Crain’s New York Business has published an op-ed by FJC CEO Sam Marks and JoAnne Page, the president and CEO of The Fortune Society.  The piece, titled “How Creative Funding Can Help Kickstart Complex Capital Projects,” describes a unique partnership between a leading nonprofit serving people coming out of incarceration and a foundation sponsor of donor advised funds (DAFs).

Through the initiative, FJC has arranged a fund that will empower The Fortune Society to scale its housing development work.  See our FAQ document for more information.

From the op-ed:

The Fortune Society, a leading supportive housing provider, and FJC – A Foundation of Philanthropic Funds, recently launched a revolving loan fund that will provide desperately needed working capital to kickstart supportive housing projects.

The fund’s low-interest loans are capitalized by contributions from FJC’s donor-advised fund holders and matched by additional resources from the Fortune Society. The loans will allow the nonprofit Fortune to significantly expand its supportive housing portfolio over the next five years.

Most donors are not thinking about using their philanthropic dollars this way. But imagine the possibilities if philanthropic leaders who think and act in business terms were to partner closely with nonprofits. They could help identify and fill common gaps that nonprofits face. Donors would see a bigger impact from their giving, and entrepreneurial nonprofits could take on more ambitious projects to solve our most challenging problems.

Read the full article here.

PRESS RELEASE – Organization teams up with FJC to create a Donor Advised Fund to support new supportive housing developments in New York City

Finding housing options to support the successful reentry of formerly incarcerated people back into society is no easy task. Homelessness remains a significant challenge for those coming out of prison and jail – especially here in New York City.

That’s why The Fortune Society, a nonprofit organization that empowers homeless, formerly incarcerated individuals and their families to build better futures through supportive and affordable housing, is working together with FJC – A Foundation of Philanthropic Funds (FJC) – to create a fund that will enable The Fortune Society to initiate these complex housing development projects.

The initiative bridges people across a vast array of inequality – some of the most vulnerable New Yorkers and New Yorkers whose wealth allows them to set aside funds specifically for philanthropic purposes – in Donor Advised Fund accounts.

Nonprofit organizations face a significant gap in available financing relative to for-profit companies. While they want to be entrepreneurial, they can’t raise equity in the same way as private companies. The Fortune Society, which wants to develop more supportive housing options for its target population, often faces challenges moving quickly to initiate these kinds of projects. To have a competitive chance, the organization must pull cash from its operating budget to cover pre-development expenses. At the same time, wealthy individuals have significant resources invested in stocks and bonds, hedge funds, and philanthropic assets.  

“This opportunity creates a solution to meet an urgent social need,” said JoAnne Page, CEO of The Fortune Society. “We currently do not have a source of ready money that can be put down up front for housing development. This collaboration would be a lasting solution to this problem.”

FJC, a sponsor of Donor Advised Funds, is providing a structure where multiple individuals who support The Fortune Society’s mission can pool their philanthropic dollars together to help the organization cover the pre-development costs to initiate these capital-intensive housing projects.

“The Fortune Society and FJC are collaborating to demonstrate how these individuals can provide the kind of catalytic “equity-like” capital that nonprofits can use to move major real estate development projects forward,” said Sam Marks, CEO of FJC. “This effort will harness large capital commitments from public and private sources to help the organization fulfill its mission.” The revolving nature of the fund is intended to give The Fortune Society the resources it needs throughout the life of the fund to act aggressively in pursuit of mission-critical real estate development opportunities and finance up-front costs. The goal is to recycle these philanthropic dollars multiple times for multiple initiatives, and to leverage the money along with other resources to create a long-term impact.

The DAF sector has grown rapidly in recent years, but also come under criticism for aggregating philanthropic capital without quickly deploying it. This initiative showcases the flexibility of DAFs and the creative ways they can be used to advance an organization’s mission.

“FJC has creatively enabled individual DAF account holders to be meaningful partners in mobilizing resources to create desperately needed affordable housing,” said Gary Hattem, the former Head of Global Social Finance at Deutsche Bank. He joins Theodore Huber and A to Z Impact as some of the first donors of this initiative.

At the end of a five-year term, all the funds will remain charitable by the conversion to flexible DAF accounts, which can be deployed as grants to nonprofits as the donors see fit or remain with The Fortune Society for use as the organization deems necessary for its critical work.

