This summer FJC made a $65,000 low-interest loan to the Brooklyn-based Greene Hill Food Cooperative with philanthropic funds raised by the Park Slope Food Coop (PSFC) and its members.  The loan is the latest from the Fund for New Food Coops, an initiative launched by PSFC in 2016 in partnership with FJC, with the goal of bringing healthy food at low prices to residents across Brooklyn and beyond.

With over 17,000 members throughout the New York City region, all of whom are required to work shifts every six weeks, PSFC is the biggest member labor food cooperative in the world.  In 2012, PSFC’s membership voted to create a revolving loan fund to support the establishment of new member labor coops and help them pay for the critical items that enable them to grow and to generate income.  The loan fund was funded in part by contributions from the coop itself and matched by charitable contributions from its members.

FJC established a Collective Giving Account (CGA) to receive the charitable dollars and has provided PSFC technical assistance to administer the loan fund: developing loan documentation for borrowers, disbursing loan funds, and servicing the interest payments from borrowers.  Because loans are sourced with philanthropic dollars raised specifically for this purpose, FJC is able to lend on concessionary, below market terms as guided by PSFC (unsecured, and at an interest rate as low as 2% fixed). 

“This loan fund represents one way we can support the cooperative movement,” explains Joe Holz, a founder of PSFC and a member of the Loan Committee that established the Fund for New Food Coops.  “New member labor food coops like Greene Hill face many challenges during their start-up phase, and access to affordable loans is one of them.”

Greene Hill is one of the most promising worker-owned and operated food coops in New York City, which started in 2007 and renovated and opened its first store in 2011. This loan, along with an additional loan from New Economy Project, will enable the Coop to replace critical infrastructure including their produce cooler and replace their HVAC (heating and cooling) system, essential capital improvements to grow their cooperative in the years ahead.  

Alliance Magazine, an international publication celebrating the impact of philanthropy globally, featured a story on FJC’s partnership with Tikkun Olam Foundation (TOF) to provide a philanthropic loan to The Ali Forney Center (AFC), a leading provider of services to LBGTQ+ youth experiencing the harms of homelessness.

Through its donor advised funds (DAF) accounts, FJC allows donors—including private foundations—to recommend loans on below-market terms to the nonprofits of their choosing.  In this case, TOF recommended a revolving line of credit to AFC of $1 million, which it capitalized with a grant to a DAF account at FJC.  FJC then managed the loan origination, legal documentation and loan servicing. 

AFC will use the loan as a source of affordable bridge financing to help offset payment delays from government contracts for committed funds and as an emergency reserve for extraordinary programmatic or operational needs.

From the article:

Sam Marks, CEO of FJC – A Foundation of Philanthropic Funds (FJC), added: ‘The timing of payments from government is more uncertain than ever, and philanthropy can play a key role as capital providers to help nonprofits manage through these challenging times.’

Alexander Roque, president and executive director of AFC, added: ‘The strategic reserve fund is crucial for AFC and will offer the opportunity to enhance and expand our capacity.

‘There is so often a lag between funding and disbursement. We can now allocate resources towards initiatives that further our mission, new programs, expanding international efforts, acquiring properties, or improving existing facilities.’

The loan is the first in a series of planned strategic investments from Tikkun Olam Foundation. Each year through 2028, TOF intends to provide similar strategic loan funds up to $500,000 to provide greater stability and planning capability to nonprofits nationwide.

“In our decade-long partnership with the Ali Forney Center, we have seen them grow their work in response to the increasing need to provide safety, care, and empowerment to trans and queer youth,” shared Tikkun Olam Foundation Executive Director Zev Lowe. “We are excited for our longtime partners at AFC and what this loan will mean for the communities they serve, and also about what this collaboration with AFC and FJC can teach us and the sector about innovative ways to deploy philanthropic resources.” 

Read the full article at Alliance Magazine’s web site.

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.”

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.

With a $3.5 million loan from FJC, Life of Hope, a community organization in Central Brooklyn, acquired a property that will be transformed into central hub of its programs serving youth and immigrant families.

“The acquisition of this new building is not just a real estate transaction,” explained Porez Luxama, Founder and Executive Director of Life of Hope.  “It is the beginning of a transformative chapter for our organization and the entire community.”

Life of Hope was founded in 2006 by two brothers who were raised with a strong sense of service for those in need.  In the late nineties they were brought by their mother to the United States and experienced firsthand the challenges faced by their mother as a Haitian immigrant working to establish a new life for her family.  At that time, there were no services available to help her adapt to daily life in the United States. Recognizing the need for immigrant services in NYC, the brothers founded Life of Hope.

Today the organization serves over 65,000 youth and immigrant families with an array of services, while also championing the legacy and contributions of Haitian-Americans ​in the Diaspora.

As one of the few Haitian-serving (and Haitian-led) organizations in New York City, Life of Hope enjoys support from elected officials at federal, state and local levels of government and has secured over $12 million in public funding to build its community center.  FJC’s loan helps the organization solve a timing issue, relative to the flow of funds from public sources and their need to move quickly to acquire the property from the seller, who provided the organization with an aggressive timeline within which to close. FJC was able to move from intake to approval to closing and funding within seven weeks.

