those of us who are doing things differently and who are trying to innovate and create more interconnection, partnering with our peers instead of competing with them, and bringing new programs in and widening the aperture of what’s possible for our service, we’re being forced to take calculated risks to survive the present circumstances,” she says. “I think we need philanthropy to be as entrepreneurial and risk taking and innovative if they want to see us succeed in those risks.”

Visit Chronicle of Philanthropy at https://www.philanthropy.com/

On the recommendation of donors Andrew Lachman and Ruth Messinger, FJC has provided $1 million to Hebrew Free Loan Society, which will help hundreds of New Yorkers refinance credit card debt, helping them regain financial stability.

The grant funds the Fresh Start Loan program, which provides New Yorkers of all backgrounds 0%-interest, no-fee loans to pay down expensive credit card debt.  Due in part to pressures from price inflation, the Federal Reserve reports that credit card debt is at an all-time high. For lower-income households, credit cards can carry a rate of interest as high as 36%.  This can present an insurmountable obstacle to repayment, and many New Yorkers often find themselves with high monthly payments that can drag down their efforts to regain financial stability.  

Borrowers under Fresh Start are able to consolidate and pay off these expensive loans with a new, 0% interest loan.  They can pay off these new loans over five years.  Monthly payments average $300. 

To find qualifying borrowers, HFLS receives referrals from the coaching teams at four leading financial counseling organizations: Neighborhood Trust Financial Partners, New York Legal Assistance Group, Bedford-Stuyvesant Restoration, and the Community Service Society.  In this way, the loan and the financial coaching add up to more than the sum of their parts.  The program improves borrowers’ chances of success and their ability to work out money saving arrangements with their creditors.

Case in point, one program participant who gave her name as Amanda. “As a twenty-year-old living in New York City, I found myself drowning in student debt and credit card bills that only grew worse over time as the interest compounded,” says Amanda.  “Before learning about HFLS, I had been considering filing for bankruptcy. Thanks to this $20,000 interest-free loan from the Hebrew Free Loan Society, I was finally able to manage my debt and gain the financial stability needed to stay in nursing school and save for my future.” 

The revolving nature of this grant was another compelling aspect for the donors.  When borrowers pay off their Fresh Start loans, funds are recycled immediately into new loans, multiplying the impact of the original gift for decades. Mr. Lachman and Ms. Messinger intend to contribute additional funds from their DAF account over the next several years, with the goal of increasing her commitment to $3.5 million.  According to David Rosenn, President and CEO of HFLS, this level of commitment would enable the program to originate $2 million in new loans each year indefinitely, assuming continued strong repayment performance.

“Performance on the loans is excellent, and we have had no defaults in the program,” says Rosenn.

“The Hebrew Free Loan Society represents a Jewish community that serves all in need,” says Ms. Messinger. “David is a longtime friend and colleague, who has brought creativity to the organization.”  Mr. Lachman added, “We’re always looking for targeted ways that our philanthropy can help New Yorkers in need. Helping people escape the credit card debt trap seems like something very specific that we could do.”

Another borrower, Mukarramhon, faced significant financial challenges when she needed to cover her mother’s medical expenses and her daughter’s college tuition. “As an immigrant originally from Uzbekistan and a financial counselor,” she said, “I am grateful to have benefited from this program and am always on the lookout for clients who need similar help. The support from HFLS not only helped me clear my debt but also provided peace of mind and allowed me to focus on my future. I’m now saving money, working on closing out my credit cards, and even starting a new business in tourism—a project I’m passionate about.”

Like so many nonprofit organizations, HERE Arts Center encountered a cash crunch this year, and also like so many nonprofits, its borrowing options were limited.  The organization had assets, including a recently renovated building serving as its theater, community space, and headquarters, but the building was already mortgaged by a bank.  They needed a lender that approached the relationship with mutual trust, support, and collaboration, rather than simply credit risk and collateral.

They found just that kind of lender with FJC and HERE Arts Center Board Chair Jennifer Suh Whitfield. She and her husband Benjamin quickly opened a Donor Advised Fund (DAF) account at FJC and contributed appreciated stock that, when liquidated, capitalized a $200,000 loan to the organization.  FJC closed in the loan within two days of opening the account.