“This kind of revolving fund will allow The Fortune Society to finance up-front costs related to mission-driven affordable housing projects, giving the organization a chance to act quickly and nimbly when opportunities arise,” said Page. The Fortune Society is currently in the pre-development stage as a first venture of this fund through the proposed Just Home initiative, a project to house New Yorkers with complex medical needs after they leave jail on the campus of NYC Health + Hospitals/Jacobi in the Bronx. Donors are excited about the prospect of seeing the fruition of the work live on for generations to come.

For more information on this initiative, please visit our FAQ page.

About The Fortune Society

Founded in 1967, The Fortune Society has advocated on criminal justice issues for over five decades and is nationally recognized for developing model programs that help people with criminal justice histories to be assets to their communities. The Fortune Society offers a holistic and integrated “one-stop-shopping” model of service provision. Among the services offered are discharge planning, licensed outpatient substance abuse and mental health treatment, alternatives to incarceration, HIV/AIDS services, career development and job retention, education, family services, drop-in services, and supportive housing as well as lifetime access to aftercare.  For more information, visit www.fortunesociety.org.

About FJC

FJC is a boutique public charity that offers a diverse menu of philanthropic services to a range of stakeholders. With over $380 million under management, its over 1,000 accounts include Donor Advised Funds (DAFs), fiscal sponsorships, collective giving accounts, revolving funds, and many other philanthropic vehicles. FJC acts as an intermediary between the financial services sector and the nonprofit sector, enabling nonprofit organizations and their supporters to focus on their missions, rather than be burdened with the details of operations and compliance.

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Reflecting on best practices by FJC and its imaginative donors, FJC Chief Executive Officer Sam Marks wrote “Donor Advised Funds and Impact Investing: A Practitioner’s View”, which was accepted for publication by The Foundation Review in their December, 2022 issue focusing on impact investing.  The journal is the first peer-reviewed journal of philanthropy, written by and for foundation staff and boards. 

The article provides a brief overview of FJC’s origin story and the establishment of its Agency Loan Fund as a bespoke impact investing vehicle, which allows participating donors to invest in a pool of loans to nonprofit borrowers that help them bridge cash flow and achieve their missions.

Marks also highlights some of the innovative transactions FJC has executed with its donors, including a 0% interest revolving line of credit for Brighter Tomorrows, the refinancing of the Tenement Museum’s mortgage, accounts that allow foundations to participate in crowd-sourced small business loans, and the recently closed revolving fund for the Fortune Society.    

“In the end,” Marks writes, “the potential for DAF sponsors to accelerate impact investments may also come from their ability to aggregate not just dollars but inspiration.”

Read the full article here.

Safe, Affordable Housing with Services is Focus of FJC’s First-Ever Multi-Donor Revolving Fund

What are the goals of FJC’s Revolving Fund for The Fortune Society?

FJC, a boutique sponsor of Donor Advised Funds, has arranged a fund that will empower The Fortune Society, a nonprofit serving vulnerable New Yorkers coming out of incarceration, to scale its housing development work. People re-entering society from prison are overrepresented in the homeless population, and supportive housing (affordable housing with services) has proven to be an effective strategy to keep vulnerable New Yorkers stable and out of crisis systems (like homeless shelters, hospitals, and jails). The initiative will help The Fortune Society double its housing portfolio over the next five years.

Specifically, the fund will:

• Support people coming out of prison with stable, permanent supportive housing and services;
• Provide The Fortune Society with the capital necessary to invests in its future and organizational growth by doubling its real estate portfolio over the next five years; and
• Allow FJC to demonstrate how Donor Advised Fund (DAF) accounts can be put to work for maximum impact, thereby helping them be more creative with their resources and support a greater number of people in need.

How are funds in the Fortune Society Revolving Fund different from other Donor Advised Fund accounts at FJC?

The Revolving Fund has been funded with philanthropic capital with a specific intention to help The Fortune Society act entrepreneurially to expand and scale its mission.  The goal is to use the same dollars multiple times to initiate multiple projects, preserving the capital for donors to recycle again for philanthropic purposes.

A typical Donor Advised Fund (DAF) account at FJC provides recommender privileges to donors regarding how the philanthropic dollars in their accounts are invested for growth or deployed as grants. With the Revolving Fund, donors have agreed to “lock up” their funds for five years, to allow The Fortune Society to use them to advance their mission to expand their portfolio of permanent supportive housing for people coming out of incarceration.  This agreement is documented in a simple Memorandum of Understanding between the donors and FJC. 

