The NonProfit Times - November 1, 2008 - (Page 11)

LOANS Continued from page 8 for our local affiliates around the world,” said Cindy Song, director of capital expansion and financial services for Habitat. U.S. affiliates will apply for their loan to Habitat, based on financing needs, servicing families, and their ability to make timely repayments. Habitat’s existing loan program has been very successful, Song said, with 100 percent repayment from affiliates.The initiative has loaned about $8 million annually in recent years and $74 million since it was started more than a decade ago. Habitat has capped the interest rate that investors can choose at 2 percent, to keep the interest rates from going higher for affiliates. It will charge a small administrative fee to cover costs but the interest rates for affiliates will always stay below 4 percent, according to Song. The Federation of Appalachian Housing Enterprises (FAHE) started as an advocacy group with its first community investment note coming from a religious organization in 1982. The Berea, Ky.-based nonprofit pools those funds for affordable mortgage lending,as well as loans to housing nonprofits, whether to buy land, building equipment or stabilize their cash flow, according to Jenna Urusky, director of marketing. The approximately 50 members of FAHE are more traditional nonprofits, like a local Habitat affiliate or housing authority that get access to products, Urusky said, as FAHE tries to funnel more and better resources into Appalachian Kentucky, Tennessee,Virginia and West Virginia. Last year, there were about 89 loans, with some lending outside of the membership, she said. FAHE lends money primarily in two areas: small cash flow capital loans of about $100,000, to cover things like equipment or buying land; and the more likely loan of as much as $1 million to building housing. A nonprofit microlender, ACCIONTexas typically awards low-interest loans of about $10,000 each 100 times a month to high-risk borrowers and those who don’t have access to capital through traditional sources, according to Gary Lindner, chief operating officer. Though nonprofits are not a core business of ACCION (only about 2 percent), there is a demand for it, Lindner said, mainly community and social service nonprofits either for a project or a bridge loan to cover operating funds until an anticipated grant comes in. NPT BACK OFFICE Continued from page 1 human resources, payroll, legal work, benefits management, information technology, and even marketing. To engage the eight, another entity had to be created to coordinate the functions. The entity, called the Back Office Cooperative (BOC), has been working since March with vendors. After office supplies, the goal is to tackle food service, telecom and energy by 2009. “The needs of all eight nonprofits should make the demand-equation work to help to deal with vendors,” said Kevin Carty, president and CEO of BOC. The BOC is an initiative of the Chicago Alliance for Collaborative Effort (CACE), an umbrella federation of more than 20 service organizations in Chicago, which came up with the concept along with Cole and then formed a board to hire Carty. BOC is an Illinois nonprofit agency We Help Nonprofits Lend A Helping Hand To Their Communities. When we begin our buying cycle, every member will have to purchase from a designated vendor. and a cooperative from a federal tax perspective. “We’re not a 501(c)(3) because we service these agencies,” Carty said. “Directly we don’t have a charitable purpose so we can’t look like a 501(c)(3).” In the structure, BOC is not legally tied to CACE, the founding organization. The eight agencies are members of the BOC and also owners. Office supplies will begin the process. “We haven’t worked through the dynamics of the timing of each agency contract,” he said.“When we begin our buying cycle, every member will have to purchase from a designated vendor.” If one agency presently has a long-term contract with a fixed price from one vendor, BOC will try to honor that arrangement. Once that situation ends, the agency will buy from the common vendor. “The real pot of gold is to get us to a common technical platform,” Cole said.“We all have accounts payable and receivable and we have to manage membership.” Cole envisions a technology so when a person entering a Y swipes a card, a staff member will discover that it could be the Back Office, page 12 ‘ Bayonne Family YMCA • Boys & Girls Club of Camden County • Camden Greenways, Inc. Schools The Morris Museum, Inc. Day • Uncommon School • C o m m e r c i a l i z a t i o n C e n t e r f o r I n n o v a t i v e Te c h n o l o g i e s ( C C I T ) Schools • Center for Aging, Inc. • St. • Philip's Academy Cooperative Business Assistance Corporation The Calais School How EDA financing helped United Methodist Homes (UMH) expand their facilities—seven times. Since 1999, United Methodist Homes has called on the New Jersey Economic Development Authority (EDA) to help meet their long-term capital needs for refurbishing existing facilities, constructing new facilities and purchasing medical equipment. Bond financing issued through the EDA has delivered lower rates than traditional debt instruments, a longer payback period, and the flexibility to use these funds for a variety of needs. Speak with an EDA financing expert to find out how your nonprofit organization can take advantage of our access to credit markets. “We have issued seven tax-exempt bonds through the EDA, which has given us the ability to rebuild most of our aging communities. The EDA staff was extremely responsive and continually kept us informed as to the status of the application process. Issuing tax-exempt bonds proved to be the most cost-efficient way for us to finance these projects.” —James Batten President, United Methodist Homes 609-777-4898 www.njeda.com For more information about doing business in New Jersey visit www.NewJerseyBusiness.gov or call 866-534-7789 NONPROTIME/110108 NOVEMBER 1, 2008 THE NONPROFIT TIMES www.nptimes.com 11 http://www.njeda.com http://www.NewJerseyBusiness.gov http://www.nptimes.com

Table of Contents Feed for the Digital Edition of The NonProfit Times - November 1, 2008

The NonProfit Times - November 1, 2008 Reach Out Community Investment Loans Agencies Aim For Back Office Savings Contents Page 4 Special Report: An In-Depth Study of America's Largest Profits Charity Accounts Foretold Ecomonic Meltdown Liquid Assets Groups Shaving Expenses With An Eye Toward ROI Green Is Good Governance Becoming Institutionalized National September 11 Memorial & Museum Finds Its Footing NPT 100 Groups Turning Real Estate Into Cash NPT 100 Investments Beat Broader Market The NPT Power & Influence Top 50 Gala Calendar NPT Jobs Resource Directory

The NonProfit Times - November 1, 2008

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