“Through our DAF account, FJC provided a loan to HERE quickly, and at a lower interest rate than what was otherwise available from FJC or other lenders,” explains Ms. Whitfield. “We have long been supporters of this organization, and this is just another tool we can use to help the organization smooth out its business operations.”

Founded in 1993, HERE was envisioned as a welcoming, safe environment that could attract and launch a variety of artists. Since its inception, HERE has been home to such acclaimed artists and works as Eve Ensler’s The Vagina Monologues, Taylor Mac’s The Lily’s Revenge, and Basil Twist’s Symphonie Fantastique. HERE has produced and presented over 1,200 original works, served over 15,000 artists, and welcomed over one million audience members. HERE’s work and artists have received 16 OBIE Awards, 2 Pulitzer Prizes, 6 Drama Desk nominations, 2 MacArthur “Genius Grant” Fellowships and most recently, 7 Tony nominations.

“We are thrilled to receive this support from Jennifer, Benjamin, and FJC,” the co-directors of HERE Arts Center—Annalisa Dias, Jesse Cameron Alick, Lanxing Fu, and Lauren Miller—said in a statement. “The loan came at a crucial time of transition for HERE, and has been a key part of setting our new leadership team up for success as we steward this season of extraordinary art and build towards a thriving future for the organization.”

On October 14, FJC account holder Jeff Bekos road his bicycle to the Philadelphia chapter of the Ronald McDonald House, capping a 4,000 mile bike ride that generated philanthropic support along the way for local chapters of the Ronald McDonald House Charities (RMHC).  The effort raised over $600,000 in sponsorships and individual donations, including a portion that was processed through an FJC collective giving account.

Jeff’s relationship with RMHC began in 2013, when his daughter Hailey was being treated at the Children’s Hospital of Philadelphia for Anti-NMDA encephalitis, a rare disease that affects 1 in 1.5 million people worldwide. Jeff’s family spent 254 nights at the Philadelphia chapter, in keeping with the organization’s mission to provide a haven for families with children in the hospital. 

“They provide all of the comforts of home,” said Jeff. “It becomes your home away from home and so anything and everything that you need, they’re there to help and support you in any way that they can.”

To demonstrate his gratitude and ensure that other families receive the same support as he did, Jeff planned this cross-country bike ride, which he called One Dad’s Mission, during which he visited 26 local RMHC chapters across the country, raising money along the way. Jeff’s daughter Hailey, now 24 and fully recovered from her illness, joined her father for the kick-off and welcomed her dad in Philadelphia at the end of the ride as well.

“The kindness that we saw across the country was amazing,” Jeff said.

See local Philadelphia press coverage of Jeff’s ride at WABC and WCBS.

Brick Underground, an independent digital media publication covering New York City real estate, featured an article about a philanthropic donation from an FJC donor to the Center for New York City Neighborhoods. 

The article, Housing Nonprofit Secures $1 Million to Extend Foreclosure Prevention Program, describes the impact of a $1 million grant, made anonymously, which will fund 0% interest loans to low-income homeowners pay off arrears and avoid foreclosure.

CNYCN provides loans of up to $50,000 to pay off an owner’s arrears, which is repaid when they sell the property, refinance, or die, said Scott Kohanowski, general counsel for CNYCN. The program, which is only open to New Yorkers over the age of 62 or those with disabilities, has helped 128 households through $3.5 million in loans to date, Kohanowski added.

“The idea is to prevent the loss of a home when homeowners have no other source of potential funds,” Kohanowski said. “It’s money that we’re able to recapture and recycle when the need is no longer there, and we pass that same source of funding onto the next person in need.”

Read the full article here.

Read more about how this grant came about on FJC’s web site.

We often hear about philanthropy piloting new programs that are replicated by government, but the reverse can also happen. Sometimes philanthropy can breathe new life into existing tried-and-true programs that have promising results, complementing work initiated by the public sector.