The participating donors have agreed to allow The Fortune Society to draw on these funds as needed, as loans at 1% interest, instead of the typical ways funds in DAF accounts are used (i.e. granting funds out, or investing them for tax-free growth to make grants at a future date). At the end of the five-year term, The Fortune Society will repay the loans, and funds will return to the donors’ individual DAF accounts.  These loans are documented in a loan agreement between FJC as lender and The Fortune Society as borrower.

Who is The Fortune Society?

Founded in 1967, The Fortune Society has advocated on criminal justice issues for over five decades and is nationally recognized for developing model programs that help people with criminal justice histories to be assets to their communities. The Fortune Society offers a holistic and integrated “one-stop-shopping” model of service provision. Among the services offered are discharge planning, licensed outpatient substance abuse and mental health treatment, alternatives to incarceration, HIV/AIDS services, career development and job retention, education, family services, drop-in services, and supportive housing as well as lifetime access to aftercare. 

Developing, owning and operating housing is core to Fortune Society’s work.  Low-threshold access to supportive emergency, transitional, and permanent housing is provided at their congregate facilities, The Fortune Academy (“the Castle”) and Castle Gardens, along with their Scatter-Site Housing program.

What is supportive housing?    

Supportive housing is affordable housing with onsite services that help formerly homeless, disabled tenants live in dignity in the community. Supportive housing came into being in response to the homelessness crisis in New York City in the 1970s and is the most humane and cost-effective solution to ending homelessness for vulnerable people: individuals and families dealing with mental illness, trauma/abuse, addiction, and chronic illness including HIV/AIDS.

Supportive housing is permanent and affordable: All tenants hold leases and pay about a third of their income in rent. The residences are owned and operated by nonprofit organizations and are accountable to their city, state, and federal funders. Because supportive housing either replaces a blighted building or lot, it jump-starts neighborhood renewal. Because it provides 24-7 front desk coverage and other      security features, supportive housing frequently contributes to increased community safety. As a result, studies have shown that supportive housing increases property values. For more about the cost effectiveness and impact of supportive housing, see these great resources at The Supportive Housing Network.

Depending on the site and service contracts, supportive housing is made available to vulnerable populations who are disproportionately represented in the homeless shelter system: such as people who face substance abuse, HIV/AIDS, serious persistent mental illness, veterans, and—in the case of The Fortune Society—people re-entering society after incarceration.

Why does The Fortune Society need resources from a Revolving Fund?

Nonprofits face particular business challenges when launching entrepreneurial activity. The ownership and governance structures of nonprofit organizations don’t allow them to raise equity.  As a result, when nonprofits need to fund the earliest and most risky pre-development stage of a real estate venture, they must fund pre-development expenses from rainy day funds, if they exist, or else pull cash from their operating budget.

To scale its work in developing supportive housing, the Revolving Fund will provide The Fortune Society a dedicated source of capital that can be used to initiate these time-intensive, critical projects.

The total development costs of a typical supportive housing development may run into the tens of millions of dollars, depending on size, which is financed through a combination of private financing and federal, state, and city subsidies.  To secure these resources, The Fortune Society incurs significant soft costs during the pre-development phase, which can run in the tens or hundreds of thousands of dollars. These costs include deposits to secure sites for acquisition, feasibility studies, environmental reviews and architectural design work.

How will The Fortune Society repay loans and replenish the Revolving Fund?

Fortune Society will replenish the revolving fund when their affordable housing projects secure construction or permanent financing, or bridge loans from more traditional financing partners.

The federal Low Income Housing Tax Credit (LIHTC) is the principal subsidy for affordable housing development, and the New York City region receives an allocation of LIHTC through its housing finance agencies NYS Housing & Community Renewal (HCR) and the NYC Department of Housing Preservation & Development (HPD).  These resources are supplemented by tax-exempt bond financing, grants from other public and private sources, and traditional bank financing. In addition to these capital sources, nonprofits must secure service contracts from other city and state agencies.

The Fortune Society has a long track record of securing these sources, as well as the necessary public approvals from community boards and other elected officials.

Is there a risk that loans won’t be repaid? 