The loan was made from FJC’s Agency Loan Fund, a program that allows FJC donors with Donor Advised Fund (DAF) accounts to invest in a pool of nonprofit loans as an impact investment.

“Without a lender with the speed of FJC, Life of Hope could very well have lost the opportunity to develop this site,” said Steven Polivy, Partner at Akerman LLP and pro bono counsel for the project.

The acquisition of the property prompted an outpouring of public statements from the officials that have committed funding to the project, including U.S. Senator Chuck Schumer, NYC Pubic Advocate Jumaane D. Williams, New York City Comptroller Brad Lander, -Brooklyn Borough President Antonio Reynoso, NYC  Council Member Rita Joseph, and NYC Member Mercedes Narcisse.

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 congratulates Queens Community House on the ribbon-cutting ceremony at its Forest Hills Community Center, following a two-year, $16 million renovation.  The project was made possible in part by a $3.9 million loan from FJC, which bridged public capital grants.

The ceremony drew local elected officials and dozens of Forest Hills community residents, including stakeholders whose connection to the community center goes back over its nearly fifty-year history. 

Queens Borough President Donovan Richards said, “We know what this center means to Queens, and I think it’s more important than ever that we have spaces like this in our borough.”  

More than 500 neighbors pass through the center on a typical day, as it transforms itself from a senior center in the morning to an after school site in the afternoon and a Teen Center in the evening.  The center hosts numerous immigration services, free English classes, youth workforce initiatives, services for older adults and much, much more.

Speakers at the event included Queens Borough President Donovan, NYS Assembly Member Andrew Hevesi, NYS Senator Joseph Addabbo, NYC Council Members James Gennaro and Lyn Schulman, and former NYC Council Members Danny Dromm and Karen Koslowitz, and Robert Rodriguez, CEO of DSNY. See NY1 News coverage of the ceremony here.

Earlier in November, FJC’s CEO Sam Marks was a guest on Get Connected with Nina Del Rio, New York City’s 106.7 Lite FM’s weekly talk show featuring NYC’s influencers, experts, and vibrant non-profits.

Del Rio interviewed Marks about his background and the world of Donor Advised Funds, as well as the creative ways that FJC puts philanthropic resources to work. 

He spoke about FJC’s Agency Loan Fund, an impact investment vehicle that allows donors to invest some or all of their accounts in a pool of loans to nonprofits, so that funds are actively supporting nonprofits even before they are disbursed as grants. He cited capital grants and contract receivables as payments FJC’s loans typically bridge. “We do a lot financial intermediation, during these timing gaps for nonprofits,” said Marks.

He also spoke about innovative transactions with nonprofits like The Fortune Society and the Tenement Museum. 

From the interview:

People typically think, my philanthropy is to make grants to help an organization hit their goals to operate in the black for the year. But you could also use philanthropic dollars to help organizations be more entrepreneurial and take on more exciting projects that will help them grow and expand their services.

The nonprofits we work with understand the challenges that their businesses face, whether it’s cash flow issues because of late payments or a dearth of capital to take on new, exciting projects.  The nonprofits really know where their gaps are.  The challenge for us is finding donors with the imagination to put their philanthropic dollars to work to fill those gaps. If we could get more of our donors to think about, while the dollars are with us, how they could be invested for the benefit of nonprofits, we could really help nonprofits worry less about where their next dollars are coming from. We could go to the heart of what makes these nonprofit businesses challenging.

You can listen to the whole interview at this link.

We invite you to read this guest essay by CEO Sam Marks published in Inside Philanthropy.  The article suggests that “this is a time to experiment with deploying philanthropic dollars more strategically to help nonprofits address those issues more effectively and spend more effort on mission-critical work.”

The essay recommends that donors look beyond grantmaking for their philanthropy and consider other approaches to using philanthropic capital.  Examples cited include the revolving predevelopment fund FJC arranged for the Fortune Society, and the refinancing of the Tenement Museum’s mortgage through a DAF investment.

From the essay:

The conversation between philanthropy and nonprofits very often begins and ends with grantmaking, and there is no question that grants are a key component of nonprofit business models. But the nonprofit sector could surely benefit if this conversation were more expansive — on both sides. Nonprofit practitioners could be more explicit with their philanthropic partners about their cash flow challenges that distract senior management from a full focus on their missions, or the capital resources they need to grow and be truly transformative. Donors could consider more inventive and mission-focused uses of the philanthropic dollars that are currently invested in the private sector, whether in foundation endowments or in DAF accounts. These approaches depend on donors and nonprofits engaging more deeply and finding a common cause.

Simply put, there’s an opportunity to grow beyond the conventional relationships between donors and nonprofits by elevating creative, entrepreneurial thinking. Sponsors of DAFs, in particular, can play a role in helping small donors align their funds and execute some of the more inventive uses of their philanthropic dollars, such as loans, recoverable grants or impact investments. DAF sponsors have always offered donors operational scale and efficiency; why not also offer technical and legal assistance to facilitate these more complex transactions? Or to pull together multiple donors that want to work collectively to create a solution?

This vision for DAFs is not just about more effective donations; it’s about building a more robust philanthropic ecosystem where the interests of donors, nonprofits and beneficiaries converge.

Read the full essay here.