Take the Equitable Retention Mortgage Assistance Program (ERMA), a foreclosure assistance program run by the Center for NYC Neighborhoods (CNYCN), the go-to citywide nonprofit focused on affordable homeownership. The program just received a $1 million infusion of revolving philanthropic capital from an anonymous donor, held at an account at FJC. The philanthropic investment extends the life of this impactful program, which helps seniors save their homes from foreclosure. The program launched in 2020, in response to data analysis provided by the  New York State Office of the Attorney General (OAG) that identified a rapid increase in reverse mortgage foreclosures, putting senior New Yorkers at risk of homelessness.  Initial funding was provided by Enterprise Community Partners with additional recycled settlement funds made available by the NYS OAG.

The goal of ERMA is to help low- and moderate-income seniors and people with disabilities avoid foreclosure due to mortgage and condo/coop arrears or a temporary inability to pay property taxes, property insurance, water/utility bills, or other charges. The program provides 0% interest subordinated liens up to $50,000, the payments of which are deferred. In other words, homeowners are not required to make monthly mortgage payments; instead, the loan is only repaid when a property is sold or refinanced or the 30-year term expires.

Since 2020, ERMA has successfully prevented 126 distressed homeowners from facing foreclosure or other home loss. However, in 2023, despite very strong demand for the program, CNYCN had to cease accepting new applications for ERMA once initial funds for the program were depleted. This left over a hundred applicants on a waitlist.

An anonymous donor learned about ERMA and found the program appealing and impactful, due to its strong track record.  The donor’s $1 million in loan capital could be leveraged with additional resources provided by CNYCN, such as free housing counseling and legal services. What’s more, the revolving nature of the funding meant that a single commitment of $1 million could be recycled multiple times.  As homeowners eventually sell or refinance their homes, the subordinated loans would be repaid, allowing the same dollars to be redeployed to other distressed homeowners.  The donor worked with CNYCN to deposit grant funds in a fiduciary account at FJC, which governs the use and revolving nature of the philanthropic loan capital. “This much needed additional investment in ERMA brings additional capacity to a program designed to stabilize the housing and finances of our most vulnerable neighbors,” says Christie Peale, CEO and Executive Director of the Center for NYC Neighborhoods. “This critical funding, combined with the Homeowner Protection Program services provided by our partners across the state, will help seniors and people with disabilities stay in their homes and remain connected to community networks and resources.”

We invite you to read this blog post by FJC CEO Sam Marks about the existential threats facing nonprofits as a result of delayed government payments – and the role philanthropy can play in helping nonprofits manage through these challenges. The blog post was published in Alliance’s online magazine, and is excerpted here.

Imagine being charged with critical life-changing responsibilities while being starved by the same public actors to whom you are accountable. This is the crazy-making situation nonprofits are finding themselves in, whether they are housing the unhoused, providing safe spaces for women fleeing intimate partner violence, or providing childcare, many of society’s most critical services rely on timely, predictable funding from government agencies. The problem is that payments for contracted services have become anything but reliable for too many organisations.

For too long, nonprofits’ business needs have been woefully misunderstood and undervalued, and the bill is now coming due.

Not-for-profit operations face the same financial challenges as their for-profit counterparts — managing cash flow, planning payroll, and navigating financing relationships. However, the segment of the nonprofit sector that carries out necessary services funded by the public sector faces unique challenges.

Public contracts come with immense upfront costs of delivering services, and oft-delayed payments are gumming up the underlying financial machinery for many service providers. As my friend John MacIntosh wrote in City & State last year, ‘Nonprofit vendors regularly complain that the procurement system is complex, antiquated and creates lengthy payment delays that are costly, sometimes even fatal, to organizations waiting for their money.’

The fundamental problem for nonprofits is that without reliable access to capital and credit, something as basic as delayed contract payments can pose an existential risk. To be clear, committed officials at every level of government are delivering important reforms to the public contracting process. Bureaucratic reform, however, is slow. In the meantime, foundations, which provide grants and help nonprofits build capacity in myriad ways, can and must develop creative new ways to support nonprofits and rally the support of committed philanthropists.

Increasingly imaginative philanthropists and foundations are developing creative solutions to help nonprofits navigate unreliable cash flow, providing a model for others to follow.

Please read the full blog post at Alliance Magazine, which includes examples of recent solutions FJC has executed, including a bridge loan to Brooklyn Defender Services, and low-interest revolving loans for Brighter Tomorrows and an LGBTQ youth-serving organization.