No investment is risk-free.  FJC mitigates this risk by working with The Fortune Society to fund activities that have a high likelihood of repayment, on real estate projects that have already secured significant public approvals and/or soft commitments of public resources.  The primary motivation of this fund is philanthropic (and at 1% interest, the loans are being made available at below-market interest rates).  Nevertheless, this project will be deemed successful if the loans are repaid and the donors have the opportunity to recycle them for other philanthropic purposes. 

The loans made from The Revolving Fund are general recourse obligations to The Fortune Society, meaning that if the real estate projects in the early planning stages don’t go forward (the primary source of repayment), The Fortune Society is still “on the hook” to repay them (the secondary source of repayment).  The Fortune Society is in a strong financial position, and has never failed to repay any debt obligation on time.

Working on behalf of its donors, FJC will make all efforts to recover the full loan principal in the event that things do not go as planned.  In the remote possibility that a loan recovery becomes impossible, FJC will convert to a grant any portion of the loan deemed to be uncollectible.  

We have worked closely with donors to understand the risks involved in this Revolving Fund.  Our expectation is that every dollar dedicated to this effort will be used multiple times to initiate multiple projects and then returned to donors’ DAF accounts so they can be redeployed as grants. 

What happens at the end of the 5-year term?

At the end of a 5-year term, funds will be returned to the initial donors’ DAF accounts.  The account holders will then have the flexibility to recommend their funds be granted to the nonprofits of their choice.

Where does the initiative stand now?

Four DAF account holders at FJC have joined this effort, including Gary Hattem, Theodore Huber, A to Z Impact, and an anonymous donor. As of this writing (5/15/23), The Fortune Society has drawn $400,000 to cover pre-development expenses on two projects:

• Just Home Project is an innovative housing initiative that will provide permanent, supportive housing with services for medically complex homeless New Yorkers returning after incarceration. Residents of this project suffer from medically complex issues that require constant medical attention. The project is a partnership with the NYC Health + Hospitals Corporation and will be built on City-owned land at the Jacobi Medical Center (Bronx, NY).
• Illegal Hotel Conversion. Redevelopment of “illegal hotel” to supportive and affordable Single Room Occupancy (SRO housing at 258 West 97th Street in the Upper West Side. The completed project will have 59 supportive housing units and 25 affordable units. The project was the subject of a New York Times article “From ‘Illegal’ Hotel to Housing for the Homeless on Upper West Side” (3/28/22).

Funds will be used to cover architectural services, environmental reviews, consultant fees, and staff management costs.  It is anticipated that over the next year, these projects will close on pre-development or construction financing that will enable The Fortune Society to repay the loans and draw on the fund again for other projects in their supportive housing pipeline.

FJC closed a $3.9 million bridge loan to Queens Community House (QCH) to bridge public sector grants to revitalize The Forest Hills Community Center. QCH has modernized the entire facility by overhauling its programming rooms and constructing new meeting rooms. The organization has also overhauled its recreational area, built a new neighbor’s lounge and installed accessibility upgrades including a new elevator and better walkways.  

FJC’s loan will facilitate the buildout of a new annex, which was built by the nonprofit Phipps Houses and, via agreement with the City, sold to QCH for one dollar.  City capital grants are only available to nonprofits on a reimbursement basis, which often requires them to borrow to start work.  “We were looking for a lender with a straightforward process, who understands how public grants work, and could get this done with the collateral we have,” said Executive Director Ben Thomases. 

QCH is a multi-service settlement house committed to serving the diverse neighborhoods of Queens. QCH serves more than 25,000 children, youth, adults, and older adults every year.  The Forest Hills Community Center played a central role in the organization’s origin story. 

Please find below excerpts from QCH Executive Director Ben Thomases’ s recent essay in This is Queensborough, a publication of the Queens Chamber of Commerce, reflecting on the past, present and future of The Forest Hills Community Center.

The Forest Hills Community Center — a site born from a bitter controversy that gripped our borough 50 years ago — has reopened for programming after undergoing a major renovation. The Center was part of a compromise crafted by little-known attorney Mario Cuomo after a widespread uproar arose from plans to build a public housing development in Forest Hills, then a predominantly white, middle class community. The conflict touched on racial tensions and prejudices, but also demands for government accountability and community input in local planning.

