The U.S. Department of the Treasury recently recognized the Nonprofit Loan Fund of Tucson and Southern Arizona (NPLF), a Supporting Organization of the Community Foundation for Southern Arizona (CFSA), as a Certified Community Development Financial Institution (CDFI). With this certification, NPLF joins more than 500 nonprofit CDFI loan funds across the country committed to providing affordable financing to promote economic and community development in underserved and distressed communities.
“Lack of access to capital and financial expertise has limited the potential of many of our nonprofits,” says Clint Mabie, CFSA President and CEO and a co-founder of NPLF with Helaine Levy of the Diamond Foundation. “In the past, most nonprofits had to fund growth through lengthy fundraising campaigns. Now with NPLF, they can invest today and repay loans with future grants, pledges or earned income.”
Although there are a number of CDFIs nationally, there are only two other non-Native CDFI loan funds serving southern Arizona; one focuses exclusively on economic development in Nogales and the other on individuals in Pima County. NPLF is the only local CDFI to target nonprofit organizations throughout southern Arizona.
“NPLF is one of the few CDFIs in the country focused exclusively on financing for nonprofit organizations,” said Don Jenks, NPLF Board of Directors Chair and Bank of Tucson Executive Vice President and Regional Credit Administrator. “We help our nonprofit borrowers become financially sustainable because we bring significant local expertise from both the financial and nonprofit sectors. That enables us to make informed decisions about which nonprofits can benefit from NPLF loans and technical assistance.”
Since its inception in late 2013, NPLF has seen steady growth in both the number of loans it has funded to nonprofits and the pool of investors wanting to provide low-interest money that NPLF then relends to qualified nonprofits. One of the benefits investors value in NPLF is that their contributions continuously recycle as capital is repaid by one borrower and lent to another. Nonprofits appreciate NPLF’s flexibility in providing loans to organizations that traditional lending institutions would not fund. NPLF protects investors in these riskier loans by working closely with the nonprofit borrower to help it improve its financial sustainability and expertise.
To date, NPLF has lent nearly $1.9 million to 13 different nonprofits, most of which focus on underserved populations or census tracts. Through these loans, NPLF has helped organizations create and retain jobs, increase services to clients, and improve the financial expertise of staff and boards.
“Southern Arizona is a region with an unusually high level of collaboration among organizations seeking to improve the region, which is reflected by the diversity of individuals and organizations that have invested in NPLF via low-cost capital, philanthropic gifts, and technical expertise,” said NPLF Director Maura Grogan.
The CDFI Fund was established by the Riegle Community Development and Regulatory Improvement Act of 1994. Since its inception, the CDFI Fund has awarded more than $2 billion dollars to community development organizations and allocated $43.5 billion in New Markets Tax Credits. The CDFI Bond Guarantee Program has also guaranteed $852 million in bonds to date.