FJC Donor Sandra Hughes Waddell wrote this guest essay for our blog, describing how Donor Advised Fund accounts are helping her family sustain the legacy of their ancestor Charles Evans Hughes. The piece is a part of our “Why I Give…and How” blog series.

Every family has traditions and values passed down from generation to generation. For our family, it’s a passion for racial and social justice. We grew up hearing stories about my grandmother Catherine Hughes Waddell, a relentless advocate for racial equality who left her mark through her work at organizations such as the NAACP Legal Defense and Educational Fund and the United Negro College Fund. My grandfather Chauncey Waddell shared Catherine’s passion for this work, and together they created an enduring and impactful legacy of philanthropy.

The Charles Evans Hughes Memorial Foundation was founded by my grandparents and named in honor of Catherine’s father (our great-grandfather), a former Chief Justice of the United States Supreme Court, U.S. Secretary of State, Governor of the State of New York and a steadfast advocate for equal justice under law. For over 60 years, the Hughes Foundation was at the heart of our family’s philanthropic endeavors, with programs focusing on legal and human rights; environment, population and health; education; and arts and culture. It was a cherished and impactful institution that helped to guide my own personal journey as a philanthropist.

I vividly remember, as a young child, my parents started me on a small allowance, of which I was to set aside 10% for charity. At the end of the year, my parents would match what I’d saved, and I was to write to my selected organizations, explaining why I had chosen them. Those first gifts were to the organizations where my grandmother Catherine had worked. It was a wonderful way to set me on the path toward my own philanthropy. More than that, I have been forever grateful to have been raised in a family for whom racial justice is a deeply abiding value.

As I grew older, I began to understand that philanthropy wasn’t just about donating money, but also about doing the work to understand the complexities of the issues you’re trying to address. Experience has taught me that effective philanthropy calls for actively listening to and learning from those in the organizations and communities you seek to serve, building relationships and fostering partnerships, and providing funding that best propels change, builds the capacity and resources of your grantees and creates sustainable impact.

In essence, for me, philanthropy is not a financial exercise, it’s an intellectual, emotional and deeply-rooted personal commitment. Building on my grandmother’s vision, and serving on the Foundation she and my grandfather created, has been both a privilege and a responsibility. Yet, in recent years, the private foundation landscape has shifted. The administrative and compliance demands are complex and resource-consuming, putting small family foundations like ours in a challenging position. These obligations can threaten to overshadow the charitable mission that should be the driving force of any philanthropic venture. What’s more, as our family’s involvement in the Hughes Foundation evolved over the generations, it became clear that the governance structure of a family foundation was becoming unwieldy, and our philanthropy could benefit from added flexibility.

This is where Donor Advised Funds (DAFs) come into play. DAFs have been rising in popularity. As a philanthropist familiar with the workload of running a foundation, I’m not surprised. DAFs offer a valuable alternative, empowering philanthropists to shed administrative burdens while continuing to channel their energy and resources toward causes that matter. By moving to individual DAF accounts, we realized we would be able to devote our attention to identifying and building relationships with grantees making the most impact. We believe that is the heart and soul of philanthropy, and, what’s more, true to the vision of our family.

After much thoughtful consideration, the four remaining trustees decided to dissolve the Foundation and continue our cherished philanthropic mission through new DAF accounts with FJC, a boutique sponsor. It had been weighty and even emotional for some of us, thinking about winding down the good work of a distinguished 60-year family Foundation, but being introduced to FJC really brightened our sense of what the next phase of giving could look like. We found that, unlike larger institutions, boutique organizations like FJC offer flexibility, accommodating unique agreements, handling unusual assets and developing bespoke charitable programs. In our case, we found that even as we moved philanthropic assets from the Foundation to our DAF accounts, we could maintain our investment advisory relationship with the Foundation’s long-time funds manager. Our partnership with FJC has allowed us not only to preserve the legacy of the Hughes Foundation but also to reanimate that legacy, enabling us to further invest in the causes and institutions that matter deeply to us. Finding the right partner is, in itself, transformative. We’re grateful to work with a team that understands the philosophy of our giving.