Cuomo’s compromise, which also included establishing the development as the first and only coop in New York City Housing Authority’s (NYCHA’s) portfolio, received a mixed response, but the process and the result were ultimately deemed a great success. My organization, Queens Community House (QCH, originally Forest Hills Community House) was founded to run the newly-built community center on the site, with a board comprised of neighbors from both sides of the conflict. When the Center’s doors opened in 1976, it hosted only three small programs, but from the beginning these programs were crucial in bringing together new and longstanding residents of the community and helping a divided community to heal. As our organization grew, so, too, did the Center’s activity. Before the renovation, more than 500 neighbors attended the Center on a typical day, and more than 4500 people passed through its doors each year.

As the neighborhoods around the Center (Forest Hills, Rego Park, Corona, Elmhurst) changed and diversified, the Forest Hills Community Center continued to play an important role in community integration and stability. Children, teens, older adults, new immigrants, and families from different backgrounds and walks of life have come to the Center to improve their lives, to learn a skill or get connected to a resource, to get to know their neighbors, and to make a difference in their community. As we have seen in Forest Hills and in the other 14 neighborhoods in which we now operate, community centers are the keystones to healthy, integrated communities and are fundamental to the work that we do as a settlement house. In addition to providing much-needed services, community centers also serve as modern-day town squares, where people can debate opinions, share ideas, and find fellowship. I believe this has been especially true in Queens, which has been at the forefront of what urban communities of the future will look like.

Since the Forest Hills Community Center was originally owned by NYCHA, it saw few renovations or improvements over the years and much of its infrastructure had become worn down and outdated. Fortunately for us, the need for an upgraded space coincided with a once-in-a-generation opportunity to purchase this site. In 2017, negotiations between NYCHA and the Forest Hills Coop led to the tenants assuming ownership of the property. In turn, the tenants offered QCH the opportunity to purchase the Center in December 2020. Soon afterward, we began the process of reimagining the space to better meet the community’s future needs, and started renovation work in late 2021.

While renovation will be ongoing through spring of this year, the work necessary to reopen for programming was completed in early fall 2022. The new Forest Hills Community Center is brighter and more accessible, with technology-enhanced program rooms, upgraded infrastructure, skylights, gender-neutral bathrooms, an elevator, ADA-compliant doors, and improved walkways. The renovation also freed up space for additional programmatic use, including a Neighbors’ Lounge off the front lobby, small meeting rooms to ensure participants’ privacy, and an expanded food pantry.

The renovation has been supported by a number of public and private sources, including the Queens Borough President, the Council Speaker, Councilmembers Karen Koslowitz and Danny Dromm, the New York State Regional Economic Development Council, and numerous foundations and individual donors. We are grateful for their support and for their acknowledgement of the importance of this site for the communities of central Queens.

The Forest Hills Community Center started out as an experiment, but it has grown into a vital part of the Queens landscape and a demonstration of the good that can come out of conflict, if addressed in the right way. We hope this renovation will enable it to provide another 50 years of service to the borough as it continues to evolve.

The Action Heroes of STREB defy gravity and soar through space; they flip, tumble, leap, and sometimes fly.  The dancers give life to the work of Elizabeth Streb, a choreographer, and MacArthur “Genius” who has broken the boundaries of traditional dance for over 40 years, fusing dance, sports, gymnastics, and the American circus. With its customized equipment and culture of constant invention, the art of STREB can’t happen without an organization undergirding it, a nonprofit business that faces the same challenges of any business: marketing, earning revenues and managing expenses, planning for future growth, and launching new projects.

FJC recently closed a $250,000 bridge loan to STREB, which required a sensitivity to the particular business challenges facing this unique nonprofit.  While more traditional lenders might have secured real estate or hard assets as collateral, FJC looked to government contract receivables and contracts on future commissions.  As with other loans from FJC’s Agency Loan Fund, the source of capital for this loan comes from pooled Donor Advised Fund accounts that have been allocated to a nonprofit loan fund as an impact investing vehicle.

FJC’s loan will, in part, bridge proceeds from a commission that will return STREB to Australia for the first time in 24 years.  STREB’s outdoor festival performances in Australia will feature large pieces of equipment: a gleaming aluminum 21-foot turning ladder, a human-sized hamster wheel, a machine that revolves dancers like blades of a windmill, and an Olympic-sized trampoline. Mounting performances with so many (literal) moving parts is hugely cost-intensive, and a bridge loan from FJC fills the gap between when the work happens and when the organization gets paid.

