Source: San Diego Foundation
April 28, 2020 (San Diego) - Today the San Diego Foundation Board of Governors announced it approved $5 million to support short-term, interest-free loans to San Diego County nonprofit organizations impacted by COVID-19.
The $5 million investment from The Foundation, which will specifically fund nonprofit organizations throughout San Diego County, complements a separate $5 million recently approved by the San Diego County Board of Supervisors that supports small businesses located in unincorporated areas of the county.
The combined $10 million investment seeds the new San Diego County COVID-19 Small Business and Nonprofit Loan Program (SBNLP), which is administered by The San Diego Foundation.
“The response of the nonprofit community during these challenging times is an example of San Diego at its best,” shared Mark Stuart, President & CEO of The San Diego Foundation. “Our community organizations have stepped up to provide vital services and support during this crisis. This is another opportunity for us to back them up through interest-free loans and the COVID-19 Small Business and Nonprofit Loan Program.”
Through SBNLP, The San Diego Foundation will provide interest-free loans to nonprofits located anywhere in San Diego County, particularly for those providing front-line care to affected communities, with a preference for those serving communities that are disproportionately affected by this global pandemic and its economic consequences.
While philanthropic and government grant support are valuable capital resources, there simply isn’t enough given the high levels of demand. To extend those limited resources, in some cases low-cost financing can be a viable alternative. However, many nonprofits lack the ability to access sufficient affordable capital from banks and Small Business Administration programs.
The interest-free loans from The San Diego Foundation and SBNLP will provide zero-cost gap financing to nonprofits serving San Diego County so they can respond quickly to the needs of the community and help the region rebuild. The San Diego Foundation expects the demand from nonprofits to far exceed the resources available and will work with its coalition of partners, including Mission Driven Finance, to leverage additional funding through senior lenders and Community Development Financial Institutions.
“As an impact investment firm, Mission Driven Finance is built solely for the purpose of getting capital to flow where it normally doesn’t,” said David Lynn, Co-founder and CEO of Mission Driven Finance. “We are proud to work with The San Diego Foundation to help nonprofits serving our overlooked and underestimated communities to access sufficient affordable bridge and working capital, especially as they emerge from this crisis and are facing increasing demand for services.”
SBNLP is a program launched in collaboration with the Office of San Diego County Supervisor Nathan Fletcher, California Southern Small Business Development Corporation, San Diego & Imperial Small Business Development Center (SBDC), Community Development Financial Institutions (CDFI), Accion San Diego, LISC San Diego, and Mission Driven Finance.
All nonprofit loans are intended to be bridge financing to contracted or highly expected inbound revenue. There is no restriction on the use of funds and they can be used for any operating or administrative expenses aside from fundraising activities. The program is not intended to cover lost philanthropic revenue or offset future unpledged donations.
The San Diego Foundation and its partners will assess the need and finalize program agreements in May, with the first round of interest-free loans expected to go out to nonprofit organizations starting in June.
To request information about loan assistance and learn more about the San Diego County COVID-19 Small Business and Nonprofit Loan Program, visit www.SanDiegoSBNLP.org.
To help the nonprofit community and San Diegans impacted by the coronavirus outbreak, businesses, individuals and organizations can donate to the San Diego COVID-19 Community Response Fund at SDFoundation.org/COVID19.