This transition feels like a new chapter in our family’s philanthropic journey – an evolution rather than an ending. Our new approach offers a vibrant, exciting future where we continue to honor the spirit of our forebears, focused on our impact and not on overhead. This is not just about preserving a philanthropic legacy but about propelling it forward. Freed from the confines of private foundation governance, our family members now have additional flexibility to further the mission of the Hughes Foundation, each in our own way. The Hughes Foundation may have evolved, but its spirit, mission and commitment to social justice will continue to guide the path forward.

Reflecting on the journey that brought us here, I am reminded of the young girl who first learned the joy and importance of giving and who, all these decades later, remains steeped in gratitude – to her forebears, for their wisdom and vision in creating an enduring and impactful legacy of philanthropy, and even more so, to the many charitable organizations and projects that inspire us and whose important missions and work we are honored to support.

Special thanks from FJC to Lauren Katzowitz Shenfield, Principal of Philanthropy Advisors, for providing the strategic guidance to the Trustees of the former Charles Evans Hughes Memorial Foundation that led to this exciting, new partnership.

We are pleased to report that FJC donors Amy and Richard Wallman have been recognized on the “Philanthropy 50” list, a comprehensive report on America’s most-generous donors compiled by Chronicle of Philanthropy. 

The recognition follows the couple’s donation of $75 million in 2023 to the University of Chicago, a gift that will launch a fundraising challenge aimed at creating 30 new endowed professorships across the university.  The donors made a 2017 gift of the same size to University of Chicago’s Booth School of Business. 

Richard and Amy met at University of Chicago’s Booth School of Business in the 1970s when they were earning their Masters in Business Administration degrees, and both went on to distinguished careers. After earning her MBA from Chicago Booth, Amy Wallman began her career at EY and retired as an audit partner in 2001.  Richard Wallman began his career with the Ford Motor Company and served as the Senior Vice President and Chief Financial Officer of Honeywell International, Inc.  He also served in senior financial positions with IBM and Chrysler Corporation, and he currently serves on a number of corporate boards.

Now in retirement, the Wallmans view philanthropy as a critical focus for this next phase of their lives.  “Our goal is to give away as much as we can,” said Richard. “We give away everything we make, and we will give away everything we have.”

The Wallmans’ Donor Advised Fund account with FJC is one component of a larger philanthropic strategy, for which they use a variety of tools.  The relationship with FJC began in 2022 when they sought to make a philanthropic donation of shares in Quala, a leading tank cleaning and maintenance company.  Although the company anticipated a major liquidity event through a corporate merger in the coming year, the Wallmans found it difficult to find a sponsor of DAFs willing to perform the level of due diligence necessary for the contribution of shares that would be illiquid at the time of donation.  Within a week, FJC was able to perform the analysis and receive approval from its Board of Directors, facilitating the donation against a year-end deadline.

“Our ability to gift Quala shares allowed us to increase our charitable giving,” said Richard. “We see opportunities to donate shares in a number of other companies over the next few years, and we look forward to working with FJC again. We love being a part of the FJC family.  They are very client-focused, particularly when it comes to these more complicated gifts and investments.”

Spectrum News NY1 interviewed two charismatic veteran entrepreneurs over the weekend who were recipients of the NYC Boss Up award program.  The entrepreneurs, two of nine who received awards of $20,000 from Boss Up, were Serghio Adams of Brothers Building Blocks and Ron Holloway from Woofbowl.

The program was administered by FJC through a Scholarship & Award Account with funding by the Ron and Kerry Moelis Foundation.  The program was a public-private partnership, organized with the NYC Department of Veterans Services (DVS) and the NYC Department of Small Business Services (SBS).  

Serghio Adams spoke of the impact of the program in his business, Brothers Building Blocks, which works with middle and high schools to prepare underrepresented students for careers in STEM fields.  “As a small business,” said Adams, “it’s very important to ensure we are creating a larger footprint in the community.  These are monies that we can inject into our companies to take our companies farther.”

Mr. Holloway agreed.  “To be able to have this access to capital is invaluable,” he said.  “When you’re an entrepreneur you make every dollar count, so this money will go a very long way.”  Holloway’s business, Woolfbowl sells healthy fresh food for “dog foodies” with a goal to “make pet food fun and exciting.”

View a clip of the interview here.