STREB serves diverse audiences through performances and educational programs that provide access to, and participation in, “Extreme Action,” Streb’s signature movement style that thrills audiences with choreographed feats of physicality.  In a typical year, nearly 10,000 people come to SLAM, including 5,000 audience members at nearly 40 shows; 800 students at over 60 weekly classes; 3,000 school children and community organization constituents; 200 artists who rent SLAM to create and present work, teach and take a class; and 850 children, tweens and teens who attend ACTION CLUBS and summer camp.

“We are grateful to have a longstanding relationship with FJC,” says STREB founder Elizabeth Streb. “We are an organization that prizes speed, agility, and nimbleness, and we appreciate it all the more when we can find these qualities in our financial partners.”

This summer, FJC closed a $50,000 loan to the nonprofit The In[Heir]itance Project, to assist the theater organization’s growth while it waited for committed foundation grants to be paid. The loan represented a satisfying “second act” in the relationship between FJC and the nonprofit, which had previously been incubated at FJC as a fiscally sponsored project.

“It’s always great when one of the programs that ‘graduates’ from FJC’s fiscal sponsorship can become one of our borrowers,” says Laura Hoffman, Program Manager of FJC’s Fiscal Sponsorship Program. 

The In[HEIR]itance Project works with intergenerational, intersectional, and interfaith communities to build relationships across divides through collaborative theater projects inspired by shared cultural touchstones. They are currently beginning work in Memphis on the fifth play in a series exploring Exodus narratives across the United States. Previous stops in the playmaking series included projects in Harlem, NYC working with formerly incarcerated New Yorkers, Omaha working with recently resettled refugees, Cincinnati working with the Black and Jewish communities to explore the rituals of Exodus (resulting in a Juneteenth Seder ritual performance), and in Coastal Virginia exploring displacement and white flight.

Hoffman recalls that Co-Founding Artist and Executive Director Jon Adam Ross joined FJC’s fiscal sponsorship program in 2015.  The initial proposal projected a three-year initial project of modest ambition. (The original budget was $50,000 per year).  During its period as a fiscally sponsored project, FJC acted as the 501(c)(3), receiving charitable contributions on the organization’s behalf and acting as a fiscal back office. 

Over time the organization grew into a national arts organization of artists, scholars and activists that could bring people together to listen, learn and collaborate to create theater. Since beginning operation in January of 2015, In[HEIR]itance Project artists have led projects in over a dozen cities around the country, engaging over 10,000 community participants, paying over 170 local artists, and partnering with more than 400 partnering organizations, institutions, and schools. The In[HEIR]itance Project received its 501(c)(3) status in 2020, and it has been operating independently since.

The loan came at a critical time for the organization. In the summer of 2020, the pandemic, along with the national awakening that occurred in response to the murder of George Floyd, created a surge in demand from community partners for collaborations with the In[Heir]itance Project.  The organization has a 27-city waiting list of project inquiries, and they have had to scale up quickly while maintaining the high quality of their collaborations and productions.  With philanthropic commitments in hand but payments expected later in the year, the organization was in need of some working capital to bridge the timing gap. FJC made the bridge loan from its Agency Loan Fund, an impact investment vehicle that pools together funds from donor accounts and makes loans to nonprofits.

“Our organization wouldn’t exist today without the mentorship, guidance, and incubation time we received from FJC when it served as our fiscal sponsor,” says Ross. “Having that relationship endure after we left the nest is not only reassuring, it’s an exciting next step in our maturation as an organization. And we are so grateful.”

Months after India Home re-opened its elder care centers after a brief closure due to the Covid-19 pandemic, Dr. Vasundhara Kalasapudi still fondly remembers reuniting with the center’s residents.

“When the seniors saw me, they came up to me and started speaking to me in their mother tongues,” recalls Dr. Kalasapudi, co-founder of India Home, which serves the South Asian and Indo-Caribbean immigrant community. “I don’t speak every language at India Home. But the staff who did speak the same language translated every word. They said that the seniors told me they are so happy that we are having our centers re-opened and they feel like India Home is a home away from home for them.”

The organization began when Dr. Kalasapudi struggled to find culturally sensitive care for her father. Undeterred, she started India Home in 2008 as a first step in creating elder care that was culturally competent, community oriented, and that piloted innovative solutions to combat alienation, loneliness and depression in the senior community.

While India Home flourished and became a home away from home for its residents, the organization was itself without a home until 2018. Despite receiving a substantial government grant from New York City, India Home still did not have the means to purchase property for use as an office or program space. That is, until India Home got in touch with FJC.

“The experience of taking the loan from FJC was extremely pleasant and easy,” Dr. Kalasapudi recounts. “With FJC’s loan, for the first time India Home has a home, a central place to coordinate with all of our centers.”

Recently, FJC has collaborated with India Home again to finance the organization’s bold initiative to experiment in New York City with creating co-living spaces for isolated seniors to live together like friends or family. Again, FJC was able to provide an acquisition loan that was responsive to the organization’s needs. 

“When we asked for the loan for this initiative, we thought that we would make a twenty percent down payment and FJC would maybe give an eighty percent loan,” says Dr. Kalasapudi. “We were so pleasantly surprised when we received a ninety five percent loan to close the property.”

 With financing in place for this new co-living experiment, Dr. Kalasapudi has time to enjoy interacting with the senior residents across India Home’s various centers, something that is particularly meaningful to her. “Everyone will have two parents. But at India Home I feel like I have hundreds of parents blessing me all of the time.”

Special thanks to Rachel Goldman, FJC’s Program Assistant, for authoring this post.

FJC has applied its customizable operational platform to a new use case: facilitating foundation microloans to underserved small businesses that are taking advantage of a crowd-sourced lending program. This Loan Participation Fund vehicle was designed by FJC in partnership with Upstart Co-Lab, a non-profit that is disrupting how creativity is funded, and Honeycomb Credit, a first-of-its kind loan crowdfunding platform.

[Update: This initiative has been featured in Forbes: “Novel Approach Helps Foundations Make Crowdfunding Loans To Creative Economy Businesses” (May 31, 2022)]

Through the Loan Participation Fund, three foundations — the Jessie Ball duPont Fund, the A.L. Mailman Foundation, and Souls Grown Deep Foundation and Community Partnership — will invest $600,000 with Honeycomb Credit. The capital will be used to provide loans to small businesses in across the U.S. that have been underserved by traditional financial institutions. The foundations will participate alongside “the crowd”—small, local investors including family, friends, customers and other stakeholders.

The three investments have specific areas of focus. The capital from Souls Grown Deep and the A.L. Mailman Family Foundation will be invested in Black-owned businesses in nine southern states. The investment from the Jessie Ball duPont Fund will be directed toward entrepreneurs in seven Northeast Florida counties, prioritizing borrowers who are low-income, women or people of color.

As of 2022, the average loan size on the Honeycomb Credit platform is $70,000. About half of the businesses on the platform were previously unable to access credit or were referred by a lender who declined to provide them a loan. To date, 46 percent of businesses financed through Honeycomb Credit have been in low-to-moderate income communities, 49 percent were woman-owned, and 24 percent were BIPOC-owned.

In the early stages of this initiative, all of the foundations had expressed concern about operational challenges about participating. The foundations agreed that providing loan capital to underserved small businesses fit their missions, but none of the foundations were set up to efficiently disburse loan capital in small $5,000 to $10,000 increments (as well as receive loan repayments). Upstart Co-Lab and Honeycomb Credit invited FJC to arrange Loan Participation Funds, a customized solution that provides efficient financial intermediation for any foundations participating in the initiative.

“We were thrilled to work with Honeycomb Credit to create fiduciary accounts that could make it easy for foundations to implement Loan Participation Funds,” said Sam Marks, CEO of FJC.  “Our scaled operational platform has so many potential applications, and it’s great to work with a partner that can put our capabilities to work at the intersection of philanthropy, small business lending, and impact investing.”

“Large foundations tend to design their infrastructure around deploying capital in hundreds of thousands, even millions of dollars at a time — which is much more than any one small business needs,” said George Cook, CEO and co-founder of Honeycomb Credit. “The Loan Participation Fund bridges that gap, allowing foundations to write large checks but allocate the money to small businesses with the help of an intermediary. This way, big foundations can invest alongside the crowd at the scale that makes sense for helping local entrepreneurs grow their businesses.” 

Since 2017, Honeycomb Credit has channeled $11.3 million through more than 180 loan campaigns to businesses in 23 states and Washington, D.C. 80 percent of the businesses that have raised capital through the Honeycomb Credit platform are creative economy businesses such as local cafés, breweries, and fashion brands that create jobs and contribute to vibrant economic activity in their communities. After raising capital via a Honeycomb Credit campaign, businesses experienced an average 60 percent increase in revenue — in part thanks to the engagement that a Honeycomb campaign encourages by galvanizing local investors around businesses in their areas.

Small businesses with crowd-funding campaigns eligible for loan disbursements through the Loan Participation Funds include:

• Dope Pieces Puzzle
• Kaye Bakes
• 2LC Bakery  
• V Soul
• Ebony & Ivory Brewing  

“We know how difficult it is for low-wealth entrepreneurs, especially those in under-invested communities, to access affordable loans – capital that allows them to grow and create sustainable wealth that raises up the entire community,” said Mari Kuraishi, President of the Jessie Ball duPont Fund. “We are excited about promoting innovative online lending technology locally to unlock equitable and affordable capital for Northeast Florida businesspeople who are currently only able to access high-interest lenders.”

“Since 2019, Souls Grown Deep has committed 100% of our endowment to impact investments, mobilizing our capital towards meaningful and mission-aligned opportunities in the arts and to fund Black-owned businesses, especially those in the southern United States. This new financial vehicle allows us to invest at scale in a substantial way for relevant small businesses, broadening our distributions while continuing to deepen our impact,” said Dr. Maxwell L. Anderson, president, Souls Grown Deep Foundation and Community Partnership.

The three participating foundations are part of Upstart Co-Lab’s community of impact investors with an interest in supporting the creative economy.

“We’ve been working with Honeycomb Credit to bring this new impact investment vehicle to the foundations we advise since the fall of 2020,” said Laura Callanan, founding partner of Upstart Co-Lab. “We’re thrilled to see this collaboration bear fruit, both in expanding what’s possible in the world of impact investing and in bringing much-needed financing to businesses in creative industries, which play a vital role in every thriving local economy.” 

An FJC donor has provided a 0%-interest philanthropic loan to help kick-start a $10 million initiative to help newly arrived Afghans rebuild their lives in the United States.  The loan program is a component of Support for Afghan Financial Empowerment (SAFE), an initiative launched by the International Rescue Committee (IRC) and their Center for Economic Opportunity (CEO) to empower Afghan families as they begin their journey to financial stability and economic security in their new homes across the U.S.

More than 70,000 Afghans have arrived through Operations Allies Welcome, a federal effort to support vulnerable Afghans, including those who worked alongside us in Afghanistan for the past two decades, as they safely resettle in the United States.  These families have had to endure a challenging, emergency resettlement experience in the midst of a pandemic and an economy still reeling from COVID-19 impacts.

“Unlike newcomers with refugee status, Afghans are humanitarian parolees, meaning they have official permission to enter and remain temporarily in the United States,” explains Kasra Movahedi, the Executive Director of IRC’s Center for Economic Opportunity. “This status poses unique challenges for building credit, making it harder for them to apply for rental housing, finance a car, and in some cases may limit access to certain jobs.” 

SAFE fills this gap by providing small, 0%-interest credit-building auto, education, immigration and personal loans, coupled with financial education and counselling.  IRC has trained a team of financial coaches, native to Afghanistan, to offer these services to any Afghan who arrived through Operations Allies Welcome.

The 0%-interest immigration loans will help reunify families separated by the chaotic military withdrawal. Immigration services are costly, and time is of the essence. Few Afghans have the funds necessary to pay for immigration services, and access to a 0%-interest, no fee immigration loan can be the difference between life and death for separated family members.

FJC has a long history of making loans to the nonprofit sector.  The majority of FJC’s loans are made from the organization’s Agency Loan Fund, a pool of donor capital that is actively managed by FJC staff and is invested in loans to nonprofits earning a floating interest rate of the prime rate plus 3 percent (currently 6.5%).   Donors may also recommend below-market rate loans (also known as program-related investments) using funds in their donor advised fund accounts, on customized terms of their choosing.

“We are honored to use FJC’s boutique philanthropic platform to galvanize support for Afghan humanitarian parolees at this historic moment,” said the donor, who wishes to remain anonymous. “Having resources set aside in our FJC account enabled us to provide CEO exactly the 0%-interest capital source they needed to launch this critical economic empowerment